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Blending SMS and Database Marketing for Greater Success

  |  February 18, 2011   |  Comments   |  

Despite the increasing popularity of smartphones, the ubiquitous SMS is probably the most pervasive marketing tool used by advertisers to reach their target audience on this mobile channel. Indeed, you won't fail to see a print ad on a newspaper or magazine today that doesn't include a SMS short-code to elicit a response from the target audience.

The widespread use of SMS marketing is a recognition of the approximately 4 billion mobile users globally where almost all of them are able to receive and send SMS (dependent on the usage plans with the user's mobile operator). The size of the market, ease of sending SMS through modems or third-party SMS messaging aggregators, as well as relatively low costs to traditional media such as print, radio, and TV makes SMS a compelling advertising and promotional (A&P) tool.

Despite the merits of SMS marketing, I would argue that the success of such campaigns depends on the source of the database that is used to broadcast the SMS message. Most mobile users, if not all, do not appreciate unsolicited SMS ads being sent to their mobile handsets. This is made worse when advertisers send bulk SMS ads to the public and ignore the need to target their message to the right market segments. These are two key reasons why SMS marketing deliver poor results and further exacerbate a poor perception to mobile users.

Hence, I urge all advertisers to check if their mobile marketing strategies have the following attributes:

1. Database integrity. Assuming that the advertiser taps on its database of opt-in mobile users for their SMS A&P initiatives, it's important to know when the last update was done on the database and check for duplicates that were not removed. At a deeper level, the advertiser would need to know if any user in the database has been contacted recently by other SMS A&P initiatives. This is critical as users today have a low tolerance to receive multiple SMS A&P messages from the same source; such messages sent to the same user within a short interval will lead to higher rates of un-subscription from the opt-in database.

2. Market segmentation. Clearly, the effectiveness of the SMS A&P message will depend on the user's profile, lifestyle choices, and historical trends in responding to previous initiatives. This would require the A&P manager to develop a deeper understanding of the customer, uncover the current and latent needs, and the context of the SMS messaging which delivers the highest possible response. These elements require a CRM approach to database management, which inevitably leads to a more precise targeting of the intended SMS A&P initiative.

3. Sending SMS A&P messages by location. Location-based technologies now allow managers to work with operators to send SMS messages to specific locations at designated times. This approach creates a different behavioural response for a targeted user to make a spontaneous decision to accept or reject the message's call-to-action. This is different from the traditional approach of sending SMS A&P messages where the decision to respond may not necessarily be time and location-sensitive, thereby reducing the probability of responding to the call-to-action in such messaging context. Thus, the nature of the call-to-action and the degree of response needed to meet ROI expectations are arguments supporting the use of location-based SMS A&P.

Clearly, SMS is the last mile of any mobile A&P initiative, and is useful only when there is a disciplined and conscious effort to develop the strategy behind the initiative.


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Darren Yan

With more than 16 years of experience in mobile, digital media/advertising, and e-commerce, Darren has successfully developed and launched pioneering mobile Internet initiatives such as subscription-based mobile news services, location-based advertising, behavioral targeting using consumer analytics in Singapore Press Holdings, SingTel, Cisco Systems, and DBS.

At InterContinental Hotels Group (IHG), Darren will serve as the regional subject matter expert on mobile and drive overall utilization of mobile to increase revenue and engagement in Asia, Middle East and Africa (AMEA). His mandate includes developing, implementing, and managing mobile marketing strategies to generate greater brand awareness and revenue through owned, paid, and earned media.

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