Another Channel, Another Challenge

Just as the whole world was thinking that wireless application protocol (WAP) was “it,” the honor has gone to short messaging service (SMS), or “texting” as some call it. Durlacher Research Ltd. predicts that by 2003 Europeans will be dispatching more than a trillion SMS messages a year, generating $12 billion in revenue for carriers annually.

What’s more, as many as 8 percent of those messages might carry paid content in the form of either ads, which could cost marketers 3 to 5 cents each, or infograms, such as stock-price alerts, paid for by subscribers. Forrester Research contends that commissions and fees from such value-adding messages will contribute another $2 billion a year to carriers’ coffers by 2003.

Aside from the interesting fact that consumers have demonstrated a preference for communicating using SMS, the really interesting issue for the world’s marketers is the building and controlling of brands in the SMS medium. MTICKET, the world’s first mobile ticketing system, has also been the first to signal future directions for mobile phone marketing use.

In partnership with nightclubs, such as the Ministry of Sound, MTICKET makes it possible to have electronic tickets delivered directly to the purchaser’s mobile phone. Clubbers can visit ClubConnexion, the U.K.’s online dance community site, and buy discounted guest-list tickets. Once you’ve submitted your details to the site, including your mobile phone number, the booking confirmation and ticket numbers are sent directly to your phone as a text message. Then, at the nightclub’s door, instead of waiting for ages while staff wade through mountains of paperwork to see if you’re on the club’s guest list, you simply show the attendants the MTICKET message on your mobile phone and head on in.

And this is just the beginning. Imagine the convenience of being able to carry your train or airline tickets as MTICKETs. You avoid the hassle of losing your ticket for a start — unless, of course, you lose your mobile phone. Or imagine having just seen your favorite band in concert after having used an MTICKET to attend, and receiving a special CD offer, sent by SMS, just as you’re on the way home.

The possibilities are endless, and so are the challenges for brands. Yet again, brands need to find a way of reflecting their core values on a limited canvas: the monochrome, text-only, tiny mobile display, an even more limited arena than that offered by the pre-World Wide Web, sans-graphics Internet of 10 years ago.

The big advantage and, simultaneously, the potential risk of the SMS channel lies in the intimacy of the handset. Every consumer has his or her own, and the marketing opportunities and dangers rest on this fact. The mobile phone could be an instrument for personalized, highly relevant marketing. But how will marketers achieve this ideal? The medium will test their ability to integrate their brands’ message across all media, ensuring that the mobile phone emerges as another element in the chain reaction of one-to-one targeted messages.

Brands will need to transmit relevant messages at relevant moments; consumers will need to be in the mood to receive unsolicited information on their mobiles. For instance, they’re more likely to be receptive to the CD offer within half an hour of exiting the concert than when they’re running late for work the next day. You might be quite happy to be reminded about the latest Star Wars movie on DVD just as you’re passing the video store on the way home. And you’d be pleased to receive a Red Bull offer as you enter the nightclub — just show the message to the bartender for your free drink. You see, the brand’s challenge isn’t limited to the art of sending short, precise messages. The broader challenge is ensuring that the right message is received in the right context so that the brand communicates relevantly.

And the potential risk I mentioned? Many companies will see SMS as yet another medium for uncontrolled spamming, just as many have used email. SMS spamming will be regulated. Australia, for example, is close to establishing guidelines for such regulation. But regulatory controls will take time to evolve, and brands can do a lot of damage to themselves in the meantime. How would you feel about receiving the same beer brand’s message six times a day for two weeks? I’m quite sure you’d boycott the brand for life!

So, as in any other direct-marketing medium, the balance between creativity, message, timing, and media context is the key to branding success. The mobile phone is yet another example of the enormous brand-building potential that’s opened up to marketers over the past six months. Another channel certainly — and definitely another challenge.

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