Friday, March 24, 2006

JupiterResearch: Commercial text messages with potential!

Julian Smith at JupiterResearch writes about the market for "using SMS text to send promotional mobile marketing messages direct to consumers." Smith states there is growing interest, but "successful, large scale implementations of this type of customer acquisition activity have been few and far between to date (both in Europe and the US)."

One of the challenges is "persuading consumers to opt-in, by offering up their mobile numbers and permission, in exchange for the occasional offer or promo delivered to their handset." Smith says that "Jupiter estimates spend on SMS mobile marketing to reach a total of €111 million by the end of 2006 across Europe. Small fry in comparison to the explosion in paid search, for example, which will total €1.6 billion by the end of this year!"

Smith than looks at an "interesting new development from Miva in the UK" that might change things. He says:

The pay-per-performance contextual ad network has just launched a new pay-per-text service in collaboration with The Number's 118 118. At present when a consumer dials up the directory enquiry service to find out the details of a company or service provider they are delivered the details back as a text message. With this new advertising platform relevant and related marketers will be able to add a couple of lines of additional text promoting their complimentary service. So taxi services could be promoted alongside restaurant details. Or car hire services alongside airline details. Or home insurance against emergency plumbers. This sounds like a win / win for both advertisers and consumers. The advertiser gets directly in front of interested consumers, when actively searching a related business, while the consumer gets added value information, non-intrusively incorporated into their text message, that they are happy to receive.

This new type of co-branding / sponsorship advertising model could help drive investment in the SMS channel. It could also help boost the revenues of directory enquiry businesses - 118 118 texts tens of millions of directory callers with their details every year!