The insiders’ guide to mobile marketing using SMS: the golden rules and top tips

Around the world, SMS is used by four billion mobile users, who sent five trillion messages in 2009, and it continues to grow unabated. By 2013 the volume of messages will double to 10 trillion, according to Portio Research.

So if marketers want to reach the largest number of consumers via their preferred mobile media then text has to be in the mix. But in a world where mobile spam is becoming a major privacy issue, it is essential that building, maintaining and operating the list of opt-in customers is strictly controlled.

“SMS remains the most inclusive data delivery and interactive tool on the planet today.”
Mike Short, VP Telefonica Europe/O2 and honorary president, Mobile Data Association (MDA)

This guide is divided into two sections:
A) Why SMS is still No 1 when it comes to mobile marketing and services.
B) Top tips for building and operating an opt-in mobile marketing list.

The main contributor to the guide is Matteo Montan, head of new business, Buongiorno; with additional contributions from Steve Reynolds, chairman, MDA; Razvan Barbulescu, mobile advertising manager, Vodafone Romania; Mike Short, VP Telefonica Europe/O2 and honorary president, MDA and Tim Jefferson, consultant, The Human Chain. All are speakers at 10th annual Global Messaging Congress in London on June 22-23.

A) Why SMS is still No 1 when it comes to mobile marketing and services

1) Popularity/reach
The mobile phone is the most pervasive media on the planet, with about five billion subscribers (according to The International Telecommunication Union) – equivalent to 70 percent of the world’s population. Every single one of those handsets is capable of sending and receiving an SMS message, whatever the country or mobile network. And 80 percent of mobile phone subscribers use SMS regularly.

2) Staying power
Use of SMS hasn’t been dented by the popularity of other mobile media, including mobile Web, email, applications, IM, multimedia messaging or mobile social networking such as Facebook or Twitter. For the majority of consumers, text is far more widely available and more affordable and almost all mobile users know how to use SMS – it will be a long time before that can be said of other mobile media. For the foreseeable future it will remain the second most used mobile application after voice calling.

3) Accepted for mobile marketing
SMS has long since been an accepted channel for free and paid-for mobile services – such as news alerts. Increasingly consumers have also proved willing subscribers to opt-in services where they receive mobile marketing messages either direct from the brand or via agents, such as their mobile phone operator – as long as the message is relevant and the incentive pitched correctly.
The mobile operators and other commercial outfits that spotted this trend in the 1990s have reaped the rewards. Forward looking operators include Turkey’s Turkcell and Vodafone Romania – the latter boasts a list of five million people (almost 50 percent of its total customer base) who have specifically opted-in to receive advertising messages from third party advertisers via their mobile operator.

4) Permanence
SMS doesn’t require both parties to be available at the same time. The marketing message can still be sent even when the recipient’s phone is switched off or there is no network signal. It will be delivered when the phone becomes available and sits in the inbox to be read when the recipient is free – and remains there until the message is deleted.

5) Versatility
There’s much more to SMS than 160 characters of text. As messages can include binary data, marketers can also send – or receive – digital content such as ringtones, pictures, logos, wallpapers, animations and money-off coupons/vouchers. SMS often underpins many mobile services – it’s an excellent platform for exchanging information between applications. It is, for example, central to many of the m-wallet services that help to bank the unbanked [LINK] in developing nations.

6) Two-way communication
Media companies, particularly, encourage viewers/readers to send in feedback, tips for stories, pictures and join in promotions using SMS. Marketing campaigns will often encourage customers to send in picture messages.
One concern with pictures is that multi-media messages are charged at a higher rate than text messages, and often will not be included inclusive text price plans. This should not put marketers off, as it is possible in some countries for marketers to pre-pay data fees, so it is free to send in a picture (it is also possible arrange zero-rated short codes or free access to certain mobile sites).
In December 2009 the BBC’s radio 1 ran a picture-messaging day in the UK, with the help of the MDA, and as the event helped to promote picture messaging, the mobile operators were happy to forego data charges. In 24 hours the radio station received 42,000 picture messages.

6) Interactivity
As a mobile channel it’s hard to beat SMS for interactivity. As it’s easy for customers to reply, or to act on click-to-call and click-to-browse links in the message, this makes mobile a great channel for lead generation.

7) Payments
SMS supports reverse payments, this allows premium rate SMS services, where the recipient, rather than sender pays for the message. This is remains one of the most common methods for charging for mobile content. It is also commonly used as channel for making donations to charities, though there is no rule-of-thumb for the acceptable level of profit taken by an operator.

8) Cheaper than the mail/post
One of the challenges to SMS is cost. The cost of sending bulk SMS and hefty percentage that mobile operators take from premium SMS services has encouraged some publishers to explore other options [see this interview with Reuters].
Mobile email can be sent for virtually free from anywhere in the world and the cost of notifying customers to new products and promotions via social media, on the mobile Web site or via applications will be minimal (after the initial set-up cost of building the mobile site and developing the app). But unless customers are on a flat-rate data plan (which most are not), it will cost the consumer to download email or go onto the Web… that’s assuming their phone is capable of downloading email, applications and browsing the Web.
But in the real world, most organizations still correspond with customers via direct mail (rather than using any mobile media) and compared to the cost of a stamp/letter, SMS is much more cost effective – so it would make a lot more sense for government bodies, for example, that are looking to cut costs.

B) The golden rules to consider when building, maintaining and operating an opt-in mobile messaging list.

Stage 1: Building the opt-in list.
No company can simply buy a list of mobile numbers and start sending bulk text messages. This is spam.
Remember the mobile phone is a highly personal device. Mobile marketing requires an opt-in database – with explicit consent and reconfirmed consent from each recipient that they are happy to receive B2C communications to their phone. Failing to comply will damage brand reputation as well as undermining consumer trust in SMS.

Stage 2: How to get the opt in
The crux to building a quality list is finding the right medium and incentive to persuade the target audience to opt-in:
a) The medium may be a bill-board, print, TV, Web or mobile Web advertisement.
b) The call to action – this is the inducement that grabs the consumers’ attention and encourages them to interact. It may be a competition – these can be popular with consumers; a discount voucher; or promotion for free mobile content e.g. a free ringtone; or simply additional information.
c) Short codes are the common method of response – whereby the consumer texts a keyword to a special short number. Short codes are quite versatile, they can be charged at premium, normal SMS rates or (where operators allow) no charge.
d) An automatic response is triggered by the consumer’s message to the short code this (i) sends the requested information, free promotion, confirmation that you’ve entered the draw etc and (ii) asks if the customer wants to opt-in for future offers or messages.
N.B. this does not need its own advertising campaign. Adding the call to action to an existing TV, print, Web and/or mobile campaign, not only saves money, it adds value to the campaign e.g. it makes a one-way bill-board, print, TV ad interactive.

Stage 3: Getting the best results
To get the results, messages do not just need to be opt-in, they need to be relevant and targeted at the individual. If the messages aren’t compelling the consumer will not respond. If it is irrelevant, irritating or too frequent, they will opt out of future messages.
This requires the marketer to consider:
a) The Preferences of the recipient and how the list will be fine-tuned using demographic profiling, analytical tools and feedback mechanisms, including surveys and by taking note of which products, promotions etc have interested the consumers in the past.
b) The content of the marketing message – one of the benefits of SMS is the brevity, as a limit of 160 characters forces the sender to be precise.
c) The timing of the message. Time of day or year can influence response rates e.g. a promotion for a restaurant at lunch time or a special birthday offer or an event e.g. when the national team is due to play a match or following a relevant purchase.
d) The location of the recipient will become increasingly important as location-based services become available to marketers. Today LBS faces many hurdles, not least privacy concerns.
N.B. The beauty of the opt-in database is that it is that it is easily repeatable – communication of special offers, sales, or product can continue in perpetuity, the art is making each successive message more relevant and harder to resist.

Stage 4: Play by the rules
Industry associations such as the MDA, IBA and the MMA have helped to provide guidelines for mobile marketing. Industry regulators have also established standards – such as the PhonepayPlus regulations in the UK, which covers premium rate. But regulations and guidelines for text marketing remain fairly sparse.
Not only should messages be consensual and targeted, it should be simple for recipients to opt-out. If customers cannot reply to the message with “STOP”, they will be suspicious of your motives.

“SMS will remain a key driver and facilitator in both mobile marketing and mobile services delivery for some time to come. With SMS infrastructure so well established and customer acceptance levels so high, it will be some years before other mobile bearers start to eat into both the volume and revenue from SMS. Talk of the demise of SMS as a significant revenue source for mobile operators, application providers and service providers is premature.” Tim Jefferson, The Human Chain

The following experts contributed to these points (click links for profiles):
Matteo Montan, Buongiorno: A1, A4, A5, A8, A9, B1, B2, B3.
Mike Short, Telefonica Europe/O2 and MDA : A9, B1, B3. B4.
Razvan Barbulescu, Vodafone Romania: A1, A3, A7.
Steve Reynolds, MDA: A2, A6, B4.
All are speakers at 10th annual Global Messaging Congress in London on June 22-23.

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