CELLULAR: The Killer App 4 2day & 2moro

Knowing that Short Message Service (SMS) offers ‘the ability to send and

receive text messages comprised of words or numbers or an alphanumeric

combination, to and from mobile telephones’, is not of much help in knowing

why this apparently incidental technology, has become central to contemporary

communications.

But a quick look at the statistics suggests that it has certainly been an

area of unrivalled growth in communications. According to the GSM Association,

world’s leading wireless industry representative body, the total number of SMS

messages sent in the first quarter (JFM) 2001, was about 50 billion.

That 63 percent (4,15,000) of Irish 15-24 year olds now possess a mobile

phone primarily for their own use is intimately related to the fact that SMS

usage grew by 1,000 percent last year. One-third of this age group send over

twenty text messages a week, with 52 percent of them saying they would opt for a

mobile phone if stranded on a desert island, while only 18 percent said they

would opt for TV. In Ireland, over the Christmas 2000-01 period, nearly 3,00,000

phones were sold. This means that around 60 percent of the Irish population now

posses a mobile phone. And according to recent research conducted by the

Financial Times, the figure for mobile phone penetration in Ireland is expected

to reach 2,740,000 by 2001.

As with the development of the mobile phone business, the fact that business

users comprise of the majority of those who had access to SMS technology,

initially determined the ways in which it was used. As business users generally

had their bills paid by the company, and the use of SMS in unified messaging

(receiving, for example, SMS alerts of new e-mail) was rare, they had no

particular incentive to investigate the possibilities of the cheaper text

message facilities offered by GSM phones.

It was only with the onset of mass-market mobile phones and pre-paid calling

services that the SMS began to grow rapidly. In the UK, pre-pay customers make

twice as many SMS calls as contract-based customers.

The younger users who were attracted to pre-paid phones, such as Ready-To-Go

and Speakeasy, were highly sensitive to cost. Consequently, sending a complete

message for a set, low fee (and not paying for the answer), rather than entering

into an expensive, open-ended conversation was a highly attractive concept. With

SMS, the cost of an exchange is, in this manner, shared by both the persons

involved–another highly attractive notion.

Why SMS Works

There are, of course, other qualities to SMS, which allied with the perceived

financial aspects lead to text-messaging explosion at the younger end of the

market.

• SMS conversations remain private, even if carried out in a public
  
  location. While many feel a taboo about speaking on their
  
  
  
  mobile when, for example in pubs, on public transport or with a group of
  friends, the same does not apply to text conversations.
  
• SMS conversations can be carried on in public spaces irrespective of the
  
  ambient noise level (clubs, pubs, etc).
• SMS allows the freedom for flirtatious exchanges without the pressure of
  
  face to face or even voice to voice contact. Users who have enjoyed the
  
  anonymity of the Internet chat rooms can find a similar experience through
  
  SMS. With the added benefit of mobility.
• SMS messages are ideal for making social arrangements, with the mobile
  
  becoming a very simplified PDA, storing appointments and addresses as text
  
  messages.
• SMS is excellent at providing ‘fill-in’ entertainment for periods
  
  spent in transit or waiting.

All this means that for the marketers, SMS has the advantage

of providing unrivalled access to 15-24 year olds, a group that has proved

extremely difficult to reach effectively through other media. If it is true, as

Amárach Consulting/Irish Direct Marketing Association iMarketing (Jan 2001)

report suggests, the telephone will remain the dominant interactive channel over

the next few years then present patterns suggest that a large proportion of

those interactions will be performed via SMS.

One of the most prevalent commercial uses of SMS to emerge

has been the area of user-requested updates and alerts, either delivered through

push or pull methods. Customers can either subscribe to a service that will

provide regular alerts on a chosen subject (soccer scores, gold score, etc) or

request information by sending a key word via SMS (lotto numbers, etc). While

these type of applications are ideal for providing timely information, without

recourse to less widely deployed WAP technology, they do not perhaps make for

the most compelling use of SMS capabilities. Among the 15-24 year-olds, a group

habituated to the Internet experience, these kind of simple interactions may

prove less than attractive.

In recent times more interactive SMS applications have begun

to emerge. These have, so far, been games-oriented. Those developing mobile

games, however, have to deal with the special flavors of creating a gaming

experience in an ultra-low bandwidth environment. Mobile games will be extremely

limited in their visual or aural appeal. Input through and alphanumeric key pad

is, when compared with the force feedback joystick and steering wheel devices

familiar to players, extremely limited.

On the other hand, mobile games have huge advantages

associated with being portable. Given the restrictions, mobile games must create

what one game firm (4) has dubbed ‘immersion by imagination’. In some

territories, branded gaming has emerged, its novelty proving more than enough

compensation for the low-bandwidth styles.

Marketing and Promotion

But while new business will certainly be created in this

space, under the present arrangements, the most obvious area in which SMS may be

useful to a wide range of companies is in marketing and promotion.

A recent study by wireless services company, Quios,

discovered a very ready acceptance of advertising and promotion making use of

the mobile. Reviewing the findings following their Euro 2000 Soccer messaging

service, the company found that although advertising in this medium was expected

to have the same effect as direct mail, it already has a much higher response

rate at a much lower cost per head. This high success rate is due to a

combination of attractive qualities that text messaging posseses for its

audiences.

• Immersive: SMS messaging has an interactive quality that
  
  younger users find particularly attractive. Personalized SMS messages,
  
  particularly those that are delivered in response to a SMS request, involve
  
  users in an interactive experience familiar to and desired by those with a
  
  knowledge of the online world.

• Freedom from clutter: For the moment, clutter has not
  
  particularly afflicted this area. Advertising messages tend to be less
  
  common than in other media and importantly tend to remain highly pertinent
  
  to the mobile experience, alerting users to such things as new rates or
  
  other offers of particular and immediate relevance.

• High recognition: High ad recall (79 percent of
  
  participants had 60 percent of recall of wireless advertising–a study by
  
  Quios).

• WOW factor: As a spin-off from the lack of clutter in
  
  this area, messages maintain a degree of surprise. Not yet inured to being
  
  communicated with in this manner, users have a higher degree of acceptance.

• Viral marketing: Due to a combination of the two factors
  
  above, the proliferation of messages through viral means is an appreciable
  
  contributor to the effectiveness of campaigns. As mobiles are habitually
  
  used for social communication, the possibility of enhancing the
  
  effectiveness of messages via communities of interest remains strong. Users
  
  often interact with their mobiles while with groups of friends ‘showing
  
  off’ any attractive new content. (70 percent of those surveyed for the
  
  Quios report said that they had recommended the soccer messaging service to
  
  a friend.)

• Communication at point of purchase (with GPS): The fact
  
  that advertising is received on mobile personal devices means that the
  
  audience can, in theory, be located right next to sales points.

All of these factors play particularly well for the 15-24

year old group, where the mobility and social interaction around technology are

highly desirable.

The Golden Rules of SMSa

But, to ensure attitudes to text advertising and promotions

remain positive, Púca suggests that those marketing in the wireless space must

ensure that:

• Messages include value-added elements: Among an age group
  
  that has become used to interactivity, successful messages will be those
  
  that invite participation and response.

• Information received is highly accurately targeted: The
  
  high level of acceptance of text advertising and promotion relates
  
  intimately to the relevance of products and services promoted.

• Facilitate easy opt-out: Maintaining control of the flow
  
  of messages to a mobile device is perceived as highly important by users.

An Eye on the Future?

The year 2001 promises to bring higher bandwidth connectivity, so what does

the future for vanilla SMS promise? Such services as General Packet Radio System

(GPRS) will not include SMS facility, though they will include more

sophisticated messaging services. But that does not mean that SMS will be

disappearing in the short-term. As far as 2005, SMS services are likely to

remain popular, if they continues to grow at the present rate.

But even given the obvious end-point for SMS as we know it, it is still

essential for businesses to enter the fray, since those who have come to

understand the possibilities of mobile, non-voice communication will be the best

place to lead developments in forthcoming GPRS, Enhanced Data GSM Environment

(EDGE) and other imminent mobile technologies.

While there has in recent months been a highly mediacized "WAP-backlash"

it is beginning to seem likely that adverse reactions (often due to these

alistic promises) are nowhere near as severe as earlier imagined. In the UK, for

example, Genie, the BT owned mobile Internet company, recorded 88 million WAP

page impressions in the UK in the month of January 2001, as compared to 62.5

million at the end of December 2001, an increase of more than 40 percent.

Reports of the death of WAP, it seems, have been highly exaggerated.

Perhaps, the most important aspect of the rise of SMS technology to recall is

the way in which the developers of the technology were not necessarily best

placed to say exactly how it will be used. As we move more and more towards

providing tools for creating entertainment rather than creating content, it

seems increasingly necessary to follow the consumers demand very carefully. And

the best way to do this, right now, is from within the SMS space.

Extracted from a paper by Puca (www.puca.com), a Dublin, Ireland-based

company providing services in the wireless content integration space, with a

focus on virtual communities.