The advance of smartphones, the avalanche of apps and the heightened interest in mobile video, mobile barcodes and Augmented Reality are combining to take mobile marketing strategies and creatives to the next level. But are marketers and mobile operators getting ahead of themselves? Caroline Doussot argues there is plenty of mileage (and money) left in simple text messaging — particularly when companies ask our permission (and preferences) first.
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While our mobile devices and smartphones may be chock-full of features and functionality and our screen displays may be crowded with a wide variety of mobile applications, consumers still depend on text messaging to connect with the world around them. Whether chatting with friends and members of their social networks, or receiving alerts from banks and favorite brands, text is people’s primary communications tool.
From a business perspective, only SMS – a form of communications universally accepted and understood — delivers real reach. But text messaging does more than drive conversations. It also contributes the most to mobile operator revenues.
According to the latest forecasts from Informa Telecoms & Media, “humble SMS will remain a significant source of revenues and traffic for mobile operators on a global basis until at least 2015.” Global SMS revenues are forecast to rise to $136.9 billion by 2015 up from $105.5 billion in 2010, as global SMS traffic increases from five trillion messages in 2010 to a whopping 8.7 trillion messages in 2015.
Text takes the lead
Informa’s message to mobile operators and organizations: “SMS should not be overlooked as a core service for mobile users.” Due to its low cost, universal access and interoperability across devices and mobile networks, SMS is the most effective way for consumers to communicate with each other and for companies (government departments, banks and financial institutions, brands, retailers and transport providers) to get their message through to their target demographic.
At the other end of the spectrum, a raft of reports underlines the pivotal role of text messaging in people’s lives.
In fact, a new study out from Deloitte shows that SMS has the lead, with more consumers preferring text to social media and email engagement for mobile users. Specifically, the study found that the vast majority (90 percent) of smartphone users send at least one text message per day. However, less than half (40 percent) use their devices to access and interact with social networks like Twitter and Facebook at least once per day.
Thus, claims that text messaging is on the decline, losing ground to mobile email and social networking, are off the mark. To the contrary, the study found that most respondents between the ages of 18 and 24 send at least one text message every hour.
Interestingly, the penetration of smartphones and the advance of simple text messaging are two trends that transform the way we lead our lives on mobile. We are moving from single-tasking to multitasking, doing more with our mobile devices than ever before. At the same time, we are relying more than ever on text messaging to share our experiences and engage in the conversations taking place around us.
Put another way, we increasingly live our lives on mobile. (In developing markets is the only screen.) And we increasingly use SMS to speak with and listen to the world around us.
In fact, it’s the personal and interactive nature of text messaging that makes it ideal for communications — of all kinds. Why? Because SMS enables a dialog. And, as we all know, two-way exchanges are at the core of any good relationship.
In advertising – particularly on mobile — the end-game for brands is all about customer engagement. Granted, creatives and formats such as display banners, apps and video may capture the attention of consumers with their “wow” effect. But the one-digit response rates these formats deliver are generally much lower than the response rates triggered by SMS.
The direct approach
SMS is clearly an effective way to deliver mobile marketing campaigns and messages. But what are the rules of engagement?
Importantly, consumers should only receive the messages they want in the first place. Requiring opt-in (rather than opt-out) ensures that consumers receive advertising they consider relevant and valuable.
Permission marketing also builds trust. Consumers volunteer personal information (such as hobbies and interests) in order to receive advertising about topics and products that truly interest them. Brands can therefore count on connecting with consumers that want to hear what they want to say, a virtuous circle that dramatically improves response rates and ensures that consumers are always in control.
However, to be truly effective permission marketing must encourage an ongoing exchange between marketers and consumers. This is not about one-off text conversations. This is about creating a text dialog that really connects consumers with their favorite brands. Marketers need little convincing to understand the value of a deeper engagement with consumers. Unfortunately, it’s not as simple as it sounds.
SMS may be a no-brainer, but it is not instant. In fact, it can be a hassle for consumers to respond to promotional text messages from brands, particularly if they contain short codes or require a new message in response.
To remove these barriers (and help brands get in closer contact with their customers) Gemalto has developed an approach that doesn’t only speed up the exchange. It transforms it.
Interactive SMS, which draws on our heritage as a leading provider of SIM cards and security solutions, harnesses an application on the SIM card to change the entire messaging experience.
How does it work?
Rather than interrupt the consumer or clutter up their inbox, Interactive SMS messages pop up (all ready to read) in the phone’s idle screen. Response is immediate and seamless because consumers can interact with the messages through a series of single clicks. Thus, Interactive SMS is easy, instant and intuitive.
For the mobile operator, and the brands that run campaigns on their networks, Interactive SMS lays the groundwork for a variety of interactions. From mobile coupon schemes (that allow consumers to choose the coupons they want from a list that appears on their device idle screen) to satisfaction surveys (that ask consumers to fill out a simple multiple choice form delivered directly and quietly to their device), Interactive SMS deepens the dialog.
And, because Interactive SMS is delivered over-the-air to SIM cards already in use, the approach ensures that the mobile operator has a central position in the value chain. Put another way, the mobile operator is positioned to monetize its database of users. Operators can also use Interactive SMS to learn more about their users, thus increasing the value of their opted-in inventory and delivering brands access to their target demographic.
What’s more, Interactive SMS is not limited to mobile phones. Take the iPad, a tablet device with a SIM card. Apple restricts users from receiving regular SMS messages, but it cannot block Interactive SMS messages from being delivered to the device. In reality Interactive SMS is the only way operators can communicate with iPad SIM users. Further Interactive SMS allows operators to collect subscribers preferences and opt-in, activate subscriptions and push low balance and prepaid reload alerts. Operators can also use this as a vehicle to encourage users to top-up credits for Internet browsing and purchase value-added services.
Campaigns and promotions
So what are the results? Our clients are seeing response rates that are on average 6 times higher than standard SMS. This is possible because operators feed the information they collect via the SIM card directly into their CRM systems, a process that allows them to improve the targeting for new campaigns. Response rates skyrocket, advertising is more relevant (because it is permission based) and the click-though rates (CTR) skyrocket.
In Brazil, for example, Interactive SMS pilot campaigns promoting the mobile operator’s own services achieved double-digit response rates. Specifically, the Brazilian mobile operator reported 35 percent of users responded to the operator campaign offering address book backup services; 27 percent responded to the offer for pre-paid credit top up, and 12 percent responded to the offer for unlimited voicemail subscription.
Prompted by these impressive results the same mobile operator used Interactive SMS to support cause giving. In response to the floods that ravaged the region in early January the mobile operator broadcast a public service message to its entire opted-in subscriber base in Rio de Janeiro, telling users how they could donate money to help the people who were affected.
The Brazilian mobile operator sent an Interactive SMS saying: “Find the Red Cross in Rio de Janeiro closest do your home and make your donation. Press OK to know more – it’s free.” The ease of interaction – namely one click to donate — encouraged users to get involved and resulted in a 9 percent CTR. (And that was despite the fact that the message — which was sent to all opted-in users — was not truly targeted.)
In India one of our operator customers road tested SMS and Interactive SMS to compare the results. The campaign, a message promoting a sports news service, triggered significantly different responses. Specifically, the response rate to ordinary SMS (a marketing mechanism that requires the user to reply with a text message) was just 0.2 percent. The response rate for the Interactive SMS campaign (where the user only had to press one button on their phone to answer) was 7.7 percent. That’s a massive 38 percent difference in response rates.
In the mobile industry we need to ask ourselves: should we invest in formats and creatives that (unlike text) are neither universally accepted nor understood? Well, only if we want to limit our reach and be sidetracked by technology barriers like handset fragmentation. It’s much more effective to reach people with a form of SMS that allows instant delivery and instant response.
Editor’s note: Caroline Doussot is Head of Mobile Marketing at Gemalto, the world leader in digital security delivering on the growing demands for personal mobile services, identity protection, payment security, authenticated online services, cloud computing access, modern transportation, e-healthcare and e-government services. Caroline is responsible for mobile marketing and advertising strategy. She also regularly blogs on a range of mobile marketing topics, including consumer engagement and permission marketing.
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