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Is SMS about to Whither as a Marketing Tool?

Lee Bowden of Piri asks whether the future of mobile marketing lies outside the realms of the humble SMS message.

SMS no longer seems to be the talk of the town. Richer mobile media, user generated content, social media, higher usage rates of the mobile internet and mobile search all seem to be pushing it away. But is this really the case? Will SMS soon disappear, and not just from our lips as a phrase? The mobile market is becoming increasingly crowded. The evidence falls in its favour though. It will continue to have a long life; the new technologies and trends may even rely upon it as marketing vehicle.

SMS makes perfect sense

At the beginning of June 2007, the American Chamber of Commerce (AmCham) held a presentation on mobile marketing in Taipei. In Taiwan SMS rates are now rising above the 300 million mark. MMS and 3G services aren’t quite so widespread. Although MMS is becoming quite prevalent in other countries, and the growth of 3G (services and handsets) is slowly rising, there is still a way to go before they reach maturity. So it makes perfect sense to use SMS as the cornerstone of any mobile marketing strategy.

Jonathan Gardner advises marketers to stick with the technology that everyone knows and loves in his recent CNET Asia article, ‘Same SMS, now with 100 per cent more marketing LOVE’. At the event every campaign mentioned the usage of SMS. While it may be an old, tried and tested medium, it is universal. The number of messages being sent each year continues to grow too. Not just in Taiwan, but around the world. MMS is catching up, but it’s still got a long way to go.

Cut out of the middleman?

The event included a number of EU and Asia-focused case studies on large brands: e.g. Mercedes-Benz, Coca-Cola, and McDonalds. Some of these advertising campaigns were rolled out by Ericsson. These and others showed that it is possible for a brand, a mobile operator, and a mobile phone manufacturer to conduct a ‘nice’ mobile advertising campaign without hiring an advertising agency. While there is no wish to replace them, the potential is there.

Differentiation; the key challenge

One of the key challenges lies in how brands differentiate themselves. It’s become very crowded online and in the more traditional media. Brands struggle more as this happens; they find it harder to demonstrate that they are different from every other brand. The same could happen with mobile marketing campaigns. What is clear is that it‘s no small challenge. According to Earl Lum, the founder and president of EJL Wireless Research, mobile coupons are going to be big, equating to 42% of the market. SMS is the likely vehicle for them, so this surely increases the pressure to differentiate now.

Caroline Lewko - the CEO of the Wireless Industry Partnership, interviewed Lum on her ‘Wireless in Progress’ blog at the beginning of June. She discovered a possible solution. Differentiation means having and finding the right partners in each region of the world for a mobile advertising campaign to be successful. Which technology should be used, and how? SMS is bound to be part of most campaigns as methods of calling people to action, but this will depend on the required reach of a campaign, its purpose and overall objectives.

MMS is way behind SMS

A research paper analysing the impact on the Italian market, ‘Mobile Customer Relationship Management: An Explorative Investigation of the Italian Consumer Market’, by Giovanni Camponovo et al, shows that 7,000 mobile services are offered to Italian consumers. He and his co-authors conducted a survey. This revealed that 86% of these services are delivered using SMS. Only 23% are available through browsing the mobile internet. Way behind is MMS at 1%, relating to streamed and multimedia mobile content services.

“The current situation in terms of technology is thus rather deceiving given that the predominant technology is SMS, which is the most limited medium of delivery as it can only convey a [small] amount of text”, say the authors adding, “However, it is often sufficient for sending small but relevant pieces of information.” The main reason cited is the low adoption of new technologies such as MMS and the mobile internet.

SMS dominant in US campaigns

In the US, as a comparison, two thirds of all mobile advertising and marketing campaigns are delivered using SMS or premium SMS on an opt-in basis. ABI Research says that $3bn will be spent this year, but it predicts that SMS will eventually be overtaken by mobile video in 2011. Or will it?

SMS has stood the test of time for one reason: while other associated technologies have been pushed at mobile phone users, SMS’s growth was and largely remains driven by them as customers. The success of mobile video therefore depends on a number of barriers being broken down. These include the rate of adoption of higher bandwidths, lower cost pricing plans, and handsets that can cope with a greater amount of richer content.

I think that SMS is therefore going to remain the predominant mobile marketing tool. This leads us in to another question though: is content king or is mobile marketing just about communication?

Lee Bowden is Director of Piri Ltd, a solution provider for mobile marketing. Email: lee@piriltd.com