Spurred on by new regulations and the ever-present need to target young consumers, U.S. marketers are beginning to recognize the marketing possibilities of cell-phone text messaging. They are increasingly exploring new initiatives, with both Coca-Cola and Procter & Gamble recently launching text tests, while a crop of new software companies have sprung up offering services in the area.
Many of the companies that specialize in text messaging, such as Mobliss, MBlox and Telenor Mobile, have launched in the past year. But traditional agencies are also starting to offer services in the sector. Mark Timbrell and Wes Bray, co-founders of Interpublic Group direct shop Marketing Drive, recently opened mobile-phone marketing shop Mynamics in London and Essex, Conn., to help agencies and clients develop text-messaging efforts.
Although sources pegged 2003 spending on text-message marketing at only about $10 million, that could grow to as much as $5 billion or more by 2005, according to Forrester Research in Cambridge, Mass.
"We're seeing [text messaging] as an important enabler for communication with teens and young adults," said Doug Rollins, associate brand manager at Coke, which tested its first U.S. text messaging in a program that began Oct. 1 for Cokemusic.com.
The number of Americans with cell phones—at least half of whom are 18- to 24-year-olds—has reached nearly 160 million this year, up from 140 million in 2002, according to the Cellular Telecommunications & Internet Association in Washington. Of the new cell-phone subscribers in 2003, 60 percent are 18-24, according to San Francisco-based telecommunications consultancy and research company Telephia.
With the CTIA's October introduction of "short codes," a class of five-digit phone numbers, marketers' ability to interact with consumers via cell phones became simpler. Coke's effort follows in the footsteps of Coke in Germany, which has been using text-messaging for the past year. The U.S. campaign featured Coke's short code on point-of-sale materials and touted promotions that allow Coke drinkers to win prizes such as a bike signed by Lance Armstrong.
P&G in October partnered with M-Qube in Boston and Publicis Groupe's Arc Marketing in Greenwich, Conn., for the "Dare to Streak" campaign, which urges consumers to use the short code "DARE2" to participate in a Clairol Herbal Essences sweepstakes.
"It is about bundling what consumers' needs and desires are with what is possible in new communication technology," said Nelson Miranda, brand manager for Clairol Haircolor.
The first industry guidelines for wireless campaigns, unveiled by the Mobile Marketing Association last week, seek "to make sure what's happening in e-mail marketing does not happen on cell phones," said Peter Fuller, executive director of the MMA in Mountain View, Calif. The guidelines state in part that consumers must "opt in" to all mobile-messaging programs and must be allowed to "easily terminate or opt out" of an ongoing program. Partners in the guidelines' development include Carat Interactive, P&G and The Weather Channel.