The Text Files

Long after Fantasia Barrino wends her way to the used-CD bin of history, the show that made her famous, Fox’s American Idol, may be remembered for its role in an American revolution—one based not on music but on the idea that cell phones can be used for something other than making a phone call.

Observers credit American Idol and sponsor AT&T Wireless for jump-starting text messaging (aka SMS) in the U.S. During the past season, AT&T Wireless subscribers sent a total of 13.5 million Idol-related text messages involving everything from voting to participating in sweepstakes. That was 80 percent more than the previous season. Forty percent of the senders were first-time AT&T Wireless text messagers.

“The very first time [consumers] text, they usually need a reason,” says Glenice Maclellan, vp of messaging services at AT&T Wireless in Redmond, Wash. Adds Avi Greengart, wireless analyst with Jupiter Research, New York, “American Idol probably did more to popularize SMS than anything else.”

As its name implies, text messaging involves the use of a mobile device to send text. For most people, it is the first step in transmitting data over their phones, an activity that can encompass everything from downloading ringtones to forwarding a note to a spouse about what groceries to buy on the way home.

Those applications are increasingly a mainstream phenomenon in the U.S. Technology-research company In-Stat/MDR predicts wireless subscribers will send 30.2 billion text messages in 2004, up from 11.9 billion last year. An estimated 90 percent of the cell phones in the U.S.—which has 165 million wireless subscribers—have that capability.

What mobile-data users have in common, In-Stat says, is not so much demographics as a general affinity for their cell phones: They use 42 percent more voice minutes than non-users, leading to monthly bills that are 19 percent higher.

Yes, the U.S. mobile-marketing revolution is upon us, and marketers are grappling with what it means for their brands. “It’s a means of communication that is untethered, so it’s like walking around with a remote control,” says Jeff Glass, founder of Boston-based wireless company m-Qube.

To this point, the rapid pace of mobile-data adoption has been lost on most marketers, says Wes Bray, chief mobile marketer at Mobilopia in Essex, Conn., which works with advertisers such as Major League Baseball, Clear Channel and MasterFoods on wireless campaigns. The former MCA executive says getting advertisers to use the platform isn’t always easy. “They need to know that this is really mainstream,” he says.

It might be getting there. This summer, major marketers such as Warner Bros., McDonald’s, Anheuser-Busch, Nike and Kellogg began running campaigns that featured, or were entirely based on, a mobile component.

Before delving into how marketers are implementing the technology, here’s an important word from its supporters: This revolution will not be telemarketed. Legitimate marketers are trying to create a wireless world in which users initiate contact, not vice versa. Thus, you most likely won’t see what was once feared: a cell-phone user getting an unsolicited come-on from Ronald McDonald while walking by the fast-food restaurant.

“Like anything else, mobile marketing needs to provide value to both the consumer and the advertiser,” says Carrie Himelfarb, vp of sales at Vindigo Studios, which has been involved in the wireless business since 1999.

The hope is that, unlike the Internet, mobile can live up to its promise without intrusions like pop-up ads and spam. Many programs ask users to opt-in not once but twice. The Mobile Marketing Association, an industry trade group, is working to enforce a strict code of content, telling its members to promise consumers six C’s: choice, control, constraint, customization, consideration and confidentiality. “Everyone is scared to death about spam,” says Peter Fuller, MMA’s executive director.

Adds Jack Philbin, president of Evanston, Ill.-based Vibes Media, “It’s too personal. It’s on your hip. It’s everywhere you want to go.”

Some marketers, then, are tiptoeing into mobile with uncharacteristic restraint. On, for example, users are told in no uncertain terms that they may be charged for the messages they send and receive, and that they must register to participate in a promotion for Harry Potter and the Prisoner of Azkaban. First they must fill out a Web form, then a registration code is sent to their phones that must be entered into the site to complete the process. Only then will they get movie updates, Potter facts, SMS polls, games, ringtones, wallpapers, etc.

Unlike in the free-for-all e-mail world, mobile carriers are gatekeepers of their networks, so they can more efficiently shut down spam. They police which advertisers want to run promotions and sometimes even refrain from sending unsolicited messages to their own subscribers. Giving customers a positive experience, they say, comes first. “We don’t want to appear that we’re spamming,” says Amy Wilson, senior product manager at the QuickReach unit of Cingular Wireless, which manages the carrier’s text-messaging platform.

As careful as companies are about protecting their customers, wireless companies are still the best place to look for what constitutes state-of-the-art in mobile marketing. Of course, for them, the benefits of such deals go a lot further than marketing; they introduce a bright and shiny new revenue stream. The basic cost per text message can range from roughly 3 to 10 cents, and as with pay phones, that small change can add up.

Take, for example, Cingular’s three-day “America’s Tribal Council” promotion in May, tied into Survivor: All-Stars, in which subscribers from any carrier could, among other things, vote on which of the show’s alums should win $1 million. Cingular subscribers could download the show’s theme song, photos and other content directly to their phones. Over the course of the three days, wireless users sent 3 million text messages. “We’re seeing a huge percentage of people who never sent us a text message before,” notes Wilson.

Cingular’s current “Rock the Vote” mobile effort marks the first time the youth-focused get-out-the-vote program has had a wireless component. The initiative, also sponsored by MTV and Motorola, heavily brands the sponsors on all materials as it attempts to sign up voters (registration forms can be requested wirelessly), poll them on political issues and, as Election Day nears, give registrants lists of polling places. Users can also download ringtones from artists ranging from Kinky to the Dixie Chicks and participate in contests that could win them backstage passes to gigs on the “Rock the Vote” concert tour.

According to David Rudd, Motorola’s director of emerging consumer marketing, the program isn’t explicitly about selling the company’s mobile devices. “We do get our name out there a bit,” he says. “But one of the keys for us is to be able to show you that technological leadership.”

Hooray for technology, but let’s face it: The story of telecoms (and their relatives) finding ways to increase usage is older than AT&T Wireless’ recently revived “Reach out and touch someone” jingle. The real clues about what mobile means for advertising will come when other marketers jump in. Some already have, and while the results are spotty, the potential seems vast.

For the first time this year, Anheuser-Busch has added a wireless component to its annual Bud Light/Maxim Double Exposure series of summer parties, targeted to the 21-27 age group. A-B has deployed teams in 31 markets to go into bars and use a laptop and a projector to broadcast text messages. Patrons are encouraged, for instance, to come up with a better caption than one appearing in Maxim; buy Bud Light for people in another part of the bar; and use text to get the attention of anyone in the bar. Messages are projected on a Bud Light-branded screen, setting off a chain reaction of user-initiated entertainment. The brand is also displayed on users’ mobile phones if they participate.

“The challenge with Bud Light is that you’ve got to stay on the cutting edge,” says Bill Decker, product manager for the brand.

The impact on sales, of course, is difficult to gauge. And an ongoing dialogue with consumers isn’t assured. The company’s main objective is to let consumers know that “Bud Light understands what they are all about,” says Decker.

While A-B will reach only a small portion of its target, McDonald’s, which launched its Olympics-related trivia-game promotion with AT&T Wireless late last month, will get a huge window into the potential of wireless due to its sheer size and scope.

“It was kind of a combination of objectives that came together,” says Karlin Linhardt, senior director for young-adult marketing at McDonald’s. Among them: a chance to see how embedded text messaging is within the fast-food giant’s customer base. “We thought it was a fun way to dip our toe in the water,” Linhardt says.

The promotion calls for 250 million McDonald’s bags to be imprinted with one Olympics-related trivia question. (AT&T Wireless and McDonald’s are both Olympic sponsors.) AT&T Wireless customers who enter the short code 2004 and answer the question will receive weekly trivia questions as part of an awareness-building campaign. For now, the company isn’t offering prizes or conducting a sweepstakes but is billing the effort as the largest “on-packaging text messaging” promotion ever in the U.S.

The advantage of holding a promotion in real time at the point of purchase is startling: It’s easy to picture someone playing the game while downing a few Chicken McNuggets, then throwing the bag away and moving on. It’s harder to see someone taking the bag home to play.

Exactly what McDonald’s can expect isn’t known, as solid data on wireless response rates at this point is essentially nonexistent in the U.S. In text-saturated Europe, response rates often reach 8 percent, according to London-based mobile-marketing specialist Flytxt.

Of course, many European marketers know how to make mobile marketing work for consumers, offering enough payoff to ensure that opting in is worthwhile. According to some stateside experts, U.S. marketers still have a way to go.

Steve Weinswig, COO of Publicis’ Arc Worldwide unit, points to Nike’s New York-only mobile game launching its Air Force-X MID shoe in May as an example. Registrants received text messages urging them to find 16 posters around the city, with points awarded for speed and number found. “The payoff was that you get a pair of shoes early,” Weinswig says. “To me, that’s not a big payoff.”

Perhaps Americans—and American marketers—are still mostly out of the loop on mobile marketing because they have been conditioned to think of U.S. wireless usage as woefully lagging that of overseas markets. If the predominant image in Japan is of fashionable schoolgirls text messaging friends while playing games on their personalized Hello Kitty mobile devices, the corresponding tableau here may be the casually dressed, thirtysomething executive drinking a latte in a WiFi-ed Starbucks while punching keys on his anorectically thin Sony Vaio. The ubiquity of the Internet has relegated our phones to a supporting role in the digital revolution.

“We’re supersized [in the U.S.] with our Internet access,” says Patrick McQuown, president of wireless specialist Proteus. “We have it at work. We have it at home. We have it at Starbucks. We have it at McDonald’s.”

Proteus is among a small number of companies that have successfully exploited mobile’s big advantage: that users have it with them almost all the time. Among other efforts, the company has run real-time text-message song-request programs for live acts including Fuel, Ashanti and Barenaked Ladies, interactions that were virtually impossible before text messaging began to take off.

One way to tell that U.S. mobile marketing has truly become mainstream will be when the payoff isn’t just entertainment but utility, which may also be the most likely way to rope in older demographics. In Europe, some grocery stores give visiting customers downloaded coupons that can be scanned at the register, a massive improvement over clipping coupons.

The idea is more talk than reality on this side of the pond, but there are exceptions. Some airlines, including United and American, offer text-messaged flight-status notification. Receiving a message that one’s flight is delayed wouldn’t be considered advertising, but over the long term, efforts like that can burnish the brand.

So when is it time to open the marketing purse strings? Wireless proponents, of course, say the time is now, but others are not so sure. Forrester Research, for one, said in December that even though mobile marketing has begun to gain traction here, marketers will see a better return from e-mail and online advertising through 2005.

Meanwhile, there’s a good unscientific way to monitor the progress of the mobile revolution: seeing how much time people spend staring at their cell phones.

In this country, we often appear disconnected from our mobile devices—we talk into an earpiece while the unit is attached to a belt buckle or buried in a purse. In other parts of the world, where not only SMS but its sexier descendant MMS (which includes color graphics and sound) are commonplace, people spend a lot of time looking at their phones.

When that happens here, it’ll be high time to jump in.