SMS Marketing Gets the Nod

Eight in 10 mobile users are open to SMS marketing and promotions; operators are missing out on key revenue opportunity, says Empower study

May 12, 2004

3 Min Read

LONDON -- 84% of European mobile users are willing to receive SMS marketing and promotional offers on their handsets, yet the marketing community is failing to capitalise: just 18% of marketing and advertising agencies currently offer mobile messaging to clients, and a worrying 57% have no immediate plans to do so in the future.

Mobile operators admit that less than 10% of their current application (i.e. non person-to-person) traffic falls into the mobile marketing category, however the majority are optimistic about future prospects, with 57% confident that mobile marketing will constitute a significant revenue stream, and 24% claiming it already does.

These are the results of a study unveiled today by Empower Interactive and its partner, Firedog Design. Three parallel research projects were undertaken to canvass the opinions of mobile users, marketing and advertising agencies, and mobile network operators across Europe.

When asked to identify the biggest barriers to growth in the sector, 38% of operators cited lack of consumer acceptance. Marketers viewed this as an even greater issue, with 58% seeing it as a key obstacle.

However, Empower Interactive’s parallel mobile subscriber survey found that the vast majority are willing to embrace carefully targeted text promotions, with special offers, e.g. from local bars and restaurants, loyalty programmes (e.g. Air Miles, Nectar etc), and service promotions from mobile operators being cited as the most welcome services.

More encouragingly, the report points to a rosy future for mobile marketing. Increasing use of multi-media messaging (MMS) containing music video, TV or movie clips is seen as a key growth driver within the industry: an opportunity borne out by the massive 70% of mobile users who claimed they would prefer to receive multi-media marketing content than a straight text message.

To support future growth of this sector, the majority of mobile operators are already thinking about the additional requirements for MMS: 25% already have infrastructure in place and a further 55% plan to do so; 5% of these are already running a pilot.

Richard Shearer, CEO at Empower Interactive, commented: “Our experience of the mobile industry suggests the operator community is well aware of the potential of marketing its own services via SMS, and is keen to maximise the opportunities presented by carrying large-scale messaging campaigns for third parties.”

“Operators are aware that in order to deliver sufficient Quality of Service for such campaigns, protect their own brands and to fully exploit the revenue opportunity, they need to offer sufficient control, management, intelligence and flexibility within the network. More than three quarters of those surveyed are upgrading their networks to support future growth.”

“We were quite surprised that agencies have largely ignored the potential revenue stream offered by MMS/SMS. When SMS marketing first came to light we were promised all sorts of interesting applications that were sure to make our lives easier. Our research discovered that the vast majority of consumers are willing to accept promotions from local entertainment venues or retail operations, yet advertisers and their agencies seem unprepared to take advantage of the benefits offered by SMS/MMS marketing,” comments Fraser Black, Managing Partner at Firedog Design.

Empower Interactive Group Ltd.

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