Commentary

5 SMS (Text Messaging) Advertising Myths

iPhone apps and WAP (mobile Internet) sites, often overshadow SMS (text messaging), as sexier ways to reach mobile phone users. But SMS is fast, effective and provokes action especially in teens and young adults. In fact, a new study from Local Mobile Search says SMS advertising generates response rates two to ten times higher than Internet display ads.

"While much of the ad industry is focused on the iPhone and other smartphones because of the buzz and excitement surrounding these devices, they currently represent only 15% or 16% of total handsets in the U.S.," says the report authored by Opus Senior Analyst Greg Sterling.

But, everyone is texting, especially the under-25 crowd. According to Nielsen Research, teens and young adults say they send almost 3,000 text messages per month compared to making only about 200 calls. That's astounding. So, with that kind of reach, why do some advertisers and marketers tend to ignore it for iPhone apps and mobile web sites?

Lack of understanding. Here are the top 5 myths about SMS advertising we hear everyday:

1. SMS advertising is intrusive.
False. There are very strict guidelines around how and when you can advertise via text messaging. Users must explicitly "opt-in" to receive SMS advertising from a company or engage in a free SMS service that is ad-supported.

2. SMS advertising doesn't have scale or reach
False. ChaCha and 4Info are the two largest SMS players. ChaCha reaches over 2 million monthly unique users (mostly under 25) and serves over 30 million monthly impressions. When you compare that to digital properties and TV or cable shows that reach this audience, it is very competitive.

3. SMS advertising only reaches teens
False. While teens and young adults are 3X more receptive to mobile advertising than their parents, that doesn't eliminate the power of text messaging when it comes to reaching the over 25 crowd. In fact, text messaging among all mobile phone users tripled from 2007-2008 with a reported 2.7 billion text messages sent every day.

4. SMS advertising is only good for direct response
False. SMS is a great way to directly reach users to drive calls, ticket sales and downloads, but it is also an effective way to increase brand metrics (aided, unaided awareness and affinity) by engaging users in conversations about a product or a service.

5. SMS advertising isn't very creative


False! According to many marketers, mobile web sites and mobile banner advertising are the "be-all, end-all," with their ability to deliver splashy, colorful landing pages, images and videos on a mobile phone. But SMS is perhaps the MOST creative way to reach mobile users because it delivers the "holy grail" to advertisers -- the ability to have a direct, 1:1 conversation with a consumer about your product and service.

SMS advertising works. The opt-in process for SMS marketing translates into more targeted advertising and ultimately better results. And even more interestingly - SMS (text messaging) advertising enables marketers to enter into a real dialogue with consumers - something marketers aspire to, but rarely achieve. Studies performed by InsightExpress and Dynamic Logic show that this type of mobile advertising performs better than traditional online advertising across brand metrics including unaided awareness, mobile ad awareness, band affinity and purchase intent. Smart brands like Paramount, the Obama campaign and IKEA are onto this and are using it in unique and creative ways to drive brand metrics and direct response.

9 comments about "5 SMS (Text Messaging) Advertising Myths ".
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  1. Andrew Ettinger, August 13, 2009 at 8:40 a.m.

    I liked your article and the premise I agree with. You are totally right- people are so in love with iphones they forget the actual small % of them in the US. However, I am not sure I agree with some of your factual assertions. For instance, 2 million monthly uniqies for ChaCha/4Info is tiny compared to major websites or even cable TV shows. Furthermore, the index of People 25+ who use texting is still very small. Certainly it is growing but 35+ under uses text by a huge margin compared to the other age groups.

  2. Susan Marshall from ExactTarget, August 13, 2009 at 9:44 a.m.

    Hi Andrew. Thank you for your comments!

    We hear you.. and we hear that from many agencies and marketers. So, we went to Nielsen and pulled some data to find out for ourselves. For instance, we were not surprised that we didn't reach more 18-24 year olds than American Idol, but when we looked at regularly scheduled shows for the 2008-2009 season, we were happy to see that ChaCha out-delivered all cable shows for 18-24 years olds. We were ranked 3rd in this universe for this demo, reaching more users than Family Guy, The Simpsons, America's Got Talent and other highly rated shows. In the online universe during June we ranked 54th among 12-17 year olds and 64th among 18-24 year olds. We out-delivered high profile sites including MTV.com, Nick.com, NBC.com, NBA.com and People.com. Not in the top 25 as compared to online properties, but not bad either if buyers want to reach and engage these key demos.

  3. Thomas Sherman from arrow, August 13, 2009 at 10:33 a.m.

    We do global advertising. What is interesting are the global stats. THere are 4 BILLION CELL PHONES that text. There are 28.5 million blackberrys and 24 million Iphones -- do the math!! They are a niche globally.

    We have been using some tools from a company called
    http://www.redoxygen.com/

    They allow us to send text messages from boston to Bangkok from out Micoosoft Outlook and CRM systems

  4. Kirsten Mcmullen from 4INFO, August 13, 2009 at 10:46 a.m.

    Hey Andrew!
    I had to chime in at response to your comments as well. At 4INFO we have closer to 10 million monthly uniques, and like ChaCha, we've gone to Nielsen to see how they're measuring our audience. Across our network about 60% of our users are between 24-54 years old. Although texting is certainly more heavily utilized by younger folks, it seems that getting ) information by text is popular with that demographic as well.

  5. Andrew Ettinger, August 13, 2009 at 12:01 p.m.

    @Kirsten and @Susan- yes, you have more uniques than one TV show but how much would it cost to reach each one of them over the course of one month versus advertising one commercial on one just on TV show airing? In order for digital to grow, we need to compare apples to apples versus TV.

  6. Gary Schwartz from Impact Mobile, August 13, 2009 at 2:16 p.m.

    Andrew,

    100% agreement. Follow the consumer. Watch the consumer. They are doing two things in your stores, malls, streets: using their phones to browse and text.

    But the shopper is certainly not scanning 2D codes with their phones. They are not opening the security on their Bluetooth settings for inbound offers. They are not all downloading and sticky to a brand’s vanity app to their phone.

    The consumer‘s mobile and online toolset is similar; they are both using their browser and messaging as the first data-click. The CMO has to focus on these channels.

    Take a Google back into the ‘90s and look at the then-emerging trends on the internet. History tends to repeat itself:

    The WEB browser was becoming standard on the desktop in the mid-90s. During this period of enormous growth, businesses entering the Internet arena scrambled to find consumer models that worked.

    Many companies were lured into thinking that developing applications on the desktop would give them market share and consumer mindshare: they did neither.

    The desktop become too fragmented and difficult to navigate. As the PC browser matured and the speed of the Internet pipe increased, server-side solution that functioned INSIDE the browser i.e. "ASP Applications" became standard fare.

    Isolated in the browser, these in-browser solutions need a communication channel to engage and reengage the subscriber. ASP applications used email as this retention tool.

    We are presently reinventing the wheel with mobile.
    With the smartphone revolution, apps are the rage. “I-want-one-too” CEOs are running to their agencies and IT department and developing application that only five percent of consumers are returning to after a lonely month on the phonetop.

  7. Lisa Foote from MixMobi, August 14, 2009 at 6:08 a.m.

    Thank you for an excellent article -- great, thoughtful comments as well.
    The recent iPhone backlash may be part of a rolling wakeup call. Gary, I enthusiastically agree with your analysis. We are going through very much the same evolution now on the handset -- just at greater speed. (I'm going to steal your "I want one too" CEOs line.)

  8. Carolyn Moots from SIMRY, LLC, August 17, 2009 at 11:25 p.m.

    However, Andrew, you must remember that SMS is opt-in - people CHOOSE to hear, real-time with a specific real-time message, guaranteed delivery, no one leaving the room, turning the channel, or DVR'ing, listening in another room, etc. SMS does not and is not specifically designed to REPLACE TV or other media - but it is VERY viable in a media mix, can be promoted in other media (much like advertisers used to reference print in broadcast advertising), etc. AND, again, delivery directly into their hands with a very high percentage opening. Will that change as SMS evolves and/or permeates advertising/marketing. Perhaps - but NOW is definitely the time to be forward-thinking:)

  9. Michael Dirmeikis from SMS Text Marketing, August 19, 2009 at 1:16 p.m.

    I wholeheartedly agree with Susan's article. We have provide mobile marketing services for over three years, and our experience reinforces the KISS principle. We're often seduced by technology, losing sight of the objectives; building the brand, reaching the highest number of eyes, providing consumer value, driving revenue AND profit, and keeping it simple. SMS does all that.

    Why does the supermarket industry spends boatloads of cash on newspaper inserts? Because they're simple for consumers to access, and redeem. Yet at many chains, at checkout, they also pump out millions of trees worth of register coupons. Redemption rate of those? Around 3%. Technologically superior, involving data mining software to determine which products should be included based on shopping basket history. An expensive solution that produces marginal returns, forcing supermarkets to continue the "antiquated" coupon inserts. KISS.

    When a restaurant is having a slow period, will an iPhone app drive immediate traffic? An SMS broadcast offering 2 for 1 drinks, or free appetizer certainly will. Everyone thinks in terms of the national brands, and ignores the local businesses. With the right form of advertising, any size business will profit from mobile marketing, at low cost. Engagement is easy, reach is immediate, and, contrary to perception, almost all consumers can read a text message.

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