Cell phone medium creates advertising foray
Junk-mail filters and “do not call” lists have kept marketers from reaching consumers, but a trend that is already popular in Europe is beginning to take off in the States as businesses look for new ways to sell their products.
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Now that nearly all cell phones are capable of receiving text messages, businesses are using the technology to send promotions and up-to-the-minute information about their businesses.
“Text-based messaging has taken the cellular world by storm, so it is no surprise that marketers would want to transform cell phones into personalized multimedia advertising machines,” said President of the American Marketing Association, R.I. Chapter, Courtney F. Guertin. “Trends indicate that this new form of marketing will have groundbreaking achievement in the creation, execution and functionality of interactive advertising and marketing campaigns.”
Textalert.com, an online company operating in Europe, launched its first U.S. location in Boston this month and plans to add other locations in the United States and Canada.
“In the U.K. and in Europe, text-message marketing is embraced and it’s only a matter of time before it’s just as popular here,” said Textalert Marketing Director Sarah Hodkinson.
Businesses use Textalert by collecting cell phone numbers from willing customers and entering the numbers into the Textalert Web site address book via any Internet-connected computer.
The messages are typically used to inform customers of a big sale, when new shipments arrive, or last-minute promotions.
“A restaurant can send notice to customers at noon about happy hour at 5 o’clock and they will get the message instantly or a real estate agent can text a client about specific properties and make sales much quicker,” Hodkinson said.
Textalert is designed for small- to medium-sized businesses or organizations that want to market themselves inexpensively. It uses a pre-paid credits system and does not charge a subscription fee. It costs about 13 cents per message – 1,000 messages cost $171.45; 10 messages $1.80; 100 messages are $17.60. Text messaging through Textalert is less expensive than direct mailings, where the cost of a stamp alone is 37 cents.
Business owners may have some difficulty getting customers to sign on for text alerts since U.S. wireless carriers charge for messages received. Verizon Wireless charges 2 cents for messages received and 10 cents to send messages in its Rhode Island local plan.
Cell phone companies in Europe generally only charge to send text messages, not to receive them, Hodkinson said.
There is also some concern that businesses will take advantage of the medium and damage its reputation, as happened with e-mailing.
“E-mail could have been such a powerful marketing medium, but because people abused it with spam, it lost its effectiveness,” Hodkinson said, noting that spam is filtered out by junk-mail filters and unsolicited messages often aren’t read by recipients.
The “beauty” of text messages is they generally can only be deleted after being read, Hodkinson said.
“The real challenge will be monitoring text alerts for spam and other unlawful acts,” Guertin said. “Similar to e-mail, it will be important for marketers to employ ‘invitational marketing’ concepts, so consumers have a sense of control.”
Textalert advises businesses on good text-marketing practices, but said misuse is possible.
“We are not liable for the use of our service. A business may buy a list of cell phone numbers to send messages too – we do not advocate that. This is a new medium, and if it is abused, it will lose its effectiveness,” Hodkinson said.
The Federal Communications Commission’s rule imposing limitations and penalties on unsolicited commercial e-mails was revised Sept. 16 with provisions regarding text messaging.
With exceptions, the new rules effective Oct. 18 under CAN-SPAM – Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 – prohibit sending commercial electronic mail messages, including e-mail and certain text messages, to wireless devices. No one can use an automatic dialing machine to call a wireless phone or send text messages unless given prior consent.
