Advertisers to Consumers: We’ll Text You

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Article Link: http://online.wsj.com/public/article/SB121185056833021519.html

 

Cellphone Messages
Find a Mobile Niche;
Customers Ask for It

By EMILY STEEL
May 27, 2008; Page B4

Analysts like to make bold predictions about the growth of mobile advertising. Most have overshot reality.

But at least one slice of the business appears to be catching on, according to marketers: ads sent via text message. A growing number of companies are using cellphone text messages to lend more interactivity to their ads. For instance, Coors Brewing’s Coors Light beer recently added a text-message component to its traditional sponsorship of the NFL Draft. Football fans opted to receive draft alerts, and each message contained a squib about Coors Light.

Some marketers like text-message ads because — unlike most ads — viewers asks to receive the message, which means the marketer doesn’t bombard the viewer with unsolicited commercials. The potential audience is also attractive: Almost all cellphones can send and receive text messages. Finally, marketers say, the results of text-message ads are much easier to measure than those of mobile Web ads.

On Tuesday, Silicon Valley start-up 4INFO, one of the most-active players in text-message advertising, plans to announce a new trial partnership with Yahoo. Under the arrangement, 4INFO provides the technology for Yahoo to publish its content, such as news updates, horoscopes, sports scores and weather forecasts, via text messages that also contain a small ad. Consumers sign up online to receive the alerts.

Yahoo can sell the ads alone or as part of a broader online-mobile ad package, or, alternatively, 4INFO can sell the ads through its mobile-ad network.

Ad executives report click-through rates with text-message ads of 1% to 10%, a significant jump from the figures for Web banner ads, which are typically only a fraction of that.

Those higher rates, of course, could be attributable simply to the newness of text-message advertising. And, for marketers that do text-message marketing, there are challenges. One is limited space. Of the 160 characters allowed in a text message, typically 120 are reserved for content, which leaves only 40 for the ad. Often, the message is simple: “Sponsored by The All-New Toyota Corolla” was the tag line for a recent campaign with IAC/InterActiveCorp’s online invitation service Evite.

Mobile-message advertising is expected to reach $1.5 billion by 2008, up 82% from last year, according to research firm eMarketer. Spending on mobile-message advertising now accounts for about 88% of the total $1.7 billion spent on mobile ads, which also includes search ads and display ads as well as mobile Web advertising.

On top of its new pact with Yahoo, 4INFO, founded in 2004 by Zaw Thet, now 27 years old, has struck similar deals with big media companies from General Electric‘s NBC Universal to IAC and newspaper company Gannett, which owns a stake in the company. 4INFO, which says it reaches eight million unique visitors a month, usually splits the ad revenue with the media company 60-40, with the majority going to whichever party makes the sale.

With these ads, a phone number to text is typically embedded in a print or TV ad. Consumers send a text message to that number to receive the content, which is sponsored by a marketer.

“A newspaper is produced once daily. With the text messages you can layer in interactivity, whether it be stock quotes, sports scores or updated weather,” says Matt Jones, director of mobile strategy for Gannett.

Among the marketers that Gannett has sold ads to are Marriott, which recently sponsored a print-and-mobile ad combination in USA Today, and Radio Shack, which is sponsoring free sports alerts from the paper’s Web site.

Other companies that compete in text-message advertising include YellowPepper and HipCricket. Like 4INFO, HipCricket has focused on bringing new life to old media through mobile ads. HipCricket works with radio and TV stations to create programs like mobile loyalty clubs for listeners to join. Then, both the radio stations and its advertisers market to this group via their phones.

Using text messages to deliver ads isn’t completely new. A company called Screenvision, which uses text messaging along with commercials on movie screens, launched its network in 2005. Since then, it has expanded its approach. Starting early next month, Screenvision, whose advertising network is made up of more than 14,000 screens in 2,300 theaters, will test a live-polling feature that is activated by text messages. Audiences will be polled on music, movies or other entertainment-related topics, and then can vote. The results will be immediately tabulated and flashed up on the screen.

Verizon Wireless, a joint venture between Verizon Communications and Vodafone Group, is the first sponsor of the polling service. The campaign includes a two-minute original film (“VCast Street”) directed by Spike Lee, and VCast-branded popcorn bags.

Write to Emily Steel at emily.steel@wsj.com

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