Successful Messaging Services: SMS [& MMS] 4 biz 2day

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SMS Delivers Content
While most text messaging today is peer-to-peer, SMS is also increasingly relevant as a distribution channel for content. Any brief and timely information is applicable for SMS delivery. "SMS is well-tailored for very basic informational alerts," says Larry Loper, VP marketing at Mobileway, a company that provides SMS-related services. "You can use it for almost anything—weather, security, traffic—where you're trying to push information out and have a record of it in somebody's handset."

Most major wireless carriers today offer subscribers an array of text alerts—like news, sports scores, weather, and horoscopes—delivered via SMS. Carriers source this content directly from content providers such as CNN or ESPN and also work through aggregators like MarketWatch, which currently provides a number of North American

Today, as most carriers look to build usage of SMS, much of the content they offer does not garner an additional charge beyond the few cents associated with receiving an SMS message. Those that come from well-known content brands may incur additional fees.

Carriers are also increasingly offering on-demand content services via SMS that are triggered using short codes. Short codes are five digit numbers that mobile phone users enter to generate a specific response. So, for example, a user might enter WETHR followed by a zip code to receive an SMS message containing the weather report for that area. Until recently, short codes were only issued by carriers and each code would only work for subscribers on a particular wireless network. The most well-known example is the AT&T Wireless sponsorship of American Idol. Only AT&T Wireless subscribers can use the short code IDOL to vote for contestants on the popular show. In 2003, the major U.S. wireless carriers agreed upon an infrastructure that enables common short codes. Interoperable short codes enable the same short code to be used by all wireless phone users, regardless of carrier.

"Now we've got common short codes; it provides a channel for the content providers to get to a whole range of wireless users," says Linda Barrabee, senior analyst for wireless and mobile services at the Yankee Group. Interoperable short codes pave the way for much more sophisticated content-on-demand applications to be initiated by content providers with the assurance that any mobile phone user will be able to subscribe or respond.

Common short codes, along with increased awareness of SMS, are expected to drive the growth of premium SMS. Delivering premium content over SMS requires that subscribers pay an additional charge beyond the cost of receiving a standard SMS message. This means that users can choose to receive a certain piece of premium content on their mobile phones and the charge for this content will appear on their mobile phone bills. Carriers will then share this additional revenue with the content providers.

Premium SMS holds the promise of using SMS as both transport and delivery mechanisms for content as well as the purchase point. Ringtones, songs, or other sounds that are customized to serve as the ring on a cell phone are already popular among younger people, and they represent an early example of premium SMS content. Today teens regularly pay a premium to have their favorite song as the ring on their phones. As SMS allows the transport of binary up to 140 bytes, ringtones can be transmitted to a user's phone via SMS with the charge appearing on that user's mobile phone bill.

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It's easy to see that the same reasons teens use text messaging—to send quick discreet messages and to receive timely information—also make SMS useful in a business setting.

At Verizon, Bartolomeo uses SMS daily with his sales force. He finds it to be the perfect medium to communicate with this mobile group. "There are times when we need to get a message to 120 people right away. You can't do this with a cell phone using voice. You can do it with voicemail in the office but people aren't at their desks anymore," he says. "And the brevity of the SMS message makes people get to the specific information that needs action.

Bartolomeo sees SMS growing in the workplace because of its immediacy and brevity. "Businesses are moving more from quarter-to-quarter metrics to day-to-day performance indicators. How else can you get that out to a mobile workforce everyday?" he asks.

Despite the upbeat outlook at Verizon, industry watchers say that SMS has been slow to take off as a business tool. Larson at CTIA says, "Carriers, advertisers, and third-party businesses are just beginning to see how wireless text messaging can create new links between customers and their business."

While using SMS as an internal communication and content delivery tool is still an emerging area in the business world, many companies have discovered the B2C potential of SMS. Entertainment and consumer brand companies that market goods and services to a younger crowd have been early adopters of SMS as a marketing and sales tool.

Greg Clayman, founder and VP of marketing at Upoc, a company providing a platform for SMS-based communities, sees companies beginning to use SMS for promotions, polls, contests, and voting. "The research is saying, ‘all of your fans now have mobile phones and these are capable of text messaging.' Consumer brands are looking to reach kids on their phones," according to Clayman. For example, a teen might buy a can of soda that touts an enter-to-win sweepstakes. Rather than pointing the consumer to a URL or 1-800 number, the can bears a short code that the buyer can key into his mobile phone on the spot to enter the contest. That user might then be given the option to receive additional coupons or other promotions via SMS.

Larson at CTIA explains, "We expect consumer short codes to grow into an important medium for consumer outreach from businesses. It's a fantastic way for the diehard fan of any product to stay up to date on the latest and greatest that company is offering." He continues, "These types of events where advertisers or businesses use text messaging to develop or strengthen customer relationships have proved very popular overseas."

As B2C use of SMS grows, it's likely to impact corporate use as well. In particular, as the current youthful users of SMS begin to move into the workforce, text messaging in the business world will likely increase. "All of these things in the consumer world have been helping to raise awareness and drive trial usage of SMS. In the corporate world, it's beginning to have an impact," says Clayman. In fact, Upoc has already seen adoption of its SMS community features by business users. Upoc enables users to create or join public or private SMS groups. Members of a group correspond via SMS with the rest of the group. Clayman says, "We found that companies were setting up groups to communicate amongst themselves informally. It's not integrated with corporate systems; it's just a sort of simple, painless way of setting up a list." Members of the group can then use this list to distribute corporate information via SMS. Upoc is currently investigating a corporate version of its community service based on demand from business customers.

Aside from some informal internal communication and B2C-focused promotions, SMS is still nascent in the business world. Barrabee sees several reasons for this. "The carriers haven't done a lot to build enterprise-focused SMS solutions," she says. "And it's still not a mainstream application on the consumer side." She does expect at least modest growth in this area, however, as SMS becomes more popular. "The consumer market will be a driver for some of the business applications," she says. "People start to use it in everyday life and then it spills over."

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