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Mobile (SMS) Seen As Top Growth Method for Email List Building

According to a recent report from email marketing firm ExactTarget, mobile (SMS in particular) is anticipated to be the fastest growing method used by email marketers to capture opt-in consumer email addresses. ExactTarget's survey found:

Mobile capture was barely on the radar in 2008. While only 2% of marketers used the tactic in 2008, 12% plan to use it in 2009. This represents a six fold increase in adoption, making mobile capture the fastest growing list growth tactic in relative terms.

Here are the top tactics used in 2008:

Here's more forward-looking survey information:

The report promotes the immediacy of SMS as an effective way to gain consumer opt-in to receive marketing materials:

Mobile capture lets consumers text their email address to a shortcode to register or receive information via email. Because mobile phones are close at hand, this method decreases the proximity barrier associated with display and print advertising that encourages consumers to subscribe to online communications. In the past, consumers had to recall a promotion and the associated URL to register—now they can register immediately.

QSR Chain Qdoba Does Mobile Rewards with Tetherball

Qdoba is the latest "quick service" restaurant to push into mobile. Competitor Chipotle offers online and mobile ordering. Qdoba is using Tetherball for its mobile marketing and loyalty program. According to the press release out this morning:

Tetherball’s fully customizable permission-based text messaging mobile marketing platform allows brands to intimately interact with customers through their mobile phones and allows loyal customers to benefit instantly from offers. The Qdoba Mobile Rewards program kicked off at an Indianapolis market festival during which nearly 20 percent of festival attendees engaged the mobile program – indicating strong acceptance of offers made via mobile.

Unlike other mobile marketing programs, no downloading of special software or an expensive mobile data plan is necessary. The solution is simple and it works on any phone. Tetherball clients’ mobile loyalty programs have seen up to 24 percent redemption rates on initial opt-in offers followed by 10 percent redemption rates on proceeding offers — substantially better results than the less than two percent redemption rates offered by traditional paper and online coupons.

In the restaurants at the point of sale, consumers are prompted to text the word “BURRITO” to a short code to opt-in to the program. They then receive promotions via SMS that also direct them to nearby restaurant locations.

Fast food restaurants, because of their focus on younger audiences, are among the early adopters of mobile marketing, promotions and mobile loyalty programs. And, indeed, as the PR materials above suggest, these programs do work. 

Here's our prior write-up of Tetherball and its novel RFID couponing program. 

Improved Facebook iPhone App Coming Soon

Facebook is getting ready to launch an improved and expanded app for the iPhone. According to a post yesterday, the new app has a range of enhanced features that make it more mobile self-sufficient:

1. The "new" News Feed
2. Like
3. Events (including the ability to RSVP)
4. Notes
5. Pages
6. Create new photo albums
7. Upload photos to any album
8. Zoom into photos
9. Easier photo tagging
10. Profile Pictures albums
11. A new home screen for easy access to all your stuff, search, and notifications
12. Add your favorite profiles and pages to the home screen
13. Better Notifications (they link to the comments so you can reply)
14. Quickly call or text people right from the Friends page
15. Messages you are typing will be restored if you quit or are interrupted by a phone call

Push notifications -- now possible in the iPhone 3.0 software -- won't be part of this release.

Mobile access to social networks is growing according to our data and third party reports. Earlier this year Facebook reported that it had 25 million mobile users around the world, with 4 million daily mobile users. That was in February and those numbers are probably larger now.

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Update: Video uploads are part of the new app as well (via TechCrunch). The new iPhone (with video) was reportedly driving a 400% daily increase at YouTube. Facebook can probably expect a comparable onslaught when it releases (and Apple approves) the new app. 

Orange Gets the Pre in UK

UK carrier O2, owned by Spain's Telefónica, has won an exclusive deal for Palm's Pre in the UK market, according to the Guardian. The carrier is also the exclusive source of the iPhone in the UK.

O2 is the UK's leading carrier by market share, followed by Vodafone, Orange and T-Mobile and finally Hutchison's 3.

There have been persistent rumors that Deutsche Telekom is looking to sell its UK T-Mobile unit. The leading contender is reportedly Vodafone, although Telefonica may also be interested to preserve its market-leading position. That may create a bidding war for the T-Mobile unit. 

Survey: Non-Smartphone Owners Confused by Options

Best Buy Mobile commissioned GfK Roper to conduct a telephone survey (n=1,000) about Americans' mobile usage behavior and buying intentions surrounding smartphones. Poll respondents were equally split among men and women. All were over 18. Here are some of the data:

• 20% of respondents said they own a smartphone (higher than the general population)
• "A sizable segment of those in their 20’s and 30’s in particular consider it a purchase they plan to make in the year ahead." 
• Among non-smartphone owners, 47% report being confused by the options and prices (cost of ownership)

Other reasons inhibiting smartphone purchases among the survey respondents: 

• 39% do not own a smartphone because they hate shopping for electronics products, with 45% of women in particular expressing this concern.
• 52% of women and 42% of men are confused about which model smartphone to buy, and more than half (53%) of adults over 50 express this confusion.
• 64% of Americans say they do not own a smartphone because they believe the devices are too expensive. This sentiment is particularly felt in the South.
• 49% of Americans without smartphones now believe that people who use smartphones are too connected to their jobs at all times, particularly the older generations who tend to view smartphones as more functional than fun. Only 30% of adults 18-24 feel this way versus 60% of adults 35-49.

Comment: there were no brands or models mentioned in the press release. My guess is that there's lots of brand recognition around the iPhone and maybe BlackBerry and the confusion starts thereafter. I suspect those data are somewhere in the mix but just not among what was publicly released.

This is the significant finding among those above: 64% of Americans say they do not own a smartphone because they believe the devices are too expensive. This is what we've repeatedly seen in our data. 

Additional findings, among smartphone owners:

• 58% feel it is important to be able to listen to music on their mobile phone
• 41% feel it is important to be able to engage in social networking such as Facebook, MySpace or Twitter
• 36% said being able to play games is important

SMS attitudes and usage:

• 62% [of mobile phone owners] say they use text messaging
• 37% say they use texting to avoid long or tough conversations, and over one-quarter (27%) say they use it because they dislike talking on the phone.

Gender differences:

• 71% of women said sending text messages is “very important” vs. 46% of men.
• Taking digital photos with a phone was also “very important” to 55% of women compared to 30% of men. Women also shared that listening to music on their mobile device is “very important” (44%) compared to only 25% of men.
• Men surveyed were more likely than women (46% versus 39%) to say that it is very important that their phones have calendar applications that link back to their computers. But in nearly all instances, women considered features and applications - including video games - “very important” more than men did. Fourteen percent of women ranked playing games as very important compared to 9% of men. Men were also clearly less interested than women in reading books on their phone: all of the 8% of respondents that were very interested in this application were women.
• Women were also more likely than men to use their mobile phone’s GPS system: 51% of women, compared to 33% of men, considered getting directions on their phone “very important.”

In our most recent consumer survey data report we found that 20% of respondents who did not own smartphones were intending to buy one within the next 12 months.

Legal Minefield Awaits in Mobile Marketing

A new group called the Mobile Advocacy Coalition has formed to combat a legal ruling handed down earlier this month by the US 9th Circuit Court of Appeals in a case called Satterfield v. Simon & Schuster. Book publisher Simon and Schuster generated a text message promoting a Stephen King novel to plaintiff Satterfield, who had previously downloaded a ringtone from a mobile marketing firm (not explicitly affiliated with publisher Simon & Schuster). The marketing message to Satterfield was unsolicited and a class-action lawsuit followed.

The reference to TCPA below is to the Telephone Consumer Protection Act of 1991. Here's the 9th Circuit's discussion of the factual and procedural background:

Satterfield filed suit, alleging a violation of the TCPA for Simon & Schuster’s transmission, of this unsolicited text mes- sage to her and other class members’ cell phones, by an Auto-matic Telephone Dialing System (“ATDS”). Simon & Schuster moved for summary judgment, arguing that (1) it had not used an ATDS, (2) Satterfield had not received a “call” within the meaning of the TCPA, and (3) Satterfield had consented to the message and had not been charged for its receipt. The district court granted the summary judgment holding that (1) Simon & Schuster and ipsh! had not used an ATDS and (2) Satterfield had consented to receiving the mes- sage. The district court did not rule on Simon & Schuster’s argument that a text message is not a “call” under the TCPA. 

The TCPA requires consumer consent to receive automated "calls" (interpreted here to include SMS messages). According to the 9th Circuit's ruling:

[W]e hold that it is reasonable to interpret “call” under the TCPA to include both voice calls and text messages.

The 9th Circuit reversed summary judgment for Simon & Schuster and remanded to the lower court for further adjudication. The potential consequences, according to the Mobile Advocacy Coalition are as follows:

The US Court of Appeals for the Ninth Circuit ruled against Simon & Schuster, and in doing so, has twisted the meaning of the Telephone Consumer Protection Act of 1991 in a way that imperils the entire mobile marketing industry.

The court has ruled that any computer that sends texts is considered an auto dialer, which puts any mobile marketing campaign on the wrong side of the law.

If the coalition's view is correct, a heavy burden might be placed on SMS marketers to obtain explicit consent to marketing messages before they're sent. Given consumers' abstract aversion to much of mobile marketing, the danger here is almost self-evident. 

Mobile marketing is also confronted by a more expansive, pending complaint before the US FTC about a range of issues surrounding mobile marketing and advertising brought by the Center for Digital Democracy and the U.S. Public Interest Research Group (USPIRG) as an extension of their 2006 complaint regarding behavioral targeting online. The complaint is far reaching and touches practically every element of mobile advertising and marketing on consumer privacy grounds. 

These are significant legal threats to mobile marketing and advertising. However, it is unlikely that Congress and regulators will allow litigation or regulation to kill mobile advertising. But there may be more stringent rules that emerge around consent that could add considerable friction to the process and dampen ad revenues accordingly. 

More on this to come. 

Google Doing Display Ads for Mobile App

Perhaps they were there before and I just didn't notice. But yesterday I saw two ads for Google's iPhone app, one on a blog online and another in the new Fluent Mobile news app. The latter was on the AdMob network. Below is what the online version of the ad looked like. Why is Google advertising its mobile app, which has been in the top 20 in the iTunes store for many months?

Despite the public confidence of Google and others who see little future distinction between the Internet and the mobile Internet (and user behavior accordingly), I think it's not a foregone conclusion that everyone will be using search in the same way on mobile devices that they do on PCs today. Mobile is a different animal and the mobile market is quite fluid and evolving rapidly. 

I find myself using Google's voice search on my Android (HTC Magic) phone quite a bit -- especially voice search in Google Maps -- and like it. But on my iPod Touch (on a WiFi connection) I use apps and bookmarks far more than I use traditional search. However I don't have access to the iPhone's voice search capability on that device. If I did, my behavior might be different. 

On Android devices search is on the home screen and, given that, it's a bigger part of the Android experience than on the iPhone, notwithstanding the recent addition of spotlight. If we do get the promised 18 Android devices and they sell well, we may see search become a prominent navigational tool in the way it is on the PC. However, if apps become the dominant way that people access sites and content on smartphones, where most of the mobile Internet "action" is taking place, conventional search may become a "secondary" tool. 

Then there are now obscure "search" tools that may gain mainstream adoption down the line, such as the camera as doorway to "augmented reality" or as a barcode scanner. And a range of others are working on mobile searching without search: offering up data and content based on location or context without entry of a formal search query. There are a range of iPhone apps that do this using a browse approach (business category X "nearby"). Geodelic is pursuing this model as the back end for T-Mobile's new "Sherpa" app. 

None of this means that paid "search" ads or Google won't be successful in mobile. It means that user behavior and the market may evolve in ways that are distinct from PC-based Internet activity. But we'll see won't we.  

US Texting Champ Sends 470 Messages Daily

The winner of the LG US National Texting Championships is 14 year old Kate Moore from Des Moines Iowa. She sends about 14,000 SMS messages per month and up to 470 per day. (I hope she has an unlimited messaging plan.) She won a $50K prize in a head to head competition for speed and accuracy after multiple elimination rounds. 

US teens and young adults text more than they talk on their mobile phones. According to Nielsen (data Q2 '08): 

Americans 13 to 17 years of age sent or received an average of 1,742 text messages a month in Q2 per Nielsen. SMS penetration is 53 percent, or 137.8 million mobile subscribers in the US.

Many people regard SMS as a kind of mobile social network. At first blush that's strange but it makes sense if you reflect.

The following are LMS/Opus online consumer survey data from early 2008. Mobile access to social networks has grown since that time. But the chart illustrates the way that some people regard SMS as a kind of substitute for social networks on mobile devices:

Source: LMS/Opus (3/08), users who do not access social networks on mobile devices (n=730). Total survey sample 1,022. 

Longer term, it's possible that mobile IM and communication via social networks over mobile devices could cut into SMS volumes.