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For More Advertisers,
The Medium Is the Text Message

By CYNTHIA H. CHO
Staff Reporter of THE WALL STREET JOURNAL
August 2, 2004; Page B1

You've just left your office and you're looking for a place to relax and have a drink. Do you want your cellphone to suggest a nearby watering hole?

If you'd signed up with a social-networking service to keep up with friends and make new ones, the message might be welcome -- and you might even be inclined to order an Absolut vodka when you're there.

At least, that's what Absolut hopes. Last month, the maker of the Swedish spirit entered a marketing partnership with Ubiquity Labs LLC's Dodgeball.com, a mobile social-networking company based in New York, whereby Absolut sponsors text messages in which Dodgeball recommends venues for socializing.

"The reality is that we have to look for a variety of ways to reach our consumers," says Lorne Fisher, a spokesman for Absolut, a unit of Sweden's V&S Vin & Sprit AB. Social networking "is a new way for consumers to communicate with each other, and these consumers, who are of legal drinking age and are socializing, are a target for us."

But while there are more than 160 million cellphone users in the U.S., would-be advertisers face a potential stumbling block: Only a tiny percentage of cellphone users are receptive to such "mobile marketing."

The Yankee Group, a communications-consulting firm in Boston, this year surveyed 5,510 U.S. cellphone users over age 18 and found that only 20% had received a text ad via cellphone. Of that group, 9% said the ad bothered them, while another 9% said they "just deleted it." Only 2% said they had received an ad that was "relevant for me."

[After receiving this message, the cellphone user might order a vodka martini made with Absolut.]
After receiving this message, the cellphone user might order a vodka martini made with Absolut -- or so the marketers hope.

In an effort to boost the "relevant for me" statistic -- and fight off fears that cellphones will join computers in being choked with the unwanted missives called spam -- mobile marketers are emphasizing an "opt-in" policy for text-message ads: Unless users specifically express willingness to receive such messages, they won't get them. While it's possible for a company to ignore the policy, mobile marketers are confident that a code of conduct formulated by the Mobile Marketing Association, along with the wireless provisions of the federal CAN-SPAM law, will mean few people are pestered by junk messages on their phones.

Getting cellphone users to opt in might seem a daunting challenge, but it can be done -- and can pay off. In January, cable television's History Channel worked with Enpocket Inc., a provider of mobile-marketing technology and creative services in New York, to send 100,000 text messages promoting its special "Barbarians" the day it aired. Each message recipient had told providers of mobile content, such as ring tones and games, that they would be willing to receive marketing information on their cellphones.

"We know that these shows cater, and are built to cater, to a younger male audience," says Michael Mohamad, senior vice president of marketing for the History Channel, which is owned by Walt Disney Co., Hearst Corp. and General Electric Co. "We also know that younger audience tends to be electronically adept. So the idea of hitting that audience with a medium you know they're using is a good one."

Indeed: Three days after the program aired, an Enpocket survey of 200 of the people who received the text message found that 88% read the message, 40% watched the History Channel in general after receiving the message, 18% watched "Barbarians" and 12% forwarded the message to a friend, Mr. Lawson says. The channel teamed up with Enpocket again to promote, via text messaging, two new shows -- "Decisive Battles" and "Command Decisions" -- that were launched last month.

Text messages on cellphones are sent through a technical standard called Short Message Service and are limited to 160 characters. While marketers using text messaging for campaigns include the likes of Anheuser-Busch Cos., the medium is still in its infancy in the U.S., where annual spending on mobile marketing is now under $1 billion. The Mobile Marketing Association, a Mountain View, Calif., trade group, projects spending of $5 billion by the end of next year.

As with most things cellphone-related, countries in Europe and Asia are much further along in the use of text-message advertising. Those who believe the U.S. will catch up note that American cellphone users already have proved willing to use their phones in sweepstakes and contests, from the text-message voting in the "American Idol" talent competition on News Corp.'s Fox to text-messaging-based trivia games run by Kellogg Co. and McDonald's Corp. Social-networking services such as Dodgeball hope to lead phone users in a new direction.

Dodgeball, which is available in 15 large U.S. cities, helps people meet up for nights on the town. A user sends Dodgeball a text message with his or her location, and Dodgeball sends that location information to the user's selected set of friends; it also lets the user know if any friends -- or friends of those friends -- are within 10 blocks.

The company's deal with Absolut shows how mobile marketers are trying to ensure that even people who opt to receive text-message ads aren't overwhelmed by them. Dodgeball users who choose to receive Absolut-sponsored venue recommendations based on their location will get them just three times a week -- at 6 p.m. Tuesdays and Fridays and midnight Saturdays.

Still, some Dodgeball users aren't keen on receiving marketer-sponsored information. "I like Dodgeball because it's friends and friends of friends, whose opinions I value, telling me what's hip and cool," says Molly Garris, a 24-year-old entertainment-marketing manager in New York, who has been a Dodgeball user since April. "I value their opinions more than [those of] advertisers."

Mobile marketers need to note that even opting in isn't a panacea, says David Hallerman, a senior analyst at eMarketer, a research firm in New York. "One of the problems with opt-in in the e-mail world is that people opt in for this and that and then forget about it -- so an e-mail that they opted in to receive can feel like spam," he says.

Jim Nail, an analyst at Forrester Research in Cambridge, Mass., is skeptical that mobile marketing will catch on as swiftly as its enthusiasts believe. "From the time that people first used the Internet, it took them three or four years to change their behavior and to start taking advantage of Internet offers," he says.

But for marketers, Mr. Nail thinks it could be worth the wait. People who opt to receive commercial text messages "are going to be very highly motivated and interested in whatever the advertiser is offering," he says. "If those people are also the key influencers in their social circles, then the impact could be big."

Write to Cynthia H. Cho at cynthia.cho@wsj.com

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