An Insight into the United States Mobile Marketing & Short Code SMS Markets

SUMMARY

Improved Coordination between Participants Key to Enhanced Consumer Interaction

Overcoming initial difficulties such as unclear objectives and untested technologies, mobile marketing campaigns have emerged as a preferred choice for leading brands. In comparison to traditional media, short message service (SMS)-based media interactivity campaigns have exhibited a higher rate of success. Technical innovations and a rising return on investment (ROI) are providing mobile marketing campaigns an extra edge. However, participants need to work toward better coordination between mobile operators, application developers, and brands, as mismanaged relationships are a long-standing bottleneck. This will boost customer interactivity and ensure maximum brand awareness.

This Frost & Sullivan analysis of the mobile marketing and short code SMS markets in the United States provides information on mobile marketing campaigns based on push/pull, voice, SMS, multimedia messaging service (MMS), wireless applied protocol (WAP), and Java and binary run-time environment for wireless (BREW). The study offers industry and application trends and market drivers and restraints, as well as strategic market forecasts. Profiles of the key industry participants and description of important mobile marketing campaigns by leading mobile operators have been also been included.

Mobile Marketing Campaigns Lucrative for Mobile Operators and Participating Brands

The strong impact and wide reach of a mobile campaign also benefit brand advertisers. Besides remarkable success, increasing penetration of SMS and greater promotion of short codes are influencing mobile subscribers view of text messaging as a successful medium. For instance, the American Idol campaign introduced by AT&T Wireless in association with Mobliss Corporation, FreemantleMedia, and 19 Entertainment had more than 40 percent of respondents sending SMS for the first time.

Having gained such a strong foothold, mobile marketing is a lucrative option for mobile operators. "Revenues from short code SMS-based mobile marketing campaigns are expected to rise as more brands enter the arena and the number of companies extending their portfolios to include short code SMS campaign management increases," says the analyst of this research.

Highly Targeted Nature of Permission-based Mobile Marketing Campaigns Promotes Adoption by Marketers

The high dependency of mass communication on interactivity makes permission-based mobile marketing a logical choice for advertisers besides opening new streams of revenue for mobile operators. These campaigns are direct, interactive, and ubiquitous, as mobile handheld devices are increasingly proving to be extremely effective instruments in terms of immediacy in response and interactivity.

"The combination of profile information, location-based technology, time, and other demographic data allows mobile marketing campaigns to target specific customer segments at a level, which other traditional interactive marketing media such as e-mails or direct mailings cannot," says the analyst.

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Technologies

The following technologies are covered in this research:

• Mobile Marketing: This can be defined as the use of the mobile medium as a communication and entertainment channel between the brand and the end user. All the processes involved in conceptualizing, planning, pricing, promotion, and distribution of products and services come under mobile marketing. It is important to note that selling is not the only aim of mobile marketing. It works best when used as a supplementary tool to involve mobile subscribers in interactive campaigns built around brands. In this regard, it is important to understand clearly the difference between mobile marketing and mobile advertising.
• Mobile Advertising: This can be defined as the actual process of describing or presenting a product, idea, or an organization through mobile communication channels in order to induce mobile subscribers to buy, interact with, or support it.
• SMS: Short messaging service (SMS) has emerged as the most popular way to conduct interactive mobile marketing campaigns. There are 40 million active SMS subscribers in the United States, and mobile operators in the country are finally taking initiatives toward promoting the SMS service. Cross-carrier interoperability, which was a major deterrent to SMS uptake has been achieved to a greater extent. Moreover, popular text messaging-based mobile marketing campaigns such as AT&T Wireless American Idol, Verizon Wireless Lord of the Rings, and Cingular Wireless Survivor have boosted the popularity of SMS in the United States.
• MMS: Multimedia messaging service (MMS) allows a combination of graphics, text, animations, and others to be delivered in a single message for the creation of a multimedia experience. Sending and receiving MMS requires MMS-enabled handsets, the penetration of which is still not very high in the United States. MMS also requires advanced networks with high bandwidth for desirable end-user experience. Brands and content owners are still not sure how their messages will look on the phone screen, and this is also slowing down the development of MMS-based marketing campaigns.
• Wireless Applied Protocol: WAP and SMS phones are the prevalent personal devices, and mobile advertising based on these two mobile applications allows mobile marketers to leverage these devices for better communication. WAP-based advertising generally uses interstitials or graphics for contextual advertising. Interstitials are WAP pages displayed for a short duration between pages of content while graphics are a clickable logo or an image with a link underneath.
• JAVA and Binary Run-time Environment for Wireless (BREW)-based Marketing: Both, Java and BREW provide access to wireless Internet applications. The subscriber accesses different entertainment, informational, and transactional services on mobile operator portals built around either Java or BREW. Interstitials and graphics with embedded text link have proven to be effective here.

Market Sectors

Every Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

• Mobile Marketing: These campaigns can be classified as push-based or pull-based ones. Push-based campaigns send marketing information to the mobile subscriber at a time other than when the customer has requested for it while pull-based mobile marketing involves sending content to the subscriber on a one-time basis after the subscriber has specifically requested for the information.
• Voice-based Mobile Marketing: This may involve directly calling up the subscriber to inform about new offerings or provisioning of voice-enabled sites called vortals, which are designed to be navigated by voice commands.
• SMS-based Mobile Marketing: These campaigns focus on consumer interactivity through SMS. Different types of campaigns such as sweepstakes, quizzing, polling and voting, and mobile couponing use SMS. Besides, short code SMS has emerged as the major mobile marketing channel.
• MMS-based Mobile Marketing: MMS-based mobile marketing allows information to be presented in a more graphic manner to the mobile subscriber. These campaigns require the mobile subscribers to possess an MMS capable handset.
• WAP-based Mobile Marketing: This type of campaign uses interstitials or graphics for display of marketing message during browsing of a WAP enabled portal.
• Java and BREW-based Mobile Marketing: These campaigns also involve presenting interstitials and graphics to a mobile subscriber accessing the mobile operators portal built around Java or BREW.

Benefits of this Service

• The study provides an analysis of mobile marketing in the United States. It also identifies the industry trends and attempts to understand the key issues for different participants in the mobile marketing value chain.
• The study identifies where the opportunities are in this market, and also describes the network technologies used in popular mobile marketing applications in the United States.
• This research service identifies drivers, restraints, and trends in applications, and presents market forecasts for short code SMS based mobile marketing campaigns.
• Detailed profiles of the key industry participants and description of important mobile marketing campaigns on leading mobile operators in the United States have also been included

TABLE OF CONTENTS

1 MARKET DEFINITIONS

• Mobile Marketing and Interactive Mobile Marketing
  • Introduction to Mobile Marketing
  • Definitions
  • Mobile Marketing Campaign Delivery Methods
  • Interactive Event Marketing
• Short Code SMS
  • Introduction to Short Code SMS
  • Definitions
• Relation Between Mobile Marketing and Short Code SMS
  • Relationships
• Summary of Findings & Key Conclusions
  • Findings & Conclusions

2 MARKET SEGMENTATION

• Mobile Marketing
  • Classification and Popularity
• Short Code SMS
  • Classification and Popularity

3 TECHNOLOGY OVERVIEW

• Short Code SMS
  • Key Network Technologies
• WAP Push
  • Protocols and Gateways
• Mobile Marketing & High Speed Networks
  • High Speed Mobile Networks

4 MARKET DYNAMICS

• Drivers & Restraints
  • Drivers
  • Restraints

5 STRATEGIC EVALUATION & ANALYSIS

• Short Code SMS Value Chain
  • Important Participants
• Mobile Marketing Business Models
  • Common Short Code SMS Campaigns
• Mobile Marketing Revenue Models
  • Common Short Code SMS Campaigns
• Market Strategies for Industry Players
  • Code of Conduct
  • Market Strategies

6 MARKET OPPORTUNITY

• Revenues & Subscribers of Short Code SMS Campaigns
  • Revenues from Short Code SMS Campaigns
  • Subscribers Participating in Short Code SMS Campaigns

7 2004 FROST & SULLIVAN AWARDS

• 2004 Integrated Mobile Marketing Company Award
  • Integrated Mobile Marketing Company Award
• 2004 Mobile Marketing Product Suite Award
  • Mobile Marketing Product Suite Award

8 KEY INDUSTRY PARTICIPANTS & IMPORTANT MOBILE MARKETING CAMPAIGNS

• Key Industry Participants
  • Mobliss Inc.
  • m-Qube Inc.
  • Enpocket Inc.
  • Air2Web Inc.
  • eWingz Systems Inc.
  • Versaly Entertainment
• Important Mobile Marketing Campaigns of United States Mobile Operators
  • Verizon Wireless
  • Cingular Wireless
  • AT&T Wireless
  • Sprint PCS
  • T-Mobile USA
  • Nextel Communications

List of Figures

Chapter 1

• U.S. Mobile Marketing & Short Code SMS Markets: Voice, SMS & MMS as Mobile Marketing Delivery Methods (U.S.), 2004
• U.S. Mobile Marketing & Short Code SMS Markets: WAP, BREW & Java as Mobile Marketing Delivery Methods (U.S.), 2004

Chapter 4

• U.S. Mobile Marketing & Short Code SMS Markets: Industry Drivers Ranked by Order of Impact (U.S.), 2002-2007
• U.S. Mobile Marketing & Short Code SMS Markets: Industry Restraints Ranked by Order of Impact (U.S.), 2002-2007

List of Charts

Chapter 1

• U.S. Mobile Marketing and Short Code SMS: Total Mobile Subscribers and Active SMS Subscribers (U.S.), 2002-2007

Chapter 2

• U.S. Mobile Marketing and Short Code SMS: Market Segmentation for Mobile Marketing (U.S.), 2004
• U.S. Mobile Marketing and Short Code SMS: Market Segmentation for Short Code SMS (U.S.), 2004

Chapter 3

• U.S. Mobile Marketing and Short Code SMS: Network Diagram for Short Code SMS (U.S.), 2004
• U.S. Mobile Marketing and Short Code SMS: Network Diagram for WAP Push (U.S), 2004

Chapter 5

• U.S. Mobile Marketing and Short Code SMS: Short Code SMS Value Chain (U.S.), 2004

Chapter 6

• U.S. Mobile Marketing and Short Code SMS: Short Code SMS Revenues and Percentage Share in Total Data Revenues (U.S.), 2002-2007
• U.S. Mobile Marketing and Short Code SMS: Total Mobile Subscribers and Active SMS Subscribers (U.S.), 2002-2007
• U.S. Mobile Marketing and Short Code SMS: Total SMS Subscribers and Short Code SMS Subscribers (U.S.), 2002-2007