More and more food companies are harnessing text messaging, or SMS, as the new marketing medium. As the technology evolves, the marketing possibilities are ever increasing, from text-and-win competitions to downloadable games. Perhaps even more importantly, text messaging provides a way of reaching that all-important youth generation, as Patrick McGuigan finds out.
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People have long been aware of the power of the written word, so the sheer enthusiasm that consumers have shown for text messaging should come as no surprise. Even less startling is the speed at which food companies have harnessed the medium as a marketing tool to boost sales and brand awareness. After all, people who text message tend to be young, with cash to spend, and are likely to become the wealthy middle-aged consumer of tomorrow.
Another attraction of text messaging, also known as Short Message Service (SMS), is that it enables companies to form direct relationships with their customers. Unlike passive marketing channels, such as print or broadcast media, SMS involves a dialogue between customers and companies. This interactive characteristic also enables companies to build up important information about who their customers are and when and why they buy products.
Response rates for SMS marketing campaigns are excellent, ranging from 5-15%. London-based mobile marketing research company Enpocket studied over 200 SMS marketing campaigns across Europe and found that on average 23% of people would show or forward a message to a friend, while the best promotion achieved a response rate of 41% (see chart). In China in 2002, Coca-Cola received four million messages in a 40-day promotion where consumers had to guess the next day’s temperature in Beijing. Winners could receive a Siemens phone or a year’s supply of Coke, while losers had the chance to download a Coke jingle as a ringtone.
Text and win
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By GlobalDataSo there are plenty of good reasons for using SMS marketing, but food companies can choose between a range of different types of campaign. The most commonly used format is the ‘text-and-win’ promotion, which basically entails consumers buying a product that incorporates a special code. The consumer then texts this code to a specified number to find out if they have won. In the UK, Cadbury’s txt ‘n’ win campaign, which was the first large-scale SMS promotion from a food company, followed this formula. The company offered £1m (US$1.7m) worth of prizes in the scheme, although there were criticisms that the prizes were too big and there were not enough chances to win.
At London-based text marketing company Flytxt, which ran the promotion, communications director Annabel Brog agrees that lessons were learned from txt ‘n’ win: “The win ratio wasn’t high enough. It’s important that every consumer is a winner with these types of campaigns, even if it is just a ringtone or logo,” she says.
According to Brog, the latest generation of text-and-win campaigns involves redeemable coupons sent to your phone. Consumers text a number seen on TV or in print media and in return receive a barcode. This can be swiped at participating shops or bars to get a free product. Flytxt has recently installed some 500 swiping units in retail outlets across the UK for a new promotion in January. “I can’t say who the campaign is for, but the retailers are footing the bill for the units because they can use them in years to come with other promotions,” says Brog. “Mobile couponing completes the marketing loop. Consumer awareness is raised and they are driven to the point of sale.” Other popular text marketing approaches involve voting, as seen in the Mars’s Global Colour Vote to choose a new M&Ms’ colour, and collecting points over time to redeem for prizes.
Technological developments increase marketing opportunities
Future developments in text marketing centre around new handset technology. According to Brog at Flytxt, ‘second generation’ multimedia phones represent the immediate future. “You can do so much with MMS (multimedia message service). You can have enhanced colour visuals, audio files and unlimited text space,” she says. “In the UK, current penetration of these phones is about 15%, but we expect this to rise to 40% after Christmas sales have been accounted for.” Meanwhile, third generation (3G) phones, which can support video streaming, represent the long-term future. “There just aren’t enough handsets on the market yet – only about 300,000 in the UK. But it will happen over the next five to ten years,” she says.
As handset technology matures, mobile phone gaming is also likely to become an important weapon in the mobile marketer’s armoury. Apart from making excellent downloadable prizes, branded games build on the interactive nature of mobile marketing. Consumers could play games against each other or against the company. Food companies could set up gaming clubs, which consumers would choose to join.
Indeed, text clubs, where consumers opt to receive useful information and promotional offers on a regular basis, could develop the relationship between companies and customers further. For example, food companies could launch a food club, linked to a celebrity chef, where consumers receive weekly recipe ideas, tips and money-off vouchers. Brog says that the colourful new multimedia phones would be a perfect medium for this.
Film tie-ins and ready-made databases
Similar clubs already exist at teen magazines, where readers sign up to receive regular information and offers from the publisher. Food companies often work in conjunction with these magazines, using the publication’s databases to offer members competitions and free samples. As well as targeting a very specific, well-defined section of society, using a third party’s database also adds legitimacy to the food company’s message. Heinz, for example, recently launched a new frozen snack range called Bite Me, which is aimed at teenagers, and will use MTV’s databases for the SMS push. “This target age group are savvy new media users, therefore it was vital to incorporate this form of media to maintain relevant and interesting communication which involves the consumer,” said a spokeswoman.
Tie-ins with films are another popular way to build a successful mobile marketing campaign, as Arnott’s Snackfoods in Australia proved last year. The company ran a hugely successful text-and-instant-win campaign in conjunction with the Austin Powers Goldmember film across several snack brands. Over ten million SMS messages were received – Arnott’s had previously set five million as its target. “We have exceeded our expectations, showing that SMS really works,” says marketing director David Cross. “SMS is what young people are into and we’re all about reaching this group in a fun and innovative way. SMS also allows us an unrivalled level of campaign reporting and generates a much higher response rate.”
Worldwide potential
While Australia, Europe and particularly the Far East have embraced text-messaging technology, the US market lags behind. Back at mobile marketing company Enpocket, which has just set up operations in the US, co-founder Jeremy Wright says the market for text messaging in the US is about 18 months behind Europe’s, and possibly even further behind the UK’s. “Until recently, both senders and receivers were charged for text messages and there was no cross-network texting,” he says. “But these issues have now been sorted out and texting is mushrooming as it did in Europe.” Enpocket says that there are 151 million mobile phone subscribers in the US and over 30 million actively using SMS. In the 18-24 age group, 45% use the medium.
“In Europe, peer-to-peer texting drove the market because it was initially free or very cheap. The network operators undervalued SMS, but this also helped the market grow exponentially,” says Wright. But in the US, market conditions are different. SMS is being driven by the phone networks and multinational brands that have had text success in other parts of the world and want to replicate it in the US. Enpocket is so convinced by the potential of the US market that it has launched its SMS Insight research service over there, and has recently handled a large Levi’s jeans text campaign. Enpocket’s CEO Jonathon Linner adds: “The US will quickly catch up with and surpass in size any other market, with the possible exception of Japan.”
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Source: Enpocket analysis of 200 text marketing campaigns across Europe |
