Subject: [NEXTEL-1] New Ad Frontier: Cell Phones - Marketers Bet Consumers Will Ask for Text Messages

From: [email-masked]
Date: Mon, 10 Nov 2003 13:37:43 -0500

New Ad Frontier: Cell Phones
Marketers Bet Consumers Will Ask for Text Messages

By Yuki Noguchi
Washington Post Staff Writer
Saturday, November 8, 2003; Page A01

They're not supposed to call or send a fax to your home. E-mail may soon
be off limits, too. So,
spurned marketers are now training their sights on cell phones.

But they won't call you. They're betting you'll call them to participate
in sweepstakes, get coupons
or answer surveys. They've struck a deal with the nation's 12 largest
providers of wireless phone
service to set up a five-digit call-in system. Consumers dial a "short
code" promoted by the
company on its products and advertisements to get the company to send
them back a text message
that appears on their cell-phone screens.

More than 150 companies have applied to register short codes -- numbers
from 20000 to 99999
-- in the two weeks they've been available.

Consumer advocates fear that once a customer uses a code to snag a
coupon, that cell-phone
number could go on a list and be sold to telemarketers, making the cell
phone just another target for
junk solicitations.

There are no "white pages" with cell-phone numbers, so they have
remained relatively free of
come-ons. Because most users pay extra to send and receive text
messages, unwanted promotions
could be not only annoying, but also costly.

Many of the companies that have registered for short codes so far have
pledged not to share cell
phone numbers with others or use them to market products unrelated to
the original promotion.

Procter & Gamble Co. is using 3-2-7-3-2 -- DARE2 -- to promote its
Clairol Herbal Essences
hair-color products. The Weather Channel has registered to secure 4CAST,
STORM and RADAR
for on-demand weather updates. Coca-Cola Co. already is inviting people
to call COKE for a shot at winning prizes. (It set up
its four-digit code before the five-digit standard was established.)

Marketers don't plan on having people return messages. The marketers
will just send text, which they can do for much less
money. Also, they say, text is less intrusive.

Coca-Cola last month launched a trial by printing its 2-6-5-3 short code
on posters and cardboard displays at stores to
promote its sweepstakes. Customers punch the code into their cell phones
and are then prompted to type in the numbers
printed on the inside of their drink caps, which indicates the number of
points they've earned.

Coke keeps track of a user's points in a digital account associated with
that cell-phone number. The customer then uses the
cell-phone number to register on Coke's promotional Web site and redeem
points for prizes.

Coke wanted to tap the growing audience of teenagers who use cell phones
to send text messages, said Doug Rollins,
associate brand manager of the Coca-Cola trademark. If the trial
succeeds, he said, Coke might use the codes more broadly in
other advertising and promotional programs.

Coke asks those who register on its Web site for permission to send
additional messages to their cell phones. But it is treading
carefully on what it knows is now private space. Coke has pledged not to
sell its list to other marketers, or to send unwanted
messages. "We're not going to push a bunch of messages," Rollins said.
"Consumers are paying for each text message we send.
We can't lose that confidence."

Other marketers agree and say the messages will be sent only to people
who request them. But they think they will be a
bonanza. The business of marketing to cell phones could be worth $5
billion in two years, said Peter C. Fuller, president of the
Mobile Marketing Association.

"The biggest thing is the personal nature of a wireless telephone --
it's always on. It's always present," said Mark Grindeland,
executive vice president and co-founder of m-Qube Inc., a software
company that has contracts with the National Football
League, America Online Inc., Procter & Gamble and 17 other firms to set
up cell-phone marketing programs.

More than half of Americans own cell phones. Two-thirds of the 150
million phones in circulation in the United States are
equipped to receive text messages and many display images and video
clips. In the United States, text messaging is most
popular for receiving sports scores, stock prices and weather reports.
It has caught on with teenagers, who use it to
communicate with their friends.

Short codes are already widely used in Europe and Asia, where they are
used not only for marketing products, but also for
polling, paying for parking or even hailing a taxicab, said Kenneth M.
Hansen, director of business development for Neustar
Inc., the Sterling-based company that is administering codes for U.S.
wireless carriers.

But in Asia, the popular marketing practice has been criticized because
messages are often sent to cell phones without
permission.

U.S. consumer groups worry that the same will happen here.

"It's the worst of telemarketing and spam rolled into one," said Adam
Goldberg, a policy analyst with Consumers Union.
Marketers didn't police themselves with telemarketing calls to the home
or with e-mails, so it's unlikely they'll control their
behavior with text messaging, he said.

There are no federal rules prohibiting advertising to wireless devices,
although the Federal Communications Commission bans
marketers from using automatic dialing to call cell phones. California
prohibits marketers from sending unsolicited messages to
cell phones.

"Our concern is that consumers are not going to be aware of the price
that they're paying and that this could lead to a massive
increase in unwanted text messages coming to the cell phone day after
day," Goldberg said.

Advocates of short codes say marketers and wireless carriers will
self-police the process, sending messages only to consumers
who "opt in." Marketers are expected to allow customers to accept or
refuse a message. Also, short-code proponents promise
they will make it easy for cell-phone users to opt out of getting new
messages.

The Mobile Marketing Association plans this month to release a "code of
conduct" for marketers to protect consumer privacy,
Fuller said.

As proof that customers will pay for information on some products and
services, the cellular industry points to the successful
AT&T Wireless-sponsored voting in the "American Idol" contest this year.

That program inspired 7.5 million cell-phone users to vote on
contestants on the popular Fox television show.

During the program, AT&T Wireless users voted by dialing 4-3-6-5-7, or
IDOLS, followed by a number corresponding to
their favorite contestant. Voters received a reply confirming their
vote, and some respondents were sent coupons for a discount
on a CD featuring "American Idol" winner Kelly Clarkson. About 17
percent of those recipients redeemed the coupons.

"People enjoyed interactive TV. It's a mechanism to do that," said John
Windolph, senior vice president for business
development for the Cellular Telecommunications & Internet Association.

Windolph said the federal government's do-not-call registry, which lets
people opt out of receiving telemarketing calls, "has no
relevance" to cell-phone short codes because people must first dial in
to receive messages.

The codes are also a potential boon for cell-phone service providers who
are looking for a boost in traffic from increased
messaging. Americans send about 1.5 billion text messages a month -- up
from 930 million monthly messages last year -- which
generates about $300 million a year for the cellular phone industry, he
said.

The cost of text messages differs depending on plans, but is roughly 10
cents a message. Marketers are working with wireless
carriers to develop different types of payments, so that they could
charge more -- 50 cents to several dollars to receive games,
for example, said Robert Poulin, senior vice president of marketing for
Neustar.

Jeremy Pemble, a spokesman for AT&T Wireless, said the company's
marketing campaign for "American Idol" introduced
hundreds of thousands of customers to wireless messaging, and many
continued to use text messages afterward.

"It was a major consumer catalyst," Pemble said. "Now, our phones are
ringing off the hook from packaged-goods companies
and television-show producers who want to use this to reach a broader
audience."

Some analysts question whether using text messaging is a sound strategy,
given today's super-saturated advertising
environment.

"I think people are not going to be very receptive to it," said Roger
Entner, an analyst with the Yankee Group, a
marketing-research firm. "How many people will voluntarily be exposed to
advertising? Not much, in my opinion. It's a very
personal, very private medium of communication. People will get very
hostile about it."

http://www.washingtonpost.com/wp-dyn/articles/A14101-2003Nov7.html

http://www.usshortcodes.com/

http://groups.yahoo.com/group/PrivateWirelessForum/message/8549

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