SMS Advertising - A New Media Mix Tool

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Case Details:

Case Code : MKTG043
Case Length : 9 Pages
Period : 2000 - 2002
Pub Date : 2003
Teaching Note : Not Available
Organization : Varied
Industry : Cellular Telephony
Countries :

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"It is very interactive, and very simple to participate. It is growing, and there has been a lot of interest from marketers in adding to their marketing mix, enhancing their branding and realizing the other benefits of SMS."

- Eva Chun, Marketing Manager, EdgeMatrix (an Australian Mobile Content Provision enabler), in March 2001.

SMS - A New Concept

By the early 21^st century, the cellular telephony revolution had radically transformed the global telecommunications industry. Cellular phones offered a whole new experience to people desirous of keeping in touch with their close ones anytime, anywhere. Cell phones (or mobile phones) became more popular, largely due to the emergence of the Short Messaging Service (SMS). The popularity of SMS took even industry experts by surprise, as the service had always been looked down upon as a 'low-end' option offered by a cell phone. As per the findings of a study conducted about the usage of SMS across 14 countries, over 80% of cell phone users in countries such as Finland, the UK and many European countries used SMS at least once a month.

In Sweden, Singapore, Italy and Germany, around 75% of the people used SMS at least once a month. SMS was most popular in the 'under 25 years' age group. Text messages sent across the world reached an astounding 62.45 billion per month by December 2002 (Refer Table I for SMS growth statistics).

According to the estimates of Strand Consult¹, the global market for SMS doubled from $ US 7.5 billion in July 2000 to $ US 15 billion by December 2001, and was still growing at a scorching pace.

The firm expected the revenues from SMS advertising to exceed those from Internet advertising in the near future.

Considering this huge pool of mobile-savvy customers, marketers could not ignore the potential that advertisements directed towards SMS senders had. Thus, was born the concept of SMS advertising - something that was to influence the media mix plans of many companies in the years to come.

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1] A consultancy based in Copenhagen, with regional offices in Oslo, Stockholm and London.