RealTime IT News

Study: SMS Marketing to Take Off

Mobile marketing might be a relative non-entity in the U.S., but it's posed to rival the present businesses in Europe and Asia within four years, according to a recent study by Jupiter Research.

The study by Jupiter -- which is owned by INT Media Group , the publisher of this Web site -- found that mobile marketing is hottest in Europe, where an estimated $53 million will be spent on mobile campaigns in 2002.

However, by 2006, wireless marketing in the U.S. will match both Europe and Asia, with the growth driven primarily by campaigns launched by consumer packaged goods producers and fast food restaurants.

Most of these campaigns, moreover, will rely on SMS rather than wireless sponsorships, banner or interstitial ads. That's due largely to efforts at interoperability efforts among U.S. carriers, which began in earnest this spring.

That technical effort has created an environment in which U.S. cell phone users are almost three times more likely to use two-way SMS than wireless Web browsing, and twice as likely to receive one-way SMS messages, according to a survey in April conducted by Jupiter and The NPD Group.

Jupiter analyst Dylan Brooks, who authored the study, added that it is unlikely that SMS growth in the U.S. will cannibalize online ad sales anytime soon.

"Advertising via wireless devices will not significantly cannibalize digital marketing," Brooks wrote. "Mobile marketing is suited best to drive sales of consumer packaged goods, restaurant menu items and high-street retail commodities -- sectors that have advertised very little online to date."

Nevertheless, with groups like the Interactive Advertising Bureau pushing for more advertisers to buy into online media, it's still unclear whether the two relatively new media will compete for advertising dollars later in the decade.

Other pitfalls, however, require more immediate attention before U.S. wireless marketing takes hold. Unlike in the Europe and Asia, wireless carriers and advertising agencies will be forced to cooperate to roll-out mobile campaigns: agencies will provide technical and creative skills, while carriers will seek to preserve user privacy and don't want to be left out of controlling content, Brooks wrote.

In Europe, carriers have little involvement in deploying wireless campaigns, with agencies like 12snap, flytxt and Mindmatics instead serving as the prime movers. In Asia, the situation is reversed, with carriers like NTT DoCoMo playing much a greater hands-on role in creating campaigns.