Since the introduction of SMS two years ago, the GSM Association estimates that the number of messages sent worldwide has increased from 1 billion per month to an average of more than 23 billion per month (as of September 2001). The association predicts that by the end of 2001, 200 billion messages will have been sent globally.

Although, few studies have been conducted on the current use of SMS in traditional sectors as a marketing platform specifically, Laszlo pointed out that the next stage of development for commercial messages will entail requests from the consumer for specific information. Key areas where such services are taking off include financial services (firms can provide information services to manage portfolios) and travel (airlines will provide flight information).

However, Kaiser noted that providers such as Cingular are “still trying to determine what the wireless standards are in the US for advertising. The carriers in the US are still at the front end of how to set up relationships in terms of giving outside [companies] connectivity to customers.” Jill Meidbury, Senior Manager for Corporate Communications at Deutsche Telekom noted that there is currently only 40% penetration in the US for mobile services. The use of mobile services as a whole is more imbedded in the European and Asia-Pacific lifestyles. According to Watt, there is only one voice call for every ten to fifteen SMS messages in the Asia-Pacific region.

The untapped potential for mobile marketing in the US is due in large part to technology, pricing and penetration of communications.

Experts across the board agree that technology is the main hindrance to development of mobile messaging in the US. While Europe's market is standardized on the GSM network, the US suffers from a mixture of standards and hence lacks interoperability.

As for pricing, wireline and wireless services in the US and European markets have different pricing models. As Kaiser explains, landline services in Europe are paid on a per usage basis versus a flat rate in the US. Voice is therefore relatively more expensive in Europe making SMS a more competitive means for communication.

As for penetration of communications platforms, Kasier pointed out that the European market does not have traditional paging companies or the level of PC and online penetration as the US, therefore allowing SMS to take off more quickly. Users in the US are very loyal to their PCs, and hence are spoiled by the availability of a large screen and full keyboard, neither of which a mobile phone or PDA can offer. What’s more, users in the US on average still view the mobile phone simply as a voice device, rather than an "integrative device."

Although Europe is way ahead of the US in the implementation and usage of wireless services as a whole, Jupiter Media Metrix reported that advertisers in Europe will spend under 0.7 percent of overall ad spending (less than 680M euros/US$ 615M) on wireless marketing in 2006. That said, the majority of the 60 million euros (US$ 53M) spent on wireless marketing in Europe in 2001 will go to direct marketing via SMS.

SMS, or mobile messaging as a whole, is still in its infant stage and many experts are unclear about its potential. Kim Thompson, spokesperson for Voicestream, notes that the use of SMS will expand through the introduction of IM (AOL already has over 100 million IM users who are familiar with the concept), and no doubt there are more messaging possibilities in the works.

Until the industry becomes more standardized, and technologies are both adapted and adopted for use, advertisers need to consider how their brands translate within the current limitations. In the meantime, users should work on their emoticons and search out dictionaries for mobile shorthand.    

[31-Dec-2001]