Short message mania snares new demographic

Just when short message codes appeared destined to be the exclusive province of the cellular industry's youngest customers, along came the hit television show “Deal or No Deal.” On screen, contestants try to guess the dollar values hidden inside Halliburton cases held by svelte models and to maximize the amount of cash they win by playing the odds. Meanwhile, viewers have the opportunity (for 99¢ a call) to play a simpler game of chance by entering short codes using their cellular provider's text messaging service. Participants guessing the correct number are entered into a $10,000 sweepstakes, with the grand prize winner announced at the end of the show.

“One thing that excites us about ‘Deal or No Deal’ is that it penetrates a different demographic,” said David Oberholzer, associate director of content programming for Verizon Wireless. “They're older and less urban.” Verizon is one of several wireless carriers supporting the offering — and in the process, garnering both airtime charges and a piece of the revenues. Although industry stakeholders decline to reveal response rates, everyone seems to agree that they're substantial.

“'Deal or No Deal' caught everyone by surprise,” said Laura Marriott, executive director for the Mobile Marketing Association. Although most consumers who use short message codes for purchases and promotions are between the ages of 13 and 34, “Deal or No Deal” and similar shows are helping to change that. “They're driving a lot of consumer adoption around premium short codes and doing a lot to educate the consumer on the opportunities available,” Marriott said.

The widening of the audience for short message code promotions is one factor helping to drive exponential growth in the market. As of mid-2006, cellular customers were sending 10.2 billion text messages per month — up from 7 billion a year earlier, Marriott said. That includes peer-to-peer, or traditional friend-to-friend text messaging, which Marriott believes is growing at a slower rate than promotional applications.

Some are predicting even stronger growth for 2007. “Business is really booming,” Oberholzer said. “We expect to double our business year on year.”

As of October, research firm M:Metrics found that just 2.4% of mobile phone users had responded to a short message code ad, with a third of that group having actually purchased a product. As such offerings become more mainstream, that leaves plenty of room for future growth.

“We've done very well with a relatively small subset of users,” said Chris Black, director of mobile marketing and interactive media for Cingular. “If we can increase the amount of customers using these services, we should be in great shape moving forward. There's a lot of room to grow. As time goes on, more and more people over the age of 35 are starting to discover this. What's made them come out of the woodwork are things like premium television voting. That has taught them how to text. Later on, they may be more apt to go onto the carrier deck and grab a ringtone or grab some niche content from outside.”