What would you prefer: a knock at the door on a Sunday morning or a quiet SMS stating that you have been offered a discount voucher from your favourite shopping place? Inder Verma, 36, a banker, said that every time his cell phone beeps, he presumes it to be a promotional message and mostly never bothers to open the message. But now that he is searching for a home, he finds such messages with "dream house deals" quite useful.
Marketing via SMS is the first choice of small- and medium-sized organisations. But sectors such as banking, insurance, FMCG, real estate and other financial services leverage this medium the most, with the mantra, "Even a message that does not interest the consumer will, at the most, go unanswered but hardly unnoticed."
Point is, do such SMS campaigns get consumer response? "The response rate of an SMS varies from 0.5 to six per cent depending on the type of campaign. Responses will be minimal if the campaign is for financial products but when it is about a promotion with free gifts, the rates jump up to five-six per cent," said Satya, CEO, 160 by 2, a popular bulk SMS site. The Modicare group reports about 25-35 per cent positive response from SMS campaigns.
Given the strong value of this medium and minimal investment involved, a host of companies are using it for offering discounts or offer coupons, contest entries, voting, and announcement or promotion of new products.
Experts believe that given the soaring popularity of smart phones, SMS marketing is ready to graduate to the next level. As cheap handsets find appeal across an expanding base of consumers and 3G services are on the verge of making an entry, marketers expect a resurrection of SMS marketing, but in a far more advanced avatar.
Industry experts believe that the next wave will be unleashed with the adoption of high bandwidth 3G at affordable rates, where marketers will be able to do a lot more with this medium — such as streaming video content, integrating web with mobile, creating digital SMSs and much more. Smart marketers will combine WAP apps (cell phone-based web applications) with SMS to create killer marketing campaigns.
Agreeing to the predicted face-lift, Nirmal Shani, head - sales and marketing, Dun & Bradstreet India, added: "Third party sources estimate that around two million users access the internet through their mobile at least once a month. This definitely signals the entry of killer marketing campaigns." According to Dun & Bradstreet India, the mobile marketing industry — a niche segment — is worth around US $25 million, as of January 2010, and is expected to grow at 15-18 per cent in the next two years.
Satya too was bullish on SMS campaigns using mobile apps, saying: "Among two lakh subscribers with our site, 20 per cent login from WAP. This has motivated us to concentrate on mobile apps (downloaded applications), which are now getting around seven per cent of logins on a daily basis."
Marketers are also experimenting with vernacular voice SMS. Salil Kapoor, COO, Dish TV, said, "We have started using voice message service where we are recording the message in different languages according to the targeted region and audience."
Keeping in mind the nascence of this industry based on low entry barriers and innovation, it may lead to an infiltration of unscrupulous elements with a short-term view of profiting from this medium. Sites such as consumercomplaints.in and consumercourtforum.in, are flooded with complaints, portraying the annoyance against these unwanted promotional beeps.
A stricter implementation of the DND (do not disturb) service that has not been effective so far since its introduction in 2007 may be an answer, but as an industry expert cautioned: "Regulation should be such as to help the industry grow in a disciplined way and not with the intention of killing it."