Use of mobile phones increases rapidly all over the world, and number of phone users reaches number of citizens in many countries. For example – customer base of major Ukrainian operators reached 40 mil. users while total population of Ukraine is ~47 mil. people. Such popularity makes mobile phones a very perspective and important marketing tool, especially with increase of communication capabilities of handsets.
The most common and easiest way to reach mobile phone users is SMS. However most people (including the author of the plan) do not like unwanted messages, and have a range of opportunities to block such spam, including switching to other operator.
The primary task of any advertiser is to target right audience in right way, or simply to following well known model: “Attract, Interest, Desire, Action”. However marketing communication to mobile phone users has a range of technical limitations: message must be short, comprehensive and in most case simple (including simple text based design). We have the only choice to make this communication effective: to make user willing to receive our marketing message.
It’s not an innovation to place ads in subscribed or broadcasting media, but mobile content market offers unique opportunity for generating ad revenues. This market just has been developing, encompassing a range of business models, from a traditional licensed-content one to electronic credit and cyber cash applications; early entry into this market will create long-term competitive advantage.

Today there are about 5000 active WAP sites in Russian speaking internet with total 700 mln. ad hits per year. Affiliate programs development by mobile content providers (Playfon in Russia) makes mobile content sales popular among WAP site owners. This leads to saturation of market with any type of content, including games, ring tones, tests, etc;
However, market researches show customers willing to receive all the above mentioned products and services for free, therefore more and more companies respond to this customer desire. For example, there are services offering incentives and free content for customer viewing or responding to ads: “Wallet sharing” model of payment for mobile services, «Sugar Mama» by Virgin Mobile, video ads on Verizon Wireless, other.
It’s forecasted that world famous brands (ad budget $100 billion p/a) will spend 25-30% ($25-30 billion) on mobile advertisements in the near future. Today Western mobile advertisements market is 2% of the total and estimated at $12 billion p/a.

SMS advertising is evolving as an extremely desirable method of target marketing for a range of market groups ranging in age from late-teens to middle aged. In many cases SMS advertising can be integrated into planned advertising campaigns to leverage response rates, or new campaigns can be built with SMS text messaging as the primary mechanic. With over 80% market penetration, SMS advertising industry is unlikely to jeopardize this success.
However, advertising must meet important criteria before advertiser proceeds. These criteria are based on: offer, industry, value to the recipient, value to the advertiser. In other words, advertiser must know his audience and understand its needs. Currently, SMS advertising is either unfocused (sending SMS to people listed in operator’s database) or with limited focuses (SMS to existing clients, according to event list, etc). These factors negatively affect response rate and market penetration.
To solve these problems, mobile marketing portal http://mobefree.ru developed new concept of SMS advertising, where:
- Recipient agrees to receive advertisements: our free SMS services have value for him and he signs user agreement. This is also important considering the fact that any form of outbound marketing to consumers, like SMS advertising, is often viewed as spam, and it becomes obvious for established brands been very carefully to enter this very new market;
- base of recipients is representative sample of country population and has been growing: portal is heavily promoted and offers new interactive services;
- advertising cost are not considerably higher than cots of SMS traffic; these costs include cost to attract SMS recipient;
- base of recipients has value for advertiser, i.e. he can target right audience with right message: we can segment base according to user age, sex, location, occupation, hobby, and subscription topic.

Content subscriptions by SMS are also not innovative type of service. There are numerous offers to subscribe for horoscopes, jokes, news by SMS. In most cases these are premium services offered by content providers or media companies. In contrast, we created free SMS subscription service, which has become the main attraction for portal visitors.
However, free SMS have range of limitation, described above; in addition, as a rule, one short message is not enough to cover major news or simply to tell a good joke. For these reasons mobefree.ru created SMS line: subscription to receiving 5 SMS per day at any topic selected by customer. We charge only small fraction to usual SMS price to cover processing costs for this service. Client may use the same interface to subscribe to free and paid SMS.

Sending SMS is a global business with competitive proposition depending on SMS price, network coverage, additional services and customer support. Paradoxically, there are no mobile operators in this list, because all of them “play” on own geographical territory and generate revenues from local customers and from services, offered as a result of cooperation with other operators. Contrary, SMS providers, are global players and generate revenues from customers willing better prices for higher coverage and more sophisticated services (message templates, address book, mass mailings, API to connect server, etc.).

Nowadays there are few companies focusing exclusively on SMS advertising; since this is very new business, it has become part of portfolio of marketing companies and mobile operators. Some of few players in SMS advertising are:
· 4INFO, US – free SMS subscriptions since 2006, like in our business model;
· Superphone, Russia – share revenue model for smart phone users;
· Blyk, UK – free connection minutes for ad recipients, adults only.

Industry has few trends which may have negative impact on effectiveness of SMS advertising. Our product was designed so we overcome these trends and are able to compete effectively in a global market.

Trend 1. Unfocused messaging, without marketing segmentation of user base.
In Europe alone, as many as three out of four mobile subscribers reporting they received an ad via SMS. However, analysts afraid that this unfocused approach will kill “the goose that lays the golden egg by taking a tack” similar to that in email marketing. In this respect task for successful marketer is make ads as personal and attractive as possible. Otherwise, potential of this channel will be negatively affected with user ignorance or intolerance.

Trend 2. SMS ads without permissions.
According to M:Metrics, “Survey of mobile subscribers”, the lion’s share-fully 73 percent-of consumers across all geographies said the ads are coming from their mobile service provider, which as a rule do not ask for permission. Another 21.1 percent reported they were contacted by a company that did not have permission to advertise to them.
Such practice may pose serious treat to industry, considering the fact that mobile phone is treated as personal communication media. Examples of such treats are Russia where unsolicited SMS ads are prohibited by law and Ukraine where this is a crime.

Mobefree.ru offers exciting opportunities in development of mobile marketing in Russian speaking countries. Mobefree.ru offers free services for subscribers, attracting them to site and sells SMS advertising and SMS traffic over the world.

Industry expert

Article Source:http://www.articlesbase.com/business-ideas-articles/sms-marketing-1656533.html