Companies discover marketing power of text messaging

CHICAGO - Like any normal consumer, Tom Gruss was leery about the idea of a company sending promotional text messages straight to his cell phone. Who needs a bombardment of sales pitches in yet another format?

But he found one offering a heads-up about changing gasoline prices at Meijer Inc. stores benign enough to sign up, especially since he could opt out at any time. Now, he says, ''I'm a fan.''

''In my eyes, this is an easy way of getting 'passive marketing' and having it pan out as actual savings,'' the Indianapolis-area resident said.

Get ready for the inbox on your phone to fill up faster. From fast-food chains to carmakers to consumer goods manufacturers and sports franchises, more and more companies are adopting text messaging as a way to target consumers on the move.

The practice has taken off in the past year and appears to be a trend ready to explode, according to Gerry Purdy, an analyst for Frost and Sullivan.

''Probably the most important medium for advertising in the 21st century is going to be the cell phone, not print media, not billboards. It's just a matter of time - there are just too many of them,'' he said. Globally, the number of cell phones in use recently crossed 2.5 billion, an increase of a half billion in just 12 months, according to Wireless Intelligence, a joint venture between the GSM Association industry group and the research firm Ovum.

It's also a matter of companies going where consumers are. After all, more than 95 million Americans are considered active text messagers, according to the Yankee Group research firm. And marketers see it as low on cost and high in effectiveness.

Unlike in other nations, where cell users typically pay for messages they send but not those received, most U.S. cell subscribers pay for both outgoing and incoming messages, often buying plans with a monthly allowance. It's unclear, then, how many will ''opt in'' to a marketing campaign unless the marketer foots the bill for the incoming promotional message. That is the approach wireless carriers themselves often take when text messaging account information or promotions to their own customers.

Verizon Wireless says marketers have shown tremendous interest in arranging text-messaging campaigns where recipients wouldn't be charged, though no deals have been cut as yet.

Text messaging ''provides anytime, anywhere access to the consumer because the mobile phone is always on and always available,'' said Laura Marriott, executive director of the Mobile Marketing Association.

It is just a part of the fast-growing field of mobile marketing, which also extends to other mobile device features such as mobile Web browsing, streaming video and downloads of ringtones, video games and music.

Contests and sweepstakes that require consumers to enter via text message are among the most popular campaigns so far, according to Marriott, citing McDonald's, Burger King, Procter & Gamble Co., General Motors Corp. and CBS Corp. among the corporate giants that have used them.

Meijer, the Grand Rapids, Mich.-based grocery retailer with 179 stores in Ohio, Illinois, Indiana, Michigan and Kentucky, decided to be more direct - with consumers' permission.

During a time of frequent gasoline price spikes, it launched an opt-in program in the Indianapolis market in July with mobile-marketing firm SmartReply Inc. Consenting customers of its gas and convenience stations are sent text messages whenever Meijer is about to raise pump prices by 5 cents a gallon or more, giving them two to four hours to fill up at the lower price.

The big run-up in gas prices has reversed of late, but Meijer says the enthusiastic response in Indianapolis has prompted plans to roll out the program across its entire chain by the end of the year.

Michael Ross, director of customer relationship management for the company, said customers see it as fun to beat pump price increases with inside information.

The 34-year-old Gruss, who works for a mobile phone distributor and has a 75-mile daily commute, calls it a ''quick, easy and painless'' way to save money when he fills up his Jeep Cherokee.

''It's passive and you can ignore, delete or do anything you want with it,'' he said. ''If it got overbearing, you could go on the Web site and click and you're off.''

Text-message marketing campaigns took root first in Europe and Asia, where corporations found it easier to connect.

McDonald's Corp., one of the world's most prolific advertisers, cited success with its ''Win World Cup Chicken'' game in the United Kingdom last spring. Thousands of customers text-messaged a code they received when ordering products in the restaurants for the chance to win World Cup soccer tickets.

Use of the tactic in the United States was delayed by technical obstacles to running the campaigns on different carriers and mobile-phone platforms. With those problems resolved, McDonald's is among the companies looking at making text-messaging a significant part of their U.S. marketing, beyond just promotions and games.


Recent examples of corporate marketing campaigns using text messaging:

•Meijer Inc. offered consumers who opted in a chance to get advance notice of impending gasoline price increases at its stores, in order to take advantage of the lower price.

•Starbucks Corp. ran a text-based scavenger hunt and trivia game this year, ''Starbucks Summer Pursuit,'' with consumers opting in to receive a series of SMS questions on their cell phones. Replies with pictures of the answer gave senders a chance to participate in a scavenger hunt in New York City and win a trip to Costa Rica.

•McDonald's Corp. gave away World Cup soccer tickets to customers who text-messaged a code they got with products ordered in its restaurants in the United Kingdom.

•Pernod Ricard's Stolichnaya vodka offered consumers who opted in via text message new product updates, alerts and promotions in the ''Stoli Insider'' SMS program with an opt-in on Stoli.com and via the shortcode STOLI.

•Church & Dwight Co. Inc.'s Close-Up toothpaste offered iPods to texters who flirted with fictitious characters in its ''Rock, Paper, Kiss'' game.

•Hershey Co. ran a promotion in which purchasers of Hershey's candy bars could text their UPC code numbers to enter a sweepstakes for a trip to the X Games.

•Burger King and the Baltimore Ravens offered free tickets to future NFL games and the right to toss the coin at midfield before the game to fans texting in the word KING.

•Wisconsin-based Sentry Foods grocery chain offered text messagers a chance to win a shopping spree.

•Cadbury Schweppes PLC included a code on Cadbury's candy bars in the United Kingdom that consumers could text in to win prizes; company gained information on what type of candy bars people buy at different times of day.

•Procter & Gamble Co. ran a text-messaging game in which the company distributed cocktail napkins printed with codes and directions to bars, engaging patrons in a game involving dating questions while promoting Crest Whitening Plus Scope Extreme


•P&G's Secret Deodorant gave passers-by in New York City a chance to text in their innermost secrets and have them displayed on a billboard in Times Square, benefiting disadvantaged women via the company's pledge to donate money for each secret told.

Sources: Companies, marketers, published reports