Wherever marketers venture, regulation is sure to follow.
Digital marketing is no exception, as the Advertising Standards Authority's (ASA) Committee of Advertising Practice (CAP) has shown by issuing its first set of guidelines for marketing via mobile phones. The increasing number of brands - from Coca-Cola to yoghurt drink Yop - using mobile as a channel to drive sales and relationships, underlines the necessity of CAP's 'Help Note on Mobile Marketing', which states that consumers must either give their explicit consent or be existing customers to receive mobile marketing.
This is particularly important in view of the limitations of SMS, the predominant form of mobile marketing. The direct and intimate nature of texting is a strength, but coupled with the 160-character limit for a message, it has the potential to be misunderstood and cause offence. Complaints about text messages to the ASA increased by 500% in 2003 to 353, compared with 65 in 2002.
The guidelines are partly a response to this rise in complaints as well as a means of preventing a growth in mobile spam. CAP chairman Andrew Brown says they should ensure the effectiveness of opt-in communication.
'It is important that marketers targeting consumers via their mobiles conduct their business responsibly in this very personal medium,' he adds.
Carsten Boers, chief executive of mobile marketing com-pany Flytxt, which has run campaigns for Coca-Cola and Orange, points out that the actual number of complaints made about the medium is small. He adds that, unlike email, where problems with spam are well-documented, there is a cost associated with sending out texts on a mass scale.'Mobile spam is not as big an issue as the media coverage suggests because the economics of mobile do not work for spammers.'
Peter Larsen, European managing director of mobile services provider Enpocket, which has worked with William Hill and the NHS, agrees. 'The technical dynamics of mobile make it easier to nip spam in the bud,' he says. 'There is an incremental cost to the spammer not found elsewhere and the sector has been very proactive about the situation.'
Nevertheless, some promotions cross the line inadvertently. Tim Gardner, managing partner of mobile consultancy iris-north, which works with Million-2-1, the holder of a UK permit for SMS lotteries, explains that there is a fine line between gaming regulations and the rules regarding SMS promotions. Many brands, he says, are running SMS pre-diction promotions and are not even aware that they are potentially breaking the law.
Gardner says marketers must be '100% compliant' to avoid damaging their brands. Million-2-1 has invested more than £500,000 in ensuring it does just this, by working closely with the Independent Committee for the Supervision of Standards of Telephone Information Services (Icstis), gambling addiction support organisation Gamcare, Ofcom, the police and the Gaming Board of Great Britain.
If prevention is better than cure, the CAP guidelines are timely. As the successes pile up, so the number of brands using mobile will grow.
Cadbury cited SMS as a key mechanism for boosting sales in 2003 and newcomers such as Yop have used it in on-pack promotions to boost loyalty and create a database of opted-in consumers for future promotions.
The CAP is not the only body to have produced guidelines; the Mobile Marketing Association (MMA) issued a more comprehensive set last year. But the CAP's profile with marketers who are new to mobile as a marketing channel has lent it credibility. As Flytxt's Boers says: 'Mobile has the potential to grow as a medium. Although companies are increasingly using mobile, there are plenty of brands that may only be familiar with the ASA. The CAP code mirrors the directives and guidelines already in place.'
Enpocket's Larsen agrees: 'The guidelines are a positive step. They match the MMA benchmarks and it is good that a more traditional marketing body is taking a firm position on mobile.' He believes mobile marketing still has more to offer a wider range of brands and the guidelines should help marketers who have yet to try the medium to overcome the 'fear factor'.
Chris Ambler, managing director of interactive agency WARL evolution, claims the potential of SMS is self-evident. 'It reaches 80% of the UK population, is read by 94% of recipients, reaches them day and night in the supermarket, the pub, even in bed, and allows them to respond instantly,' he says. 'Mobile is no longer a peripheral activity for over-excited teenagers.'
But, Ambler warns, this can be a double-edged sword. 'Abuse your invited position in my mobile inbox and I will not respond and may feel worse about your brand as a result. The guidelines - and last year's regulatory changes - are to be welcomed. Hopefully they have arrived in time to save mobile from becoming the discredited medium that email now is.'
Businesses that fail to behave responsibly with mobile marketing have more to worry about than a negative impact on their brands, because the ASA has teeth. 'We don't impose fines, we publicise our findings and ask for the promotion to be stopped. If someone is unwilling to do that, it is referred to the appropriate authority,' says an ASA spokeswoman.
For mobile, this includes the regulatory body for premium mobile communications, Icstis. In May it imposed fines totalling almost £500,000 for the sending of spam and scam text messages encouraging consumers to call premium-rate numbers. Six companies were fined £75,000 for breaches of Icstis' Code of Practice, including sending unsolicited text messages, making unsolicited phone calls and using automated calling equipment to leave 'missed calls'. But Boers says the sort of mobile scams that were flourishing 18 months ago, such as offering entry to prize draws, have stopped. 'Returns did not justify the cost of sending them,' he explains.
Effective marketing, however, is not just about obeying rules. Ambler says SMS should create value for the recipient each time a brand communicates with them. 'Timely added-value information, sponsored entertainment and instant sales promotions with mobile coupons, can all deliver value,' he says.
One example of such a campaign is Yop's SMS promotion.
It wanted to boost sales of two flavours - raspberry and strawberry - by 10% over a period of six months last year, and briefed marketing agency Attention, mobile marketing services company Sponge and wireless specialist Netsize to create an SMS-based on-pack promotion across 2.5m bottles.
The promotion offered consumers the chance to win 'Trainers for life', as well as bottles of Yop and JD Sports gift vouchers. Consumers entered via SMS using a unique code printed on the drink's label. A return text informed them immediately whether they were a winner.
Overall redemption figures exceeded targets by 53%, according to Netsize. Yop brand manager Olivia Munden says: 'Our aim was to provide a fresh and relevant means of attracting and communicating with our audience. Based on this success, we'd have no hesitation in choosing SMS as an effective and easy-to-manage response mechanism.'
Laying the foundations
Despite this positive example, WARL's Ambler believes more can be done to build on the guidelines. 'The IPA and MMA need to redouble their efforts to ensure that advertisers understand the code and the regulations,' he says. 'It would also be good to see the network operators getting involved and encouraging their users to report any unsolicited SMS messages.'
The progression of technology poses further burdens, as well as opportunities, for mobile as a marketing channel.
Orange has already started to detail its plans for 3G in the UK, following the launch of vanguard operator 3 some 18 months ago. The rise of camera-phone handsets also offers the allure of combining pictures with words and hence more creative mobile marketing communication.
Larsen believes the guidelines now in place should remain relevant as technologies develop. 'So many different services are developing. There is one- and two-way SMS communication, MMS, Java and 3G. These will move the mobile marketing industry ahead, but the key is to get the permission process in place. Then we can build on that.'
- Philip Smith is editor of Revolution
- The Data Protection Act 1998 and Privacy and Electronic Communications Regulations 2003 must be adhered to.
- CAP says 'explicit' consent must be obtained from consumers before an SMS is sent, unless similar products are being offered to an existing customer.
- Significant conditions should be stated in any initial SMS communication when a promotion is run.
- Mobile marketers must be explicit about their identity.
- Total charge of communication must be made clear.
- Consumers should not be charged at a premium rate for opting out of future communications.
Do consumers want to be texted?
The success of text messaging in personal communication is well-documented.
In March the daily average was 69m person-to-person texts. The medium has also been resoundingly successful commercially, as seen in the use of SMS voting on TV shows such as Big Brother.
Most European mobile phone users are also willing to receive SMS marketing and promotional offers on their phones. Eighty four per cent of phone users in Europe are in this bracket, according to a survey from Empower Interactive, which supplies data service infrastructure to mobile operators, and its partner Firedog Design.
Ironically, 58% of the marketers who responded to the survey pointed to a lack of consumer acceptance as a barrier to growth in the sector.
However, Empower Interactive says most of the users it questioned would be willing to embrace carefully targeted text promotions, including offers from local bars and restaurants, loyalty programmes, such as Nectar, and service promotions from the mobile operators themselves.
'It shows we are ready as consumers to accept relevant marketing traffic onto our handsets. But it does have to be relevant,' says Philip Stevens, sales and marketing director at Empower Interactive. 'What surprised us about these results was the amount of consumer acceptance; after all, one person's spam can be another's marketing message,' he adds.
- 2.1bn text messages were sent in the UK in March, an increase of nearly 80m on February, according to the Mobile Data Association.
- Person-to-person texts sent across UK operators in March rose by almost 25% year on year. The daily average was 69m.
- Picture messaging is also growing in popularity. The number of MMS messages rose by 40% in the three months to February 2004, according to mobile agency Enpocket.
- 8.3bn picture messages will be sent globally this year, predicts research firm Ovum.
- 1.4bn WAP page impressions were viewed in the UK in March - the highest number since records began in September 2002, according to the Mobile Data Association.