Text Messages Rule Mobile Ads

Simple ad formats reaching the widest audience

Mobile advertising has been the next big thing for a while now. But although text messaging is popular among young adults, the 160-character format has yet to become a mass influencer.

Still, consumers who respond to mobile ads are most likely to engage with text messages, according to a survey of mobile users ages 15 and older in the US by the Direct Marketing Association (DMA). Seven out of 10 respondents to the DMA's "Mobile Marketing: Consumer Perspectives" study who had acted on mobile ads said that text messages for a product or service had prompted their actions.

That was more than three times as many as responded to a mobile Web offer or coupon.

But even text messaging is not about to replace other marketing mainstays such as e-mail or direct mail. In fact, only 1% of US Internet users surveyed in February 2008 by ExactTarget picked text messaging as their channel of choice for opt-in communications. Instead, the medium is better-suited for targeting specific audiences, and as part of multichannel campaigns.

Text messaging may not dominate mobile advertising as more mobile users with sophisticated phones and data plans come into the fold (think iPhone and its ilk). Yet the simplicity and compatibility of texting is likely to ensure its long-term appeal in the same way text-based e-mail has remained viable.

In the meantime, the bigger issue is when mobile advertising will become a common campaign tactic. For most marketers and advertisers, mobile is still only getting experimental budget at most.

Mobile advertising's toddler status was reflected in a February 2008 iMedia Connection survey of US online marketers. Although about one-quarter of respondents said they were open-minded enough to decide on a case-by-case basis whether to use mobile ads this year, more than two-thirds said they would do no more than dabble in the channel.

Still, "excitement about mobile advertising is building," said John du Pre Gauntt, senior analyst at eMarketer. "Even those who currently discount mobile do so from the perspective of timing or tactics, not so much because of the inherent attraction of the idea."

American Airlines ditches Kayak

American Airlines is about to pull its airline listings out of Kayak and is considering doing the same with Orbitz. If it does so, other airlines such as Continental and Northwest may follow suit.

Airlines don’t like the booking sites because they have to pay them a referral fee for every ticket they sell, as opposed to capturing the full fare when travelers book on their individual sites. Even though that only amounts to a few dollars per ticket, every dollar counts to the troubled airlines?especially now with fuel prices going sky-high and the consumer spending going down.

American Airlines has a particular beef with Kayak because it tends to show AA flights through its partnership with Orbitz instead of directly from American. That means American has to pay a double tax, once to Kayak and once to Orbitz. (The deal between Kayak and Orbitz, charges the competing CEO, was meant to drive up traffic numbers on Kayak as it was potentially seeking an IPO prior to raising $200 million instead last December).

The decision to sever ties with Kayak supposedly has already been made. The only question is whether Orbitz can salvage its relationship with the airline. This should strengthen competing travel sites, especially newer ones that link directly to the airlines like Mobissimo and Yapta.

Travel sites receive 50% of visits from travel media & referral sites

According to a new PhoCusWright study, just over half of the top 200 travel Web sites in February 2008 were booking Web sites. The remaining were referral and media sites, which attract travel shoppers with expert and traveler-generated reviews, metasearch capabilities, and maps of travel destinations.

Travel bookings are no longer the whole story as advertising and referral-based business models gain ground.

Just over half of the top 200 travel Web sites in February 2008 were booking Web sites.

The remaining were referral and media sites, which attract travel shoppers with expert and traveler-generated reviews, metasearch capabilities, and maps of travel destinations.

Travel industry research authority PhoCusWright and Hitwise partnered to track and analyze the online travel space.

The resulting report, Search, Shop, Buy: Inside The Tangled Web of Online Travel uses traffic data from Hitwise to determine how Travel 2.0, the Long Tail and search are affecting the online travel space, tracing the trends that are emerging throughout the travel search, shopping and buying processes.

“Search and shopping sites are having a major impact on the travel category, and their power is expected to grow as the slowing economy prompts travelers to spend even more time searching for travel deals,” said Cathy Schetzina, technology analyst for PhoCusWright. “This trend underlines the need for travel suppliers and intermediaries to target search marketing and online advertising efforts based on a clear understanding of online travel shopping patterns.”

Also among the report’s findings about the trends impacting online travel:

- While travelers continue to report shopping at an online travel agency site and then switching to a supplier site to book (and vice versa), online travel agencies and suppliers in fact lose more downstream traffic to competitors of the same type of site.

- Metasearch sites were initially hailed as a boon to suppliers, but online travel agencies are in fact the top beneficiaries of these sites.

- Despite the fact that two general social networks rank within the top 10 sites on the Web overall, only two travel-specific social networks appear within the top 200 travel Web sites.

The report also analyzes fast-growing travel Web sites based on increase in visits year over year, search engine traffic to the travel category, including search term patterns, and lifestyle descriptions for online travel shoppers.

Text Messaging Huge with Young Adults

But no mass influence yet for text marketing

Text messaging is especially popular with US adults ages 18 to 34, according to Universal McCann's 2008 "Media in Mind" study. Respondents from that age group sent an average of 13 text messages every week.

In last year's survey, nearly one-half of all US adults said they had never sent a text message. This year only 41% said so. Among 18 to 34 year-olds surveyed this year, just 22% had never sent a text message, down from the 38% the prior year.

"The great unwashed—those people who have never sent a text message—is getting smaller all the time," said Graeme Hutton, senior vice president at Universal McCann, in a MediaPost article.

Text messaging is still new for many marketers, as evidenced by a February 2008 ExactTarget study. The proportion of Internet users surveyed who owned a mobile phone and had made a purchase after receiving a text message was a paltry 6%. That percentage was higher among younger users, but still mostly in the single digits.

Such low numbers could be interpreted to mean that text messages are not a very effective way to market, but they might also just reflect that such marketing is still relatively rare.

A December 2007 BIGresearch study of US Internet users found similarly low text message influence: 6.4% of respondents said they had bought electronics because of text messages, and still fewer said they had influenced purchases of other types of goods.

If mobile marketing is to move beyond the experimental budget stage, text messaging is likely to be part of the mix, in part since the messages lend themselves to existing terminology and benchmarks, according to John du Pre Gauntt, senior analyst at eMarketer.

"Mobile messaging is tailor-made for getting mobile marketing past the early adopter stage and into the mainstream," Mr. Gauntt said. "Messaging has a clear currency—that is, messages sent, received, opened or acted upon—for all parts of the mobile marketing chain to use."