eMarketer explains where best to reach the mobile customer– whether SMS, voice or MIM.
It is logical but not quite right to deduce that Americans simply love the sound of their own voices. A closer look at most U.S. voice rates in comparison to other countries suggests that talk is cheap in the United States vis-à-vis the rest of the world. Data published by the Telecommunications Management Group (TMG) in January 2006 showed that average American mobile voice usage is four times higher than it is in Europe.
However, U.S. operators are noting a significant uptick in messaging-related traffic over the last year. According to CTIA — The Wireless Association — U.S. operators recorded a 71 percent increase in SMS traffic in June 2006 (12.5 billion messages) compared to June 2005 (7.3 billion messages). On a six-month basis, the U.S. figures are even more impressive, with 98.8 percent growth in the first half of 2006 (64.8 billion messages) compared to the same period of 2005 (32.6 billion). CTIA also reported that by June 30, 2006, U.S. operators had recorded $6.5 billion in mobile data revenues. Using a 70 percent rule of thumb for the proportion of messaging revenues to total mobile data revenues according to previous estimates by Morgan Stanley, the U.S. messaging market might reach about $9.1 billion by the end of 2006.
When M:Metrics surveyed U.S. mobile users about the mobile data services they access over a rolling three-month period, text messaging came out on top at 38 percent, which is well under European, let alone Asian, norms. However, use of MIM was higher at 7.4 percent, probably due to the fact that more Americans are IM users as a matter of course.
On the handset side, U.S. mobile customers are placing greater value on the ability to send and receive messages. J.D. Power and Associates reported in May 2006 that sending/receiving SMS messages (22 percent) ranked just under use of the speakerphone (26 percent) as the handset feature American users turned to the most after voice calling.
However, all is not smooth sailing in the U.S. messaging growth story. Granted, the last 18 months has seen a substantial shift in messaging traffic that suggests the market is maturing into mainstream adoption, but a Harris Interactive study in June 2006 revealed that many Americans still do not understand why much of the world is worked into a lather over messaging. Over 70 percent of those surveyed didn’t see a need for using their mobile handset for messaging.
The plot thickens, so to speak, when messaging is tied to another great American pastime, watching television. “American Idol” on Fox Television planted SMS voting into the conscious of mainstream America, even though in its first few seasons it was available only to AT&T Wireless, and later Cingular, customers.
However, those early days have spawned a new cottage industry of mobile-led referendums on everything ranging from whether a given Idol singer deserves a shot at the next round or a sports player will or will not score, as well as local issues mediated largely by radio. According to a Mobile Data Association/M:Metrics survey conducted in January 2006, nearly a quarter of the highly-sought-after 18 to 34 demographic participated in some form of SMS voting, either through television or radio. The same study revealed a 60 to 40 preference by men for SMS voting, a data point sure to throw gasoline on the fire of marketers’ interest in reaching this population.
John Gauntt is a senior analyst at eMarketer. This article was drawn from his report Mobile Message Marketing: Cash Not Flash.
