Short message mania snares new demographic
By Joan Engebretson

Just when short message codes appeared destined to be the exclusive province of the cellular industry’s youngest customers, along came the hit television show “Deal or No Deal.” On screen, contestants try to guess the dollar values hidden inside Halliburton cases held by svelte models and to maximize the amount of cash they win by playing the odds. Meanwhile, viewers have the opportunity (for 99 cents a call) to play a simpler game of chance by entering short codes using their cellular provider’s text message service. Participants guessing the correct number are entered into a $10,000 sweepstakes, with the grand prizewinner announced at the end of the show.

“One thing that excites us about ‘Deal or No Deal’ is that it penetrates a different demographic,” notes David Oberholzer, associate director for content programming at Verizon Wireless. “They’re older and less urban.” Verizon is one of several wireless carriers supporting the offering–and in the process garnering both airtime charges and a piece of the revenues. Although industry stakeholders decline to reveal response rates, everyone seems to agree that they’re substantial.

“’Deal or No Deal’ caught everyone by surprise,” comments Laura Marriott, executive director for the Mobile Marketing Association. Although most consumers who use short message codes for purchases and promotions are between the ages of 13 and 34, “Deal or No Deal” and similar shows are helping to change that. “They’re driving a lot of consumer adoption around premium short codes and doing a lot to educate the consumer on the opportunities available,” said Marriott.

The widening of the audience for short message code promotions is one factor that is helping to drive exponential growth in the market. As of mid-2006, cellular customers were sending 10.2 billion text messages per month—up from 7 billion a year earlier, said Marriott. That includes peer-to-peer, or traditional friend-to-friend text messaging, which Marriott believes is growing at a slower rate than promotional applications.

Some are predicting even stronger growth for 2007. “Business is really booming,” said Oberholzer. “We expect to double our business year on year.”

As of October, research firm M:Metrics found that just 2.4% of mobile phone users had responded to a short message code ad, with a third of that group having actually purchased a product. As such offerings become more mainstream, that leaves plenty of room for future growth. “We’ve done very well with a relatively small subset of users,” said Chris Black, director of mobile marketing and interactive media for Cingular. “If we can increase the amount of customers using these services, we should be in great shape moving forward. There’s a lot of room to grow. As time goes on, more and more people over the age of 35 are starting to discover this. What’s made them come out of the woodwork are things like premium television voting. That has taught them how to text. Later on, they may be more apt to go onto the carrier deck and grab a ringtone or grab some niche content from outside.”

Reverse auctions

Providers of the sort of niche content to which Black refers are equally effusive about their future prospects.

One such content provider is Limbo 41414, which embeds its short code address in its name. After less than a year in operation, the company–which offers a hot new reverse auction offering–claims several hundreds of thousands of users per month.

“We want to occupy that time of day when you’re not doing something important,” commented Limbo CEO Jonathon Linner. “At any time we have 20 or 30 games going on where you can win anything from iPods and Tickle Me Elmos to Porsches.”

Games last anywhere from a few hours to more than a week, and the winner is the person who picks the lowest number that no one else picks. Participation is usually free (aside from airtime charges), with costs covered by sponsors as diverse as Proctor & Gamble and videogame publisher Electronic Arts.

Advertisers are attracted to the offering because of the ability it gives them to influence users, Linner says. The average participant makes between 50 and 60 plays per game, according to Linner—and each play offers the advertiser an opportunity to send a text message response. In a game centered around Gillette’s Venus razor, for example, a player texting the number three might get a message back saying, “That was a close shave. You got here second. Somebody already picked three. Want to play again?”

“Everything is user-initiated, so they pay a lot of attention to the messages there,” notes Linner. Two percent of participants report purchasing featured products with price tags above $200, while another 49% reported that they were more likely to purchase the product, Linner says. “On the Internet, if you got a two percent click-through you would be happy,” he added. “In this case, two percent are actually buying the product.”

Like “Deal or No Deal,” Limbo also is introducing new users to short message codes. “About half of the people who play had never text messaged prior to joining Limbo,” said Linner. “Their age bracket depends on the prize and how they’re hearing about it. We gave away a trip to La Costa Spa on Lifetime and the average age was mid-30s and mostly women.”

Although service providers do not earn revenue on Limbo promotions beyond airtime charges, those charges can add up. “Carriers typically make millions of dollars a year on our text services from standard carrier fees,” noted Linner. Recognizing that, he says Sprint and Cincinnati Bell have begun promoting Limbo—and he speculates that airtime charges may have been one of the reasons Sprint and Virgin Mobile recently launched short message contests of their own. “They win in two ways,” he said. “They’re happy to get more people to send more text messages. And a service that gets people who haven’t used text messages before is exciting and customers will look favorably on them for doing it.”

Impulse-enabled

Another company that has centered its business around short message codes
is ShopText, which launched in November. “We’re a direct-to-consumer mobile commerce company for physical goods,” said ShopText founder and chief marketing officer Mark Kaplan. “We have the first end-to-end system for using text messaging to close the loop between the media, product and the consumer. It creates a point-of-sale opportunity out of traditional media and events.”

The company is working with Cosmo Girl, Lucky, Details and other print publications to offer advertisers a new way to reach potential purchasers of their products. Print ads invite readers to send short message codes to ShopText to request product samples or to purchase products. Consumers can register with ShopText for any promotion the company supports by providing their street address and payment information, which can be done through text messaging or by replying later via an email sent out automatically by ShopText. According to Kaplan, 50% of consumers who initiate a text message to ShopText complete the registration process. “We issue you a unique PIN number and from then on, you can shop ‘til you drop,” he said.

In some ways, ShopText’s business model resembles that of companies that provide ringtones, cellular “wallpaper,” and other electronic content. As with such offerings, cellular operators get a cut of ShopText’s revenues. Unlike with such offerings, however, ShopText has the extra task of processing orders for physical goods. “On the back end, we integrate the datastream to get the fulfillment taken care of,” Kaplan explained. “It’s not something that downloads and gets consumed.”

Kaplan used the term “impulse-enabling” to describe ShopText’s technology. “If you’re in a park reading a magazine, what’s the likelihood that you’ll remember to go to a Web site later to request information?” he asks.

Creative new short message applications such as premium television voting, reverse auctions and impulse-enabled fulfillment should help drive text messaging to the ambitious growth targets that cellular operators have set. As we saw with Internet promotions, however, what’s hot today may quickly become passé, requiring content providers, network operators and advertisers to continually devise new applications in order to fuel continued momentum.

Both Limbo and ShopText are already plotting their next moves. Limbo expects to join ShopText in the merchandise fulfillment business, as auction participants have requested the ability to purchase the products they see promoted through Limbo’s offering.

Meanwhile, Kaplan says ShopText’s next venture will enable attendees of an upcoming concert tour to purchase merchandise through their cellphone using short message codes. “You could order a CD of the concert you’re at while you’re there and have it shipped so you don’t have to carry it around with you,” he said.

Orbitz launches hotel late arrival notification service
December 20, 2006

Orbitz is launching a hotel notification service for customers who book a package (flight + hotel) through the website. If their flight is delayed, Orbitz will personally call customers and with their permission alert the hotel to let the front desk know they will be arriving late. In addition to late arrivals, OrbitzTLC works for customers who may not make it at all to their hotel. If a flight is cancelled, Orbitz will personally call customers and with their permission work to rebook affected customers at a new hotel.

“We are now working to ensure that your hotel stay will be honored if your flight is delayed, one more way the high tech, human touch of OrbitzTLC serves our customers,” said Randy Wagner, Chief Marketing Officer, Orbitz Worldwide. “Our customers tell us that the extra OrbitzTLC they get free, every time they book with us, is very valuable because it means they’ll have a more enjoyable trip.”

The new OrbitzTLC hotel alerts works in the following way:

1. When booking a package (hotel + flight), customers need to include a mobile phone number in their “traveler profile” so that they can be reached in-transit.

2. The OrbitzTLC Center will monitor the flights of customers who book hotel + flight trips and flag arrival delays that could mean late arrival to a hotel after midnight. This is the time when most hotels release rooms that customers with reservations have not checked in to yet.

3. OrbitzTLC Agents will personally contact customers via their cell phone to inquire if they would like Orbitz to call ahead to their hotel to ensure their reservation is honored.

4. Once receiving customer consent, OrbitzTLC Agents will call ahead to a customer’s hotel to inform the property of the late guest arrival and ensure their reservation is honored.

“Many lodging properties’ reservation systems will mark a ‘next day’ arrival for customers checking in at a hotel after midnight,” said Seth Brody, vice president of hotels for Orbitz Worldwide. “Hotels might cancel reservations for late-arriving guests, so Orbitz is creating unique solutions to ensure our customers always have a room during their trip, regardless of unexpected delays.”

Rich Internet Applications Deliver Fidelity at Your Fingers

The penetration of broadband has largely been attributed as the major driver of online travel growth (i.e., as consumers came online, they bought). However, as this demand and behavioral shift have occurred, consumers have fired up their lightning-fast connections only to be generally disappointed (ergo the general slowing of online travel growth). Lost somewhat in a sea of travel shopping experiences, haggard by the mind-numbing sameness of it all, consumers appear tired of shopping in travel “bazaars.” Time-challenged, attention-starved and perhaps a little over-caffeinated, the online generation that was raised on video games and is enamored with YouTube needs sites that deliver experience fidelity to keep customers “there.”

Like the express checkout line at a retail shop, first and second-generation online travel sites (including suppliers) were all about minimizing the number of clicks between “shop” and “buy.” For example, through continuous innovation hotel sites migrated from 12 to nine to four clicks (if you got what you wanted on the first try), and like those big-city towns that offer both “country and western” radio stations, airline sites now support both search by price and by schedule.

Emerging from this malaise, a set of new technologies called rich Internet applications (RIAs) offer the promise of “why click through a set of screens at all?” to meet one’s travel planning needs.

Certainly TravelClick (www.travelclick.net) deserves much kudos for being an early adopter in this space. Their iHotelier product allows independent hotels to compete with and sometimes exceed the deep pockets of major chains by delivering a “OneScreen” booking experience.

iHotelier is based upon Flash technology, as is the Epic Trip (www.epictrip.com) site. In early beta release, Epic Trip enables travelers to know what their destinations and their hotels are all about, by connecting them with videos, virtual tours, reviews and traveler experiences, in an interactive experience that goes way beyond that of most hotel Web sites. Clearly targeted at inspiring versus just selling travel, the site sparks people’s desire to discover their own “epic trip.” Other examples of Flash are AirTreks (www.airtreks.com), and LaQuinta (www.lq.com).

For non-technical folks, a good rule of thumb of whether an emerging technology is ready for prime time is when there is more than one competitor offering similar functionality or capabilities. In this case, the counterpart to Flash is Ajax. A great way to contrast these two technologies is to review the mapping features of the two largest search players (Google maps are driven by Ajax, while Yahoo! maps are Flash-based). An early travel site that took advantage of Ajax was Kayak. With their so-called ‘sliders’, consumers are able to filter search results (e.g., time of day, carrier) without requiring a page refresh back to the Web server. This technology is so ubiquitous with metasearch sites, that consumers probably perceive this as a key advantage.

A showcase for the power of Ajax to simplify travel planning is Paguna (www.paguna.com). Powered by the same team that built the mashable social travel site Plazes, Paguna fits the entire hotel booking process into a single page Ajax application. With the tagline of “simple booking,” Paguna supports search, filtering, images and tabular property information pages, in a compelling online shopping experience.

Certainly, like the churlish husband who hates shopping and wants to get back to the game on TV, gratuitous use of RIA’s could mean that consumers that “know what they want and just want to buy it” might be turned off. Similarly to the ATM, where motivational factors (i.e., show me the money) meant that we didn’t have to read a manual to overcome technology barriers, many consumers are very comfortable with the existing state of travel shopping. Technologically, there are many implementation pitfalls that need to be considered as well*.

However, one of the primary characteristics of Travel 2.0 is the customer desire to take control of travel planning and purchasing online, and this desire is becoming an increasing reality every day. Sites leveraging RIA appropriately will enjoy competitive advantage, those that don’t risk being left in the dust.

Src: Hospitality.net

Google, Orange in Talks about Google Phone

Google’s Blogger: already on Sony phones Two tech heavyweights are in talks to make the web on mobile phones – branded Google phones – as pervasive as it is on the desktop. According to the UK’s Observer, Google is in talks with Orange, the mobile phone operator owned by France Telecom, about a multibillion-dollar partnership to create a “Google phone” that comes with built-in Google software, perhaps sporting a screen the size of an iPod Video, which the two companies are betting will make surfing the web from a mobile handset much easier for Europeans. The convergence of Google’s software expertise and the experience of mobile giant Orange – a seasoned player in the mobile industry with years more experience than any of the U.S.-based telecoms – is the basis of the move. “There are numerous situations in which people say ‘I wish I had Google in my hand,’ and I can imagine the younger generation of users would think that a Google phone is a cool idea,” said Tony Cooper, a telecom consultant. “It could bring in location-based searches like ‘Find a Thai restaurant in my area.’”

Online Video Becomes a Real Business

DECEMBER 18, 2006

Welcome to the MoneyTube.

eMarketer estimates that more than one-third of the total US population ages 3 and older viewed video on the Internet at least monthly during 2006, and in three years more than half of all Americans will be part of the online video audience.

“At this point, nearly 60% of all Internet users watch video regularly, and that share will increase to over 80% by the end of 2010,” said David Hallerman, eMarketer senior analyst and the author of the new Internet Video Audience report.

There were will be 108 million US Internet video users this year, and 157 million by 2010.

But do millions of viewers constitute a market?

According to “The Video Store Goes Virtual: The Global Outlook for Online Video Sales” report from Strategy Analytics, yes, online sales of television shows, movies and other prerecorded video products will become a billion-dollar business — next year.

Although video-download sales made through iTunes and other online sources will total just $298 million this year, Strategy Analytics predicts that by the end of 2007 the online video market will grow to $1.5 billion.

“2007 will be remembered as the year in which online sales of prerecorded video finally become a real business,” said Martin Olausson of Strategy Analytics. “Just like with music, online delivery of video content is now emerging as a viable and increasingly important distribution channel for content owners.”

By 2010, the report estimates that global revenues from online video sales, rentals and subscriptions will reach $5.9 billion, and account for 8% of total home video industry revenues.

Although pay-to-own downloads account for most online video revenues today, other payment models will emerge. By 2010, Strategy Analytics projects that rentals and subscription-based services will account for about one-quarter of annual online video sales to consumers.