Wireless Promotions White Paper

Wireless Promotions:
Future vs. Fantasy

Bill Carmody
Chief Marketing Officer
Seismicom
939 Port Washington Boulevard, Suite 3
Port Washington, NY 11050
(646) 867 – 2252
bill@billcarmody.com

Table of Contents

Executive Summary ................................................................................................................................3

Background ..................................................................................................................................................5

Dispelling The Wireless Myths & Related Fantasies ..........................................................6
1.Starbucks Discount Ringing Your Mobile Phone ..............................................................................6
2. The Promise of the quot;Wireless Webquot; on your Phone........................................................................7
3. 3G High-Speed Net Access Converting Voice to Data....................................................................8
4. India, China and EU as Forecasts of U.S. Market Trends................................................................9
5. Pushing Email Offers to Wireless Phones ....................................................................................10

Top Five Hottest Promotion Trends in Wireless ....................................................................11
1. Wireless SPAM & Related Legislation..........................................................................................11
2. Pull vs. Push Promotional Messages ............................................................................................12
3. CMR vs. CRM ................................................................................................................................14
4. Wireless Offers at Retail ..............................................................................................................15
5. Enhancement of All Other Disciplines ..........................................................................................16

Leveraging Wireless Promotions For ROI Analysis ..............................................................18

Recommended Resources..................................................................................................................19

End Notes ..................................................................................................................................................20

© 2004 by Bill Carmody. All Rights Reserved.

Executive Summary

You’ve been lied to, and not for the first time. You’ve been swept into the wireless hype and are searching for a
future that doesn’t exist. You’ve heard that in the future, a person will walk by a Starbucks and their phone will go
off. The beeping from the phone will reveal a discount that the consumer can take into the store for an immediate
purchase. It’s not going to happen for a number of reasons that this white paper will explain. Nor will you be able to
“Surf the Web” from the phone the same way you do now on your computer. For that matter, you’re likely to use
the voice side of your phone much more frequently than the data side. Oh yeah, and that rumor you heard about
India, China and the European Union being an accurate forecaster of U.S. trends? Think again.

Like all myths there are elements of truth to everything stated above. The truth is, with GPS embedded in your
phone, you’ll have an enormous amount of location-based services available to you. The Web is, in fact, accessible
from your phone—it’s just not the same Web you’re used to on your laptop. Data services are on the rise, but the
use of voice is still the dominant service here in the U.S. Overseas, there are quite a number of interesting ideas
that will evolve and morph themselves into something useful in the U.S.; however, the underlying technology,
infrastructure, business interests and even societal differences will ensure different outcomes in the U.S.

Sorry to be the one to break all this to you, but someone has to do it if we ever want to realize the true wireless
promotions potential and to succeed.

So what does the future look like? It’s actually very exciting and in many ways reminiscent of the dot com era—for
good and for bad. The top futurists all see wireless technology having significant impact on the way we do business.
While there are definitely still some technical issues to be worked out, the future is very bright.

If you experienced all the pain (and hopefully profit) with respect to how the Internet changed your business,
then many of the core elements contained herein will sound somewhat familiar. At present, the central issues for
wireless promotions are no different than the central issues for the Web: Permission and Privacy. Imagine if you
had to pay ten cents for every piece of SPAM email you received in your inbox. I currently average about 100 to 200
SPAM emails per day. That translates into $10 to $20 per day, or $3,650 to $7 ,300 a year! With this example, you can
see why not only do all the same SPAM issues from email marketing apply, but why they are financially much more
critical to solve.

To smart marketers, however, this should be a no-brainer. If you abuse the trust of your customers (offline, online
or via wireless), you’re going to lose them… period. But with wireless, there are some new things to think about.

“Pull” versus “Push” for example, will force marketers to rethink the kinds of wireless strategies they employ.
,
“Push” programs follow the traditional “one to many” mass marketing noise we’ve all been trying to get past.
It’s where a marketer creates a “one size fits all” message and figures out a way to shove it down the customer’s
throats. “Pull” messages, on the other hand, are much more highly relevant to the consumer and, more to the
point, the situation in which they find themselves. A “Pull” message would be one whereby a consumer requests
the nearest retail location to where they are currently standing. Or, a request for an account balance, offer, entry, or
any other promotional tactic you can think of. The consumer initiates the request and, if the marketer has done their
homework, they can easily provide what the consumer is looking for.

3

Executive Summary

This leads us to an invaluable insight from Carat Interactive. We need to change the “CRM” to the “CMR” Forget .
“Customer Relationship Management” and start thinking in terms of the “Customer Manages the Relationship. ”
It’s not that CRM isn’t valuable. It’s definitely a step in the right direction, but to succeed in wireless promotions,
we need to be dyslexic with this acronym. We need to begin with the idea that the consumer, not the marketer, is
in the driver seat and manages the relationship. This is the reality in all marketing, but becomes painfully apparent
in wireless programs that do not follow this golden rule.

From there, we rally around the marvels of what we can currently do in the retail environment and get a sneak
peak at what’s to come. The bottom line is that the marriage of retail and wireless couldn’t be a more perfect match.
Yes, there are still some technical issues that will be worked out over time, but the reality is clear as day. Retail
programs, integrated with wireless components are here to stay.

To that end, wireless promotions should be viewed in the context of the larger marketing mix. That is, just like
any promotion that is integrated into multiple mediums and disciplines, wireless promotions are most successful
when they are integrated. More to the point, wireless promotions can enhance the other promotional marketing
disciplines such as Sponsorships, Events, Online, Retail, and Direct Response. Because of the ubiquity of the
wireless device, consumers can become more engaged and respond to the kinds of offers and promotions that
appeal to them.

Adding wireless components to your existing promotional marketing programs can further help you track Return
on Investment (ROI). This is particularly true with the drive to retail programs, but also applies to e-commerce
promotions and any promotion that leverages tracking codes as part of the response mechanism. This even works
well in the sponsorship world. AT&T Wireless, for example, was able to liquidate part of their Olympics sponsorship
by selling Olympic ring tones, screen savers and other content downloads (not to mention signing up new
subscribers via exclusive Olympic phone offers).The more the wireless phone promotion is connected to purchase
experience, the more directly you can track and analyze thepromotion’s ROI.

By the conclusion of this white paper, it should be evident that by integrating wireless marketing into your next
promotion, you will be able to quickly create (and cost effectively deliver) complementary offers that will increase
your response rates. Mobile programs will further allow you to test various offers and strategies in a timely and
cost-effective manner. As with any “first mover” promotional marketing programs, the marketers that work towards
building the future of promotional marketing programs today are likely to gain market share and a leg up against
their competitors.

Recommended resources are included so that you can have a good idea of the kinds of companies that are
currently available to promotional marketers. Each of these companies have their own thoughts about the future
of wireless promotions and are likely to be interested in answering any further questions you may have.

4

Background

What’s exciting about the future of wireless marketing in general and wireless promotions in particular is that we
are on the brink of a significant shake-up in our industry; the likes of which have not been witnessed since the
World Wide Web was introduced in the early ‘90s. Believe it or not, this is not one of the “myths” covered in this
white paper. The fact is, there are many significant reasons why this is the case. Let’s begin with an excerpt from
Paul Saffo, a director of Institute for the Future and a technology forecaster studying long-term information technology
trends and their impact on business:

The Internet and the Web have barely touched our lives. The Web arrived on the one piece of
real estate we’ve been trying to get away from for the last 20 years: our desktops. It didn’t get
any further. This is what makes wireless and broadband so important. Wireless delivers the
Internet in general and the Web in particular, to where we actually live and work and play. That
has profound implications for our life and also for the medium. The Web on wireless going to
personal appliances is not the Web as we know it. It is something else.1

According to PROMO Magazine, there were an estimated 1.3 billion mobile phone subscribers around the world, who
sent some 3.66 billion SMS messages in 2002. The number of worldwide users has nearly doubled in two years to
2.6 billion in 2004. Specifically in the U.S., there were 165 million mobile phone subscribers by June of 2004.2

Carat Interactive goes as far as to call wireless devices, “The most powerful medium yet. And points out that
”
“Wireless devices are the most powerful communication devices with respect to immediacy, interactivity and
mobility, and therefore can act as the most powerful marketing communications devices, if used appropriately. 3
”

In essence, wireless devices deliver on the true mobility that was promised by laptops. These devices are highly
personal and are kept closely within reach regardless of time of day. Wireless devices keep us in touch with the
rest of the world and allow us to quickly gain information on demand. When integrated with the Web, these same
wireless devices have the ability to deliver extremely relevant content, information, offers, and promotions. The trick
is understanding the medium well enough in order to leverage these components without abusing the trust and,
more importantly, the permission consumers must provide in order to participate in wireless promotions.

In order to accomplish successful wireless promotions, the record must be set straight so that there is far less
confusion about what’s to come in the wireless future versus the myths and fantasies that are likely to steer
promotional programs in the wrong direction.

5

Dispelling The Wireless Myths & Fantasies

There have been entire volumes written on how myths get started and then blur the lines with the true facts that
surround the myths. Many of these authors have concluded that within all myths there are elements of truth. This
is no different when it comes to examining the fabrications that surround the wireless promotions industry.

Starbucks Discount Ringing Your Mobile Phone
Perhaps the best myth example is the one about how walking a short distance from a Starbucks would trigger an
automatic SMS text message to be sent to your phone offering you discount on their coffee. Carat Interactive does
a fabulous job dispelling this myth:

This will never be practiced for the following reasons:

1. Starbucks would never attempt this annoying tactic, as it would receive tremendous customer
backlash such that would not be outweighed by increased sales from the promotion.

2. In the same vein, Starbucks is an established brand and will not risk tarnishing itself with such
a controversial effort. They will, on the other hand, invest in a locator device that will allow
customers to locate (pull) the nearest retail shop through a locator database, ultimately
leveraging location-based technology.

3. In the event that any user wanted this “service” they would opt-in by signing up with the coffee
,
shop or a provider such as Vindigo. By definition, these subscribers would be some of your
best customers (probably most profitable), so Starbucks would have little need to offer them a
discount—these customers are Starbucks regulars and will react to media such as signage.

4. Based upon the fact that there are thousands of Starbucks retail outlets nationwide, ones
wireless device would be in constant notification mode when a user was driving through any
major metropolis. Again, this is the roll of signage.

[Instead] Starbucks… will invest in a service to allow their customers to locate the nearest outlet,
and have already announced the ability to take pre-orders from wireless devices. Use of pull
marketing will allow users to determine when they are interested in interacting with the coffee
chain on their terms.4

And, should Starbucks attempt such a “push” marketing tactic without getting the permission of the casual user
walking down the street, they would not only face incredible consumer backlash (because of the wireless SPAM
issue), but legal liability as well. The CAN-SPAM Act of 2003 went into effect on January 1, 2004 and incorporated
many of the components originally outlined in the Wireless Telephone Spam Protection Act of 2001.

Specifically, section 14 of the CAN-SPAM Act requires the FCC, in consultation with the FTC, to promulgate rules
to protect consumers from unwanted “mobile service commercial messages. (The Act defines “mobile service
”
commercial message” as a “commercial electronic mail message that is transmitted directly to a wireless device
that is utilized by a subscriber of commercial mobile service… in connection with such service. )5
”

6


The truth is, with GPS embedded in your phone, you’ll have an enormous amount of location-based services
available to you. Perhaps you’ve heard of “Flash Mobs?” This is when an email or text message is sent to a
pre-registered group of individuals telling them a specific place to meet at a specific time to do a specific task…
just for fun. The example I use is imagine if you joined a group of 500 people that were notified to go to New York’s
Central Park at exactly 2:15pm on Saturday and play the city’s largest game of “Duck, Duck, Goose. Believe it or
”
not, these things are happening right now.

Enter enhanced wireless applications such as “Dodgeball” and “SpotMeeting” Hollywood executives might describe
.
Dodgeball as “Friendster goes wireless. It takes the incredibly hot social network aspects of Friendster and adds
”
the all important ingredient of location and “on demand” meetings. In Dodgeball, members can send messages to
their pre-registered friends (and even friends of their friends) simply by sending a time and a location. “Roy’s
Restaurant at 6:00 p.m. would locate any friends within a 10-block radius and alert them with a message such as,
”
“Bill is at Roy’s Restaurant. You know him through Kathleen. 6 ”

“We call it a location-based service” says Dennis Crowly, creator of New York City-based Dodgeball in a recent inter-
,
view in Event Marketer Magazine. The article went on to say:

Already the wired crowd is referring to the service as MoSoSo (mobile social software). User phones
or PDAs must be less than two years old and GPS-enabled. If available, senders can also attach pictures
to Dodgeball alerts so recipients can see photos (or in your case, perhaps a logo) of who’s pinging them.
Users set options when they register as to whether others can blindly contact them or if they must be
on the sender’s buddy list to receive pings…

Privacy is not an issue, as Dodgeball doesn’t collect or disseminate last names. The service is currently
available in Atlanta, Austin, Boston, Chicago, Dallas/Fort Worth, Denver, Los Angeles, Miami, New York,
Philadelphia, Portland, San Diego, San Francisco, Seattle, and Washington, DC.7

SpotMeeting is similar to Dodgeball, but focuses more on the dating scene. SpotMeeting CEO Chester Yeum
explains, “SpotMeeting is a revolutionary service for singles that lets them find a date instantly, and usually within
walking distance. Other available online dating sites are limited in their reach because they are missing the key
ingredient—location. Many of these wireless-dating services (including Match.com) even include pictures of the
”
potential person so the impromptu blind date…well, isn’t.8

So while the Starbucks myth is worth avoiding, it’s clear that the underlying principle of location-based, contextual
promotions is quite appealing. Assuming, that is, that the consumer initiates the action or request and that the
response is relevant and meaningful. Mass marketing is dead. Long live permission-based, relevant marketing.

The Promise of the “Wireless Web” on Your Phone
Will your phone have access to the Web? Absolutely. Will it simply be the same content only served via wireless?
Not a chance. This is a huge misconception, and one that needs to be corrected. As stated earlier in the background
section, the Web via wireless devices is not the Web as we know it. It can’t be for the following reasons:

1. Screen Size – Even with the PDA hybrid phones, you’re still looking at the web through a much smaller
screen and in most cases with much lower resolution. Large images from the Web become impossible
to see through such a small screen. The original Web simply wasn’t designed with smaller hand-held
devices in mind.

7


2. Bandwidth – Dial-up for your home computer was bad enough, but now trying to download large
amounts of data from the Web onto your phone is miserable. As more and more people get DSL or
Cable Modems for their homes, they won’t tolerate these incredibly slow speeds for downloading
content onto their phones.

3. Not a Laptop… Yet – The phone, while looking more and more like a powerful computer in the palm
of your hand, still has a ways to go before it has the processing power of today’s computer. Lower
processing power means slower data transfers and a slower overall Web experience.

4. Serves a Different Purpose – Most people are not doing research from their phones. People want the
headlines instead of the whole story. They want their account balances from their banks, but not to do
complete online banking (at least at the present time). The phone gives you immediate and relevant
information, but the “deep dives” are still going to come from the computer be it work or home.

Let me be clear that the Web on your wireless phone doesn’t suck. I am by no means disparaging the fact that
you can get Web access from your phone. In fact the screen resolution has improved dramatically, as has the
overall experience since launch.

What I am saying is that there is a separate version of the Web that has been created specifically for the mobile
phone (and other wireless devices) and is in a constant state of evolution. This mobile Web is much less graphic
(and copy) intense. It allows you to get the stock quotes of the companies you’re interested in and the sports
scores of your favorite teams. You can go deeper into the content, but the top-level has been specifically designed
to provide you with the highlights of what you need… quickly.

The mobile Web will continue to evolve to meet the needs of advances in technology. Next generation phones
already support a mobile version of Java and there are many rich applications that allow phones to play MP3 music
files and even record video. Eventually, the mobile Web may feel similar to today’s PC-based Web, but we have a
long way to go and need will ultimately drive what the mobile Web becomes.

3G High-Speed Net Access Converting Voice to Data
At the beginning of the new millennium, businesses were convinced that the next stage of wireless was 3G (or
third generation high-speed Internet access technology). It was all the rage in Europe and Asia, and the U.S. was
seen as “behind” the curve when it came to the data side of phone applications. The promise was intoxicating
(not unlike the dot com era), and wireless carriers truly believed that the voice calling side of the wireless business
would quickly give way to the data side.

This had all sorts of promise for wireless marketers. If consumers used their wireless phones primarily for data
applications versus voice, it would significantly change the dynamics of how the businesses communicated with
their customers.

Just as the economy was cooling down, the wireless carriers decided to focus on increasing the quality of their
service and instead of focusing on 3G, they refined their “2.5G” technology such as GPRS. And while the data side
of the wireless business provides incremental revenue for the wireless carriers, voice still to this day dominates the
wireless phone market.

8


This doesn’t mean that data applications aren’t valuable or important. It’s just a misnomer that the data side of
wireless phones would quickly out-pace the use of voice calling on the phones.

When asked about the future of the wireless phone applications, David Steinberg, CEO of InPhonic stated that,
“Today, email and instant messaging are the premier data applications poised to move the wireless market.
Integrating such widely accepted “wired” applications allows users to make a comfortable, natural progression
toward accessing data services wirelessly. 9
”

This is the “horseless carriage” approach used to introduce automobiles. That is, when the first cars where
introduced, they were more widely accepted when they were explained as and referred to what was known at
the time: a horse and buggy. The wireless data application equivalent is email and instant messaging. Once
people understand that they can use the same applications on their phone, their comfort level with using
data applications will increase as will their usage.

However, it’s clearly not 3G that’s the magic bullet. Instead, the U.S. has seen WiFi technology take off, filling the initial
void that 3G has filled in Europe and Asia. Given that WiFi is not regulated by the government the same way that 3G
would be, it’s likely that WiFi will continue to flourish in the U.S.—possibly to a point where 3G will not make financial
sense to the phone companies who would be required to purchase expensive licenses from the government.

It’s unclear at this point which technology will eventually allow high-speed Internet access for wireless phones, but
it is clear that (at least in the U.S.), it’s going to take some time before the data services of the phone out pace the
voice calling services.

India, China and EU as Forecasts of U.S. Market Trends
Of all the myths with respect to wireless marketing and promotions, this one is the most understandable and, to
some extent, excusable. There is no question that India, China and the EU are far ahead of the U.S. in terms of the
number of wireless phones as well as the application usage of these phones. Because of the leadership position of
these countries in the wireless space, it’s understandable why so many companies used these growth markets as
future (predictive) models for the U.S. market.

However, the mistakes are associated with the very distinct technological as well as sociological differences. To
understand the absolute boom of the wireless market in these countries, as well as their corresponding adoption
of various technologies, you must first understand the significant differences to the U.S. market:

1. Lack of Legacy Infrastructure – In the U.S., the penetration of the “wired” or landline telephone is
estimated to be 90% or greater. That is, the vast majority of people who want a telephone in their
homes have one. This is nowhere near the same situation in China or India. In these countries, the vast
majority of the population have limited to no access to a “wired” phone, so the wireless phone is their
first phone.

In Europe, the “wired” phone challenges for credit card authorization and verification at retail were so bad
that out of necessity, applications such as smart cards and RFID devices were launched much earlier than
in the U.S. That is, merchants demanded faster and more reliable means of getting credit card authoriza-
tions than using dial-up phone lines. This is why smart cards (i.e. chips embedded onto credit cards) were
embraced much earlier than in the U.S. and to this day are much more successful in Europe.

9


2. Wireless Phone as Primary Device – In India and China, much of the population sees the wireless
phone as their primary device to “stay connected. In these countries the wireless phone is the primary
”
device being used to access data and receive direct response information from marketers.

3. 3G is a Reality – Unlike the U.S., China and much of Europe already has the third generation wireless
phone technology, which allows high-speed Internet connections for wireless devices.

4. Caller Pays – Here a novel idea: What if the person making the call or sending the text message is the
only one paying for the call or message? That’s how it is overseas, but in the U.S., both parties pay. This
added expense must be taken into account when marketing programs are conceived.

5. Compatible Networks – Do you remember when you needed an AOL account to speak to people on
AOL and another account from Prodigy to speak to them? If this was before your time, then just think
Instant Message. Your AOL screen name can’t talk to Yahoo! or MSN. In many respects, this is how it
is in the U.S. between carriers. Overseas, they have agreed upon standards and no difficulty deploying
applications across carriers. Not true in the U.S.

6. Social and Cultural Differences – While the world is getting smaller by the year, there are still very
distinct social and cultural differences that do not transfer to the U.S. The way in which the wireless
phones are used by their nature is an extension of these social and cultural differences.

For these reasons, assumptions must be challenged when looking at forecasts from these countries and comparing
them to the U.S. market. The issue is not necessarily that the ideas from these countries won’t work in the U.S.; it’s
just that these ideas must be filtered through the technological and cultural differences to ensure assumptions are
correct. Assuming that because 3G was popular in China and Europe it would be the same in the U.S. was clearly
false—at least in the timeframes being considered. The same goes for the use of the data side of the wireless phone.
It’s not that we won’t eventually come to a similar place, but we have a number of steps before we get there.

Pushing Email Offers to Wireless Phones
In some respects, this myth is a subset of the previous one. The good news about the previous myth is that it also
explains why today’s SPAMers can’t push their SPAM onto your wireless phone. The idea that you can deploy email
marketing campaigns to all of your wireless customers is false; at least not with the serious help of a wireless
aggregator and, in most cases, the approval of various wireless carriers.

The reason is that in the U.S., the wireless carriers are operating in what is referred to as a “closed network. ”
That is, each carrier has the ability to control what’s happening inside their network. In a recent Wall Street Journal
article, Jeffrey Nelson, a spokesman for Verizon Wireless put it this way, “Once something is knocking at the door
of our network, we can let it in or not. On the landline, the messages just travel. There isn’t a gate, if you will. 10
”

The article went on to describe how carriers can impose SMS message volume limits, which help weed out
SPAMers. That is, until the networks are no longer closed, and then we face the exact same issues as our
overseas colleagues.

10

Top Five Hottest Promotion Trends in Wireless

As 2004 winds down, there have been a number of advancements in wireless technology, legal legislation and the
overall approach to leveraging wireless promotions in the overall marketing mix. In this section, the focus is on the
macro trends—that is, the broad, sweeping trends—that directly affect the kinds of wireless promotions that are
driving the promotions industry.

These top trends are the ones that promotional marketers need to be aware of in order to be able to launch and
manage wireless promotions effectively.

Wireless SPAM & Related Legislation
When comparing one of the hottest trends in wireless promotion to the Internet, the issue of Permission and
Privacy will sound quite familiar; however, there is a brand new financial twist that makes Wireless SPAM a much
more serious issue.

Imagine if you had to pay ten cents for every piece of SPAM email you received in your inbox. I currently average
about 100 to 200 SPAM emails per day. That translates into $10 to $20 per day, or $3,650 to $7,300 a year! With this
example, you can see why not only do all the same SPAM issues from email marketing apply, but why they
are financially much more critical to solve.

In October of 2002, an iBrief aptly titled, “The Future of Wireless SPAM” was released from Duke Law & Technology
,
Review that illustrated just how bad the wireless SPAM issues were in Japan:

It is estimated that of the 950 million emails exchanged daily in Japan, 84 percent are sent out at
random. At a cost to DoCoMo [Japan’s largest cellular provider] of over $200 million, both the
company and the industry need a solution.

Japanese Parliament enacted two anit-spam bills in April 2002. On July 1, cellular consumers and
providers in Japan may have found a lasting solution when the two new laws regulating wireless
commercial solicitations—cell phone spam—came into effect… It provides cellular users with an
opt-out option, requiring senders of email ads to attach messages telling receivers how to reject
future ads.11

Similarly to Japan, the European Union’s Parliament passed the Directive for the Protection of Personal Data and
Privacy in the E-communications Sector. However, unlike Japan’s bill, the EU adopted an opt-in approach as part of
their legislation. That is, marketers must get permission to send advertisements before they send them, whereas in
Japan marketers are not required to get permission ahead of sending messages just as long as they honor requests
to be removed from future communications.

In the U.S., the problem of wireless SPAM is not nearly as great… so far. The Duke article explained the issue
this way:

Cell phone spam [in the U.S.] is hindered by the same limits in technology, in particular the differ-
ent technology standards, which have rendered American cell phones antiquated as compared to
phones in Asia and Japan. Unlike the United States, Japanese and European carriers, as required
by their governments, have adopted uniform technology standards.12

11


As stated earlier in the “Pushing Email Offers to Wireless Phones” section, the reason is that in the U.S., the
wireless carriers are operating in what is referred to as a “closed network. That is, each carrier has the ability to
”
control what’s happening inside their network. In a recent Wall Street Journal article, Jeffrey Nelson, a spokesman
for Verizon Wireless put it this way: “Once something is knocking at the door of our network, we can let it in or not.
On the landline, the messages just travel. There isn’t a gate, if you will. 13
”

The article went on to describe how carriers can impose SMS message volume limits, which help weed out
SPAMers. That is, until the networks are no longer closed, and then we face the exact same issues as our
overseas colleagues.

“Every campaign in the U.S. is opt-out enabled” says Paul Cushman, Director of Business Development at m-Qube.
,
“Being a late adopter has enabled the U.S. to learn from the mistakes of others and create policies that solve these
problems in advance. For example, blanket opt out is part of the Code of Conduct of the Mobile Marketing
Association. Mr. Cushman went on to explain that the process of setting up short codes has built in anti-SPAM pro-
”
tection as well. “The Common Short Code process and the extablishment of aggregators by the carriers to ensure
that they have visibility and approval of campaigns before they go live. 14
”

Fortunately for consumers and marketers alike, the CAN-SPAM Act of 2003 went into effect on January 1, 2004
and incorporated many of the components originally outlined in the Wireless Telephone Spam Protection Act
of 2001.

Specifically, section 14 of the CAN-SPAM Act requires the FCC, in consultation with the FTC, to promulgate rules
to protect consumers from unwanted “mobile service commercial messages. (The Act defines “mobile service
”
commercial message” as a “commercial electronic mail message that is transmitted directly to a wireless device
that is utilized by a subscriber of commercial mobile service…in connection with such service. )15
”

Smart promotional marketers should not need this kind of legislation to understand that unsolicited messages—be
they SMS text or email—are not welcomed by their consumers. Without getting the express and explicit permission
of consumers, wireless promotions are doomed to fail. Moreover, because of the cost implications, consumer
advocacy groups are likely to ensure that unwanted wireless SPAM will not go unnoticed—this means negative
publicity at the very least and could include significant fines and a class action lawsuit.

The underlying message here is: think twice before sending out messages to your consumer’s wireless phone.
Which brings us to the next wireless promotion trend.

Pull vs. Push Promotional Messages
Mass media is dead. Proctor & Gamble was the first to say this publicly, and most recently Larry Light, Global
Chief Marketing Officer of McDonald’s made this proclamation at the AdWatch: Outlook 2004 conference and was
featured on the front-page article in Ad Age on June 21, 2004. Fortune 500 companies are no longer satisfied with
the declining returns of mass media, nor the antiquated systems used to track, report, and analyze their marketing
and media spend.

12


Think of Push marketing as outbound marketing (company pushing messages to consumers), while Pull marketing
is inbound (consumers requesting information from the company). Push messages are defined as a single, mass-
marketing message that is intended to interrupt consumers from what they were intending to do and deliver a
marketing message. Pull marketing, by contract, is defined as contextual, need-based messages that are delivered
to consumers only when they are requested.

In the early days of television, Push marketing made the most logical sense. In television and radio, it’s the 15, 30,
or 60-second spots that interrupts consumers from the program they were watching or listening. The objective of
Push marketing is to literally interrupt consumers from what they were intending to do and push out an advertising
message to convince them to buy a company’s product or service. Push marketing will never go away completely,
however, because of the significant volume of noise that is currently out in the marketplace, the trend is for the
target audience to ignore these messages.

Pull marketing takes a different approach. Pull marketing anticipates the interests, needs and desires of targeted
consumers and crafts marketing messages and offers that are likely to appeal to consumers who take the time to
request the information. An example of Pull marketing is a consumer’s ability to go online or call an 800 number to
check the balance of their checking account or the status of their airplane flight, or to get a recipe for dinner. The
company’s marketing messages are integrated into the specific needs of their consumers.

Perhaps the easiest distinction between Push versus Pull marketing messages are in the context of online
advertising. An example of Push marketing would be the standard banner advertising that attempts to divert you
from what you planned on doing online to what the marketer would like you to do.

An example of Pull marketing would be paid search results on Google or Overature that are contextual marketing
messages to the very thing about which you went online to find out more information. Rather than trying to
interrupt, Pull marketing is contextual to what the consumer is already interested in doing and offers and easy
way to provide a solution to their problem.

In the wireless world, this issue becomes of prime importance. Push messages in the context of wireless would be
things like wireless alerts, SMS message announcements, and outbound telemarketing. As it currently stands in the
U.S., consumers bear the cost of these potentially unwanted messages. As a result, consumers are unlikely to put
up with paying for Push marketing that interrupts them from what they were doing.

By definition, consumers will welcome pull messages. This is because they only receive the marketing messages
they specifically request. “Would you like to know if your plane is running late? Then send a SMS text message to
XXXXX and we’ll notify you of any delays. United Airlines has already started this program and the consumers who
”
sign up for these alerts swear by them. What better way to reinforce brand loyalty than by letting your passengers
know well in advance that there’s likely to be a delay?

Banks can reduce the number of calls they receive by allowing you to text in your account number and get back the
balance. The same goes for your credit card company. CPG companies can use text messaging to offer discounts on
future purchases. “Want to get a coupon off your next purchase? Send a text message to XXXXXX and we’ll send
you the discount.
”

The idea is that companies can use their existing product packaging, bill statements, and other assets that are
already widely accepted by their customers to build loyalty and future purchase behavior. If new customers are
needed, pass along offers can be developed so the core audience can provide offers of real value to their friends.

13


Word of mouth has always been a powerful component of marketing. The challenge has been how to encourage,
track and measure this aspect. In the online world this challenge was initially solved through tell-a-friend email
components, and then evolved further into affiliate marketing, incentives and rewards programs. The same will
hold true to wireless marketing given that the offers are compelling and worth talking about.

The bottom line is that Push marketing messages will be fought by your customers because they have to pay for
them. Pull marketing messages, however, can create a much more intimate, loyal, and “on demand” relationship
with your customers. Just as in the online world, your customers must always be in control of the relationship, and
this brings us to the next section.

CMR vs. CRM
From the beginning of the wireless marketing revolution, there has continued to be the debate over, “Who owns
the customer?” Do the service carriers such as AT&T Wireless, Cingular, T-Mobile, Nextel, Sprint, and Verizon own
the customer? Or do the hand set manufactures such as Ericsson, Palm, Motorola, Nokia, Samsung, and Sony
own the customer? Or could it be the content partners such as AOL Time Warner that own the customer just on
a different device?

The answer should be obvious: None of the above! If you truly believe in permission marketing, then you should
know that it is the customer him or herself, not any particular company, that owns the relationship. At any point, the
customer can opt-out of the relationship and start fresh with a competitor. The customer has choice and in this day
and age, they will exercise their options to find a solution that works best for them.

This leads us to an invaluable insight from Carat Interactive. We need to change the “CRM” to the “CMR” Forget .
“Customer Relationship Management” and start thinking in terms of the “Customer Manages the Relationship. 16 ”
It’s not that CRM isn’t valuable. It’s definitely a step in the right direction, but to succeed in wireless promotions,
we need to be dyslexic with this acronym. We need to begin with the idea that the consumer, not the company,
is in the driver seat and manages the relationship. This is the reality in all marketing, but becomes painfully apparent
in wireless programs that do not follow this golden rule.

With most of your customers having a wireless phone with them wherever they go, CMR becomes a very intriguing
idea. Consumers have the ability to let you know what they want, when they want it, and even where they want it.
They are always “on” with their wireless devices and so this can be the ultimate tool for cultivating the relationship.
The key is to have the right people and systems in place to allow for a two-way communications medium (not just
the Push, mass-marketing messages).

“Amazon.com created a very good business using purchase behavior, emails and recommendations to increase
repeat traffic and increase sale frequency and amount” noted Paul Cushman, Director of New Business at m-Qube.
,
“Without mobile, this would be nearly impossible to do in the retail world. However, with mobile devices, retailers
can fill this gap, enabling them to take advantage of the successful online strategies in the real world. For more on
”
how this is done, we move to the next section.

14


Wireless Offers at Retail
So far we’ve reviewed the issues with wireless SPAM, identified the types of messages to be utilized (i.e. Pull vs.
Push), and identified the fact that the consumer needs to be in control of the relationship (i.e. CMR). Now it’s time
to take a look at how all these components come together in the retail environment and get a sneak peak at what’s
to come.

Today, there are several companies that are already testing the use of wireless phones at retail. In September of
2002, m-Qube pioneered mobile couponing in the U.S. and has since formed a relationship with NCR. m-Qube in
partnership with NCR, allows marketers to deliver custom coupons to consumers’ wireless phones via existing
retailer loyalty platforms. m-Qube has run successful pilot programs already at the Cambridge-Side Galleria in
Boston, with retailers and QSRs such as Gap, J Crew, Guess, Steve Madden, Borders, Dunkin’ Donuts, and Taco
Bell all participating.

Paul Cushman, Director of Business Development at m-Qube explains that, “This gives us the capability to provide
an individually coded and trackable coupon to a mobile device that can be redeemed by showing the phone at the
POS, where the clerk enters the code and we then track results from the back end. Mr. Cushman predicts that
”
“2005 will be the break out year for couponing” and eluded to a nationwide program for the 2005 holiday timeframe
which he believes could well be the largest Mobile Marketing program the industry has seen to date.

The key is that companies such as NCR see the power (and the future) of wireless marketing and promotions. By
having NCR integrate unique codes into the existing back-end infrastructure, companies such as m-Qube can deliver
unique codes to individuals who send a request via text message. It is then up to the manufacturer if that unique
code will be allowed to be forwarded to friends or not.

For example, let’s say that you want to move more pairs of jeans at the Gap. You decide that, as part of a Back to
School program, you’re offering a free pair of jeans with every $50 purchase at the Gap. You purchase billboards in
the downtown Boston area and tell people that to get this offer, they need to text “Jeans” to XXXXXX short code.
Consumers who send the text message get back the offer details with their own unique code.

Now, if you want to control the redemption of this offer, you can make it such that the unique code is only valid for
the single purchase. However, if you’re trying to get as many people as possible to come to the store and shop, you
can allow consumers to send this electronic offer to their friends.

The beauty of having this electronic offer is all of the detailed reporting to which you now have access. Knowing the
estimated number of impressions from the billboard, you can determine the opt-in rate based on the number of
people who request the offer. You can further measure the redemption rate based on the number of people who
redeem the offer. If you’re measuring pass-along value, you can further measure the number of friends that were
forwarded this offer and redeemed. And while this is the most popular scenario at present, there are others as well.

DRM Labs has an interesting solution using your credit card to redeem the offer on the backend, rather than an
offer code in store at the checkout counter. In their version, you request that offers be delivered via text message
and register your credit card number with the wireless carrier. After the offer is delivered to the mobile phone,
rather than showing your phone with the unique code to the retailer, you simply shop the way you normally do,
using your pre-designated credit card. You pay full price at the retailer, but after you make the purchase, you receive
a text message confirming that you received the discount on the backend. That is, your credit card statement specif-
ically identifies the full purchase amount at the retailer, and then credits you the discounted amount … right on your
credit card statement. “There are advantages to this solution, according to Jeff Mankoff, President of DRM Labs,
”
“There are no retailer software and hardware POS integration costs and redeeming with a credit card is consistent

15


with how consumer’s shop today. By redeeming a mobile coupon with a credit card versus a mobile phone display,
we eliminate consumer and sales clerk fraud. Also, the DRM Labs model is wireless carrier centric, in that the cus-
tomer opts in and registers at the carrier. And it is the carrier (not the advertiser) that delivers the offers. Thus, the
carrier acts as the gatekeeper and avoids any appearance of Spam to the mobile phone. ”

While the technologies supporting these efforts will evolve over time, the bottom line is that the marriage of retail
and wireless couldn’t be a more perfect match. Yes, there are and will be some technical issues that will be worked
out over time, but the reality is clear as day. Wireless integrated with retail programs are here to stay.

Enhancement of All Other Disciplines
The connection between wireless phones and retail is by far the most exciting to those of us in sales promotion.
At the end of the day, ROI is measured by the number of products sold as a direct result of our efforts. With
wireless promotions, the same ROI capabilities from the online world are brought down to the mobile phone level,
and this should be very exciting for promotional marketers.

Driving sales at retail, however, is not the exclusive objective of every promotional marketer. This section identifies
some of the other exciting tools that can now be leveraged using consumer’s wireless phones.

It should be noted here that wireless promotions by themselves are unlikely to shatter any marketing or sales
objectives. As with any promotional marketing program, integration is essential. The better you integrate your
wireless marketing efforts into the overall marketing mix, the better your results.

1. Activating Sponsorships: For marketers who are looking to find creative ways to extend the life
of their events and make their sponsorships pay, wireless promotions offer up some very unique
advantages including: (A) Photo Blogging, (B) Fan Polling / Voting, (C) Distribution of Electronic Offers,
(D) Lead Generation, and (E) Content Purchases.

A. Photo Blogging: This is an ingenious way to allow consumers to take their photo-enabled wireless
phones and tell their story at your events. By allowing your consumers to post their pictures from
your event, you not only give these consumers a reason to go back to your website, but also create
buzz and excitement at the event. If the event is hitting more than one market, photo blogging will
give the up and coming markets a sneak preview of what’s to come.

B. Fan Polling / Voting: Want to make your sponsorship more interactive and provide real-time feed-
back to your company? Fan polling allows consumers to tell you how they feel—what they like,
dislike, and things they’d like to see in the future. Voting allows them to participate and have a say
in the course of the events. Start thinking of wireless phones as mini polling pads that people carry
with them at all times. Make it fun and provide real-time feedback and they’ll be hooked.

C. Distribution of Electronic Offers: Got a product or service to sell at the event, but need more
time? Peak your consumer’s interest and have them text you for the details. Your electronic coupon
can send people back to a website or simply to the closest participating retail outlet to continue the
sales process.

D. Lead Generation: Truly a no-brainer. Provide something of value and consumers will gladly let you
know if they’re interested or not. The more you’re willing to offer up, the more leads you can pull
down from these events. Make your offers relevant to the sponsorship at the event and consumers
will be in the right frame of mind to take action—right there on the spot with their wireless phones.

16


E. Content Purchases: For the lead sponsors, liquidating the sponsorship should be as easy as
getting the online and wireless rights to sell meaningful content at the event and after the event
has concluded. From ring tones to games to wallpaper to other wireless content, leverage the
asset you’ve purchased and reap the rewards wirelessly. AT&T Wireless, for example, was able
to liquidate part of their Olympics sponsorship by selling Olympic ring tones, screen savers and
other content downloads (not to mention signing up new subscribers via exclusive Olympic
phone offers). Samsung was likewise able to liquidate part of its Warped Tour sponsorship by
securing the digital wireless rights to downloadable music, ring tones, screen savers, games, and
other content.

2. Extending Events: With all of the above examples, it should be clear that there are many ways to
extend the life of your events using a combination of wireless and online technology. From photo
blogging to exclusive offers, it should be easy to think of interesting ways to move people from the
event to your website and/or retail location and continue to sales cycle.

3. Driving Online to Offline: The reverse is also true. Creating an appealing online experience will help
motivate your consumers to go offline—be it to your events or retail promotions. If your event is
newsworthy, you can use wireless alerts to keep people posted on the most current information.
Sign up online and receive updates wirelessly.

4. New Direct Response Vehicle: There will most likely be a long-term future with Business Reply Cards
(BRCs). That said, think of the ability to send text messages as a new direct response vehicle in new
advertising locations. With a SMS short code, why not make your billboards a direct response vehicle.
Or, for that matter, your radio (or to a lesser extend, your television) ads? With wireless, consumers are
always on. If you keep the offer compelling and the message simple, you can drive response from
media you previously never thought possible. The direct marketing companies should be thrilled with
this advancement in technology.

5. Interactive Merchandise: “Take One” now becomes “Text for One” I’m not suggesting that paper goes
.
away entirely, just that there’s an easier way to “take it with you” that doesn’t leave unwanted clutter.
POS at retail is looking to drive purchase, but sometimes consumers need some time to think things
over. When that happens, wireless provides an interesting way to send the message.

6. Real-Time Loyalty: This can literally mean anything you want it to. From the most traditional “frequent
flyer mileage” programs getting a wireless facelift with real-time access to account balances to brand
new and exciting ways to track and reward loyalty. Think “digital punch cards” where the phone acts as
card. However you define loyalty, chances are there are several ways to enhance customer loyalty with
wireless technology. From faster access to information to rewards requests, there are many ways to
go here.

7. Enhancement of Collect & Win Games: For McDonald’s why not run “Wireless Monopoly” where all ,
the game pieces are specially coded and playable via a wireless phone? The codes already exist, so it
really comes down to creating a digital game board to store the game pieces. To that end, many of the
instant win prizes could be digital content such as ring tones, MP3 music files, games, etc.

The bottom line is that just like online promotions enhanced all of the traditional promotional marking disciplines,so
too will wireless promotions. They are not the “end-all-be-all” to promotional marketing, but they do provide some
very unique ways for consumers to participate and for marketers to track real-time results.

The next time you’re thinking about designing a promotional marketing program, ask yourself, “How could I add a
wireless marketing component?” You’ll be surprised how quickly and easily it will come to you. And if you’re still
struggling, send an email to bill@billcarmody.com and I’ll help you brainstorm.

17

Leveraging Wireless Promos for ROI Analysis

Return on Investment (ROI) in theory is incredibly simple, but in practice can be challenging if you can’t isolate the
right information. Many companies have relied on the lift in sales data to provide the key market indicator as to the
success (or failure) of a promotion. The challenge with this approach is that often times marketers have multiple
programs working to stimulate demand. How do you know if it’s actually the promotion that’s ringing the cash
register or something else?

Wireless promotions may not completely solve this problem, but when used correctly they can certainly take the
proper steps in the right direction. The wireless promotions dimension takes all the valuable insights learned from
the online space and adds the missing component of mobility. That is, marketers could track how their online
programs were doing, but it wasn’t always practical to assume that the target audience had access to a laptop
while: (A) Watching TV, (B) Listening to the radio, (C) Reading a magazine, (D) Viewing a billboard, etc.

With wireless promotions, we can now take the next step. We can keep all of the measurement tools developed in
the online world and apply them to the “real world. The same electronic coupon that was delivered via email can
”
now be delivered to a wireless phone. The difference is, getting this coupon “on demand” in the “real world” means
a higher likelihood of redemption. Why? Because the request for the offer can be made in route or even at the retail
store location.

Promotions, especially online promotions, have often been used as the glue that holds multiple mediums together.
With a central offer, the same message can be delivered across all media and drive back to retail, online, the phone
or to the mail. What the wireless factor does is make it incredibly easy to track response that happens via any
and all of these components. Having separate short codes that extend the same offer is the equivalent to having
separate URLs that track where consumers came from. The difference is that they no longer have to be near a
computer or go online to participate.

Measuring ROI effectively means tracking all of the right components of the promotion to ensure that the campaign
was run as effectively as possible and provided a positive rate of return. Wireless promotions are not a “magic
bullet” but they do provide us with new and interesting ways to oversee the progress of a promotion. With each
,
message sent, each request, and each coupon redeemed, marketers are getting much more real-time information
and have the ability to make the necessary adjustments to ensure success.

18

Recommended Resources

There are a number of players out there in the mobile marketing space, and all great people I might add. Below is a
list of resources that I have pulled together from past wireless promotion programs. While this list is by no means
comprehensive, it’s a really good place to start. As always, if you have any questions, please send an email to
bill@billcarmody.com.

• AT&T Wireless (Wireless Carrier Partner) Ted Mandelkorn, Consumer Promotions, SMS Offer Portfolio,
(425) 580-5607 ted.mandelkorn@attws.com
,

• Carat Interactive (Wireless Media / Advertising) Chris Arnes, (415) 227-2122, Chris.Arens@carat.com

• Cingular (Wireless Carrier Partner) Dave Garver, (404) 236-6000, dave.graver@cingular.com

• DRM Labs (Wireless Coupon Provider) Jeff Mankoff, (214) 891-1800, jmankoff@drmlabs.com

• InfoSpace Mobile (Wireless Content & Technology) Tony Wootton, (310) 481-6941,
tony.wootton@infospace.com

• Loeb & Loeb (Wireless Legal) Ken Florin, (212) 407- 4966, kflorin@loeb.com

• Mobliss (Wireless Content & Technology) Brent Brookler (206) 332-1749, brent@mobliss.com

• m-Qube (Mobile Marketing & Content Provider) Paul Cushman, Director of Business Development,
(650) 234-8210, pcushman@m-Qube.com

• Navio (Wireless Content & Technology) Ron Martinez, Chief Product Officer, (408) 864-7979 ext. 123,
ron@navio.com

• Proteus (Backend Wireless Technology Provider) Craig Shapiro, (415) 773-1475, craig@proteus.com

• Samsung (Handset Manufacturer) T. J. Person, Business Development Manager, Wireless Terminals,
(972) 761-7255, t.person@samsung.com

• SanDisk (Flash Memory Partner) Dave Smurthwaite, Mobile Product Marketing Manger, (408) 548-0183,
dsmurthwaite@sandisk.com

• Seismicom (Brand Promotions Agency) Bill Carmody, Chief Marketing Officer, (415) 864-4000 ext. 103,
bill@seismicom.com

19

End Notes

Paul Saffo, “New Fronts in the Communications Revolution” included in the book, What’s Next: Exploring The New
1

Terrain for Business by Eamonn Kelly, Peter Leyden, and Members of the Global Business Network, Perseus
Publishing, September 2002, page 170.
Kathleen M. Joyce, “Missing the Medium” in PROMO Magazine, August 2004, page 37.
2

Carat Interactive, “The Future of Wireless Marketing” White Paper, 2002, page 4.
3

Ibid, page 7.
4

Ken Florin of Loeb & Loeb in an email dated September 20, 2004.
5

Colin Gibbs, “Clubbing, SMS Style: From Virtual Girlfriends to Real Ones, Mobility Adds Social Twists” in
6

RCR Wireless News, September 6, 2004, page 32.
Dan Hanover, “Palm Pilots: Dodgeball makes promoting events with email blasts seem oh so low-tech” Event
,
7

Marketer Magazine, August / September 2004, page 9-10. (Author’s Note: You’ll find a really cute picture of my
newborn son on page 6).
Ibid.
8

David A. Steinberg, “The future’s in the phone: the wireless world is still all about voice – CEO Perspective” in
9

Wireless Business & Technology, July 2003.
Riva Richmond, “Pre-Emptive Strike: Cellphone spam isn’t a huge problem yet. And regulators want to make sure
10

it never is., Wall Street Journal, September 13, 2004, page R13.
”
“The Future of Wireless SPAM” an iBrief by Duke Law and Technology Review 0021, October 28, 2002.
,
11

Ibid.
12

Riva Richmond, “Pre-Emptive Strike: Cellphone spam isn’t a huge problem yet. And regulators want to make sure
13

it never is., Wall Street Journal, September 13, 2004, page R13.
”
For more information about the Common Short Code process, visit http://www.usshortcodes.com.
14

Ken Florin of Loeb & Loeb in an email dated September 20, 2004. Note: If you’d like more information on this
15

topic, please send an email to bill@billcarmody.com and I can send you a detailed summary along with links of
where to go find out more information.
Carat Interactive, “The Future of Wireless Marketing” White Paper, 2002, page 9.
16

20

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