"This is an emerging market. We see this as very fertile ground for us," said David Bowen, director-advertising, Verizon Wireless.
Verizon Wireless' IM service-available to both Microsoft's MSN Messenger and America Online's AOL IM users-is not the first cellphone IM service to market. Soon-to-merge competitors Cingular and AT&T Wireless each offer a similar service, as do Sprint and T-Mobile, among others. Sprint, which previously offered a Web-based message service called PCS short mail, last week launched a second product, two-way SMS text messaging, available on five handsets. Cingular Wireless in November launched MIM in partnership with AOL, which allows consumers to check AOL Buddy Lists.
With cellphone penetration now at 53.6% in the U.S., all these marketers are looking for ways to expand. Among 18-to-24-year-olds that have their own cellphone or share one, the percentage is much higher, 77%, according to telecom consultants Yankee Group, Boston.
"Carriers recognize that this group is extremely tech savvy, reliant on wireless services and frequently influence phone usage within their family," said Linda Barrabee, analyst at Yankee Group. Winning customers over with wireless IM-or other messaging and data services-generates additional revenue for carriers. Even though the youth market is nearly tapped out, it still offers growth opportunities for incremental revenue through add-on services.
Verizon Wireless today launches a national youth-focused advertising campaign promoting its instant-messaging service. Spending on this effort is estimated at $10 million to $12 million, but an executive familiar with Verizon Wireless' plans said marketing to consumers between the ages of 16 and 24 years is a key initiative for 2004.
Mr. Bowen said spending for the youth campaign will be "consistent in terms of the percentage of the [marketing] budget" with last year's spending.
Created by independent LevyTenny, New York, the campaign includes one TV, three radio and two print executions, all of which emphasize that the look, feel and sound of cellphone IM is exactly the same experience as that on a computer screen. Both the TV and, in particular, radio spots use cheeky humor to engage young consumers and appeal to the demographic's fear of being disconnected from their friends. For this group, "any reassurance that they can stay connected" is a plus, said Rich Levy, LevyTenny chief creative officer.
Mr. Levy, before opening LevyTenny in January 2003, worked on Verizon Wireless and its predecessor companies for six years as a creative director at Interpublic Group of Cos.' Bozell, which handled the cellular service company's account until last year when it was merged with Lowe. Lowe lost the account to sibling McCann-Erickson Worldwide early this year.
Although most 16-to-24 year-old consumers have cellphones, marketing to them is a sensible strategy for several reasons, said Yankee Group's Ms. Barrabee. Most importantly, they're the ones most likely to be aware of and want the service. "They've become heavily reliant on these services on their PCs, and so they're primed for these services" on cellphones, Ms. Barrabee said. This group, she added, is already familiar with IM lingo, and is thus more willing to adapt to the complexity of cellphone IM-ing, which requires triple tapping on keys and learning key shortcuts.