Commentary by Jonah Bloom

Cellphone Marketing Must Surely Catch on in the U.S.

The Cellphone Will Evolve From Voice Device to Popular Multimedia Tool

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Back in my native Britain for Christmas -- they don't do that PC "holidays" guff in Blighty -- I was struck by the omnipotence of the mobile phone. There are lots of people here who would tell you their cellphone is
Jonah Bloom, executive editor of Advertising Age.
important to them, but in the U.K. the mobile has attained the kind of lifeblood status most of America still reserves for cars and TVs.

Perhaps the difference lies in the breadth of functions for which cellphones are used. In the U.K., radio or TV "call-ins" have been replaced by "text-ins." A pub discussion about a new album prompts a friend to whip out his Nokia and play it to me there and then. My mum hands me her cell so I can watch a video of my nephew doing his first crawling. When I drive into London's traffic congestion charge zone, I text message my credit card and license plate numbers to London Transport, which texts me back to thank me for my 5 pounds.

Lagging behind Europe
Yes, I do have more evidence than just my half-baked Christmas anecdotes. About 65% of Americans have cellphones compared to around 90% of Brits; says that about a third of U.S. cellphone owners send text messages whereas almost 80% of the U.K. populace are SMS regulars; and while European carriers get 10%-12% of their revenue from mobile entertainment, U.S. carriers get just 3% from these services.

Of course, the beyond-voice cellphone is not just a U.K. phenomenon. Cellphone gaming, still a nascent market in the U.S., is already a $2 billion-plus business in the Asia-Pacific region, where, in many countries, cells outnumber people.

The U.K.'s Jamster is one of a horde of vendors selling games, ringtones and other multimedia products to a market where 90% of all consumers have cellphones.
While In-Stat/MDR expected U.S. users to spend $146 million on ringtones in 2004, the global market was $3.5 billion, according to Arc Group (about 10% of the global music market.)

The corollary of broader use of cellphones in Europe, Asia and the Middle East is that marketers in these regions have paid more attention to the cell as a marketing channel.

Tuesday night SMS pub push
Two of my favorite examples: In Dubai, Kellogg and its agency Starcom created an interactive TV show called "Arabian Rally" that allows kids to race against each other, live on TV, controlling their onscreen cars with their phones. In the U.K., in a suitably less sophisticated, boozier campaign, Diageo used an SMS push to get drinkers out on usually quiet Tuesday nights. Those who responded to a promotion offering a free Guinness were texted the details of the pub where they could claim their pint. Tuesday ale sales soared.

Few European and Asian marketers are spending mega-bucks, according to Starcom Senior Vice President Andrew Swinand, who has overseen research in this area. But he notes that most are making cellphones a campaign component, if only because they realize their growing importance as a medium and want to educate themselves. And he feels that U.S. marketers had better start paying attention too.

Portable communications device
"The key thing is how people define the phone and our research shows a big shift," he says. "It's tipped from being seen as a voice-to-voice tool to being a portable communications device." Swinand says that is the "critical first step" towards the type of use seen in the U.K.

Jim Ryan, vice president of data marketing at Cingular, agrees that the U.S. mobile market is at, or at least nearing, a tipping point. He says there are two pre-conditions for cellphones to become marketing vehicles: consumers that understand text or multimedia messaging, and an intercarrier offering that enables marketers to run campaigns across all wireless-service providers. Ryan adds that both "conditions" are now being met.

"The adoption curve for SMS is even faster here than we saw in Europe or Japan," he says. "It won't be more than 12 to 24 months now."

Reconnaissance trip to Hong Kong or London anyone?

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