While on recent trips to Europe and the Pacific Basin, we were able to see first hand the progress on-line gaming, on-line video and a new aspect of cellular communications called short messaging services (SMS) have made. Already a number of service providers and advertisers are experimenting with the new advertising "opportunity." Then, just a few weeks ago, my wife and I decided to have a quiet and relaxing evening so we went to see a recent movie release, The Shipping News. I got the eerie feeling that SMS had suddenly been raised to a new level. The bar had been raised and I didn't even know I was running the race.
In case you haven’t seen the movie allow me to give you a quick summary as it relates to personalized messaging.
An individual walks down the street and when he or she makes contact with an intelligent messaging machine, the individual is bombarded with custom tailored holographic messages regarding his clothes, his finances, all of his or her personal concerns. The science fiction movie was obviously designed to entertain but as I left the theater I wondered how soon would sci-fi become reality!
Already on-line video gaming has become a major industry as Sony, Nintendo and Microsoft rush to deliver interactive works that individuals from across town, across the country or around the globe can use to join together and play. The subscription model is being offered on desktop systems, go with you notebook systems and in several areas on cellular phones. People of all ages are signing up and logging on.
Camera, Cell Phone Are Merging
The combination of cellphones and digital cameras is growing rapidly. The combination is already well established on the Pacific Rim and in Europe. It is only now gaining traction in the U.S. as people find it fun and useful to capture and share personal moments and images. Sony, Canon, Matsushita/Panasonic and many other leading camera manufacturers already see the combination solutions as the next wave of communications sales.
It is interesting to note that the still camera/phones and services have been rapidly embraced by the consumer.
At the same time, manufacturer’s efforts to combine digital video cameras and cellular phones together have failed to develop any level of significant interest. This is probably due to a combination of factors including cumbersome size of the video phones, high cost of the units as well as the high cost and reliability of video communications bandwidth.
There are also stronger reasons that video cell phones have not been embraced and that is the lack of a compelling reason to use the available technology…yet. People everywhere want to capture and share individual moments, memories and ideas. No one has developed a compelling need to widely and continuously share on-going activities.
Just as videophones were introduced in the 40s and 50s and were described as ‘cute and cool’ people quickly tired of the idea. While the videophones remain a mainstay of the sci-fi movie, Internet video conferencing has still not gained widespread usage despite the availability of industrial-strength broadband services and low-cost web cameras.
Compelling Solution
Individuals, small firms and global enterprise departments need compelling requirements before the technology and service will be widely accepted and used. While a number of research firms have noted the rapid acceptance of the technology in the pornography industry, we doubt if such applications and sales will encourage individual users and firms to accept the technology based on that “strong recommendation.”
However, service providers around the globe have begun to embrace and promote the video cellphone solution because it does provide a sharp upswing in on-line service (hence revenues). Only in very limited numbers have people accepted the value proposition for video cellphone delivery but photo transfer is growing rapidly.
By the same token there are other consumer trends that must be considered:
Growing numbers of people are deciding they would prefer to pay for internet radio services that are subscription based, not advertising supported
Internet users are purchasing and using programs and services that filter or block out drop-in, drop-down and ‘sticky’ promotional activities
Consumers are purchasing DVD recorders and similar PVRs (personal video recorders) that enable them to cut out interruptive ads
Slow Launch
When the concept of short message services first arose in late 2000 it garnered very little attention. It took more than nine months for individuals and organizations to realize the value of sending short, sometimes cryptic alphanumeric messages. Today people men, women and youths routinely put their cellphones on “stun” in meetings, classes and other activities where answering the phone would be disruptive and prohibited. They are still able to communicate stay in touch and as we say all too frequently, multitask.
With the growing popularity of written messaging, service providers saw a new opportunity to increase revenues while advertisers saw a new and hopefully more productive means of reaching consumers.
In several European countries and in certain markets in the Far East service providers have offered customers the option of opting-in to lower their monthly cellular costs or maintain their present service and block the unsolicited messages.
While the messaging services are still in their infancy, most service providers and advertisers are struggling to develop a promotional model that will be acceptable to consumers to ensure they resubscribe to the service. Unfortunately because of the misguided activities of some of the service providers and advertisers the results to date have been far from encouraging. According to the limited studies by CTIA and InfoTrends noted that resubscription was less than 20 percent, hardly a vote of confidence by consumers.
Deteriorating Into SPAM
The initial sign-up rate service providers reported was excellent the concept of lower on-line costs is certainly compelling. However, it would appear that consumers quickly tired of the interruptions and barrage of spam.
While the flood of message servicing and service provisioning is only just beginning, at least two entrepreneurial software developers are already selling cellular message blocking software. Undoubtedly this software was probably developed by the same people who have developed and offer the on-line filtering solution for people who don’t want to endure drop-down, drop-in and sticky on-line ads.
Properly developed, executed and monitored; SMS offers some interesting opportunities:
Service providers will suddenly have a new opportunity to produce bottomline profits
Marketers will have a very focused and control means of reaching the individual consumer in a controlled manner and with a controlled message
Is it any wonder when I watched The Shipping News I saw the seedling that could well become the mighty oak of controlled, everywhere intrusive advertising messaging?
Weighted Control
While the concept is only just beginning to emerge, it has already gained its unfair share of detractors. Consumer groups and governmental agencies in a number of countries are closely examining how the control:
the recipient from being “trapped” into receiving advertising messages he or she has no interest in receiving just because they activated their phone
the recipient who chooses to opt-in for the free or advertising supported service only receives a certain “class” of messages and is not forced to endure undesirable messages
that the cellphone user only receives a specific level of short message ads based on his or her phone usage patterns and volumes
widespread distribution of short messaging activities without prior agreement from the cellular user
As service providers seek out new revenue sources to lower their overall costs and improve their bottomlines, SMS will gain more widespread use. The challenge for both advertisers and providers is to implement the messaging technology based on a well thought-out and staged introduction program. Widespread implementation will only cause a pushback by consumer groups, corporations and governmental agencies that will position the SMS as an unnecessary, unrequested and undesirable intrusion.
Consumers will paint the implementation as a greedy solution for “companies” to tap into additional and unnecessary profits. Companies/corporations will take the position that it is an invasion on the company’s paid staff time. Governmental agencies will strike back based on their knee-jerk response to the first two sets of complaints placing greater restrictions on the service providers.
Minimize Impact
The implementation of SMS will come to pass and it will serve either as a valuable advertising tool or another mark against firms’ ill-planned efforts to reach the consumer just prior to his or her moment of purchase. It will go through a long period of mis-use and abuse until sophisticated monitoring and measurement has been carried out to profile the cellular user and his or her wants, needs and objectives.
All of this information is already available. Developing the selection matrix properly without abusing consumer trust will be vital. Organizations that abuse the data will face major pushback by consumers and governments. Their actions could dramatically impact the entire industry while it is still in its infancy.
But if the program is slowly and methodically rolled out it will become something that is ubiquitous much like the customized holographic messaging in The Shipping News and it will be with you even without your realizing its existence. Unfortunately, greed will probably overcome caution and both service providers and advertisers will bumble into delivering short messages over cellular to the point where governmental (local, regional and global) control will begin.
The challenge will be to develop and nurture opt-in opportunities that really appeal to and benefit the cellular user. Organizations like eBay and business procurement/distribution operations should be the first to develop and carryout these service provisions. They will deliver a benefit to the consumer/user, to the advertiser and the service provider. Then as the acceptance increases, added offerings can be implemented in a staged and controlled manner.
Steady, Successful Implementation
If we don’t do this in a planned manner we will most certainly see a reenactment of Apple’s famed 1984 ad. Restrained implementation will be difficult but if the effort isn’t well thought out and executed it may appear in a form and shape as well as under a governmental control that can hurt the entire industry.
The overwhelming impulse to move too quickly and too aggressively in the name of profits, will probably dominate the discussion and the industry will face yet another set back. The ability to make it succeed, fail or be dramatically restricted will be in the hands of the service providers and advertisers.
The path selection is ours to take!!!! blog
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