Courting the ‘young and the wireless’

By KRYSTLE CHOW
Published in the Ottawa Business Journal newspaper and website.
Dec. 10, 2007 (Dec. 12 on OttawaBusinessJournal.com)

Click here to view this article on OttawaBusinessJournal.com.


Photo by DARREN BROWN for the Ottawa Business Journal

Picture this: you’re walking down the street when your cellphone beeps. It’s a message alerting you that tickets to that sought-after hockey game are now available. You go online, purchase the tickets instantly without waiting in line and voila! You’re on your way.

That immediate jump to action is what marketing departments are hoping for with this pervasive and interactive new method of reaching out to customers, especially with the tech-savvy 18-to-24 age group.

Forget e-mail marketing if you’re looking to court today’s generation, says Isabelle Perrault, director of marketing for the Ottawa Senators – the way of the future lies with mobile marketing.

“Print or TV are pretty static media, but as soon as you add mobile, it’s very interactive. It engages people, it’s relatively easy, and it’s immediate,” Ms. Perrault says.

The Ottawa Senators started using wireless marketing before the 2006-07 NHL playoffs, first registering a vanity short code to which wireless users would send a text message in order to opt into the Senators’ database.

After the playoffs, Ms. Perrault says, the hockey team’s wireless service got 800 subscribers simply from putting the short code information on the Senators website.

Season ticket holders were also polled to find out the extent of their text messaging usage. The result? A majority of regular Ottawa Senators fans – 62 per cent – send and receive text messages on their cellphones.

“That was a good indication to us,” says Ms. Perrault, adding that it was a “no-brainer” to add wireless to the Senators’ marketing strategy, especially to build fan engagement with the younger demographic.

FACTS ABOUT MOBILE USAGE IN CANADA

  • The Canadian Wireless Telecommunications Association (CTWA) predicts that Canadians will triple their spending on wireless data to more than $3 billion in the next three years. Approximately 10 per cent of the average Canadian’s monthly cellphone usage is now related to products such as text messaging, wireless e-mail and mobile Internet browsing, with wireless service providers reporting data growth rates of more than 50 per cent per quarter.
  • Canadians now send more than 795.3 million text messages per month, or more than 26.5 million text messages per day, according to txt.ca.

In fact, the Canadian Wireless Telecommunications Association (CWTA) reports that the volume of text messages sent from one Canadian cellphone to another more than doubled year-over-year to 4.3 billion in 2006, from 1.5 billion a year earlier. That’s up from less than 250,000 in 2002, when inter-carrier text messaging service was first introduced.

The CWTA noted that Canadians have already sent nearly double the number of text messages counted in all of last year in just the first nine months of 2007.

CWTA spokesperson Marc Choma says 19 million Canadians, or 60 per cent of the total population, currently have wireless service, making short codes an increasingly popular form of marketing.

“You’re developing a personal relationship with your customer (with mobile marketing) and guaranteeing that your message is being read. You can drop off a magazine or newspaper to someone, but there’s no guarantee they’ll see your ad,” says Mr. Choma. “Cellphones, on the other hand, are very personal items; you’re going to read (text messages), people don’t go anywhere without their cellphones, they’re always on your person.

“A lot of people may say (mobile marketing) is just for kids, and it’s really not. Maybe back in 2002, but you’re seeing it right across the board now. I certainly don’t fit into the 16-to-24 category and I do a fair bit of text messaging myself,” he says, adding that he’s a bit of a “news hound” who gets instant news alerts on his cellphone.

Mr. Choma says mobile marketing is not just for a niche audience any more, and businesses are starting to take notice of the medium’s popularity, with short code applications coming in from companies as diverse as Pizza Pizza or the National Post, for contest voting or for lottery ticket alerts.

“You will rarely open up a magazine these days and see an ad which doesn’t have a short code element,” says Mr. Choma. “Even if they’re not being used as a sole marketing effort, (short codes) are being used as complement, and with sporting events, people are becoming very accustomed to short codes.”

He points to a recent example with the popular game show Deal or No Deal, where viewers of the show were invited to guess which numbered case contained the big prize through the Internet or via text messaging.

“Mobile was by far the preferred method of entry,” he says. “There were 160 mobile entries per second, far more than the peak of 20 per second for online entries.”

On top of that, Canada has the second-highest usage of wireless services in the world, with each subscriber logging an average of 400 minutes per month, a number which is exceeded only in the United States. That signifies a lot of potential for businesses, Mr. Choma says.

However, is this a sustainable form of marketing? Michael Cowpland, chief executive of mobile content and service provider Zim Corp., says that it’s difficult to predict at the moment.

“(Mobile marketing is) in its early days yet and it relies on a lot of opt-in databases … you can’t just spam people, the rules are completely against that,” says Mr. Cowpland, whose company has slowly been moving away from the short code business. “No doubt it will build up as the lists begin to emerge, but it’s a fairly slow process.

“We’ve been following what’s been happening in advanced (wireless) markets like Britain, and a lot of people thought (mobile marketing) would be good, for example, with a person getting a hamburger ad on their cellphone as they pass by (a fast food outlet) on the street, but due to privacy concerns, it’s tightly guarded, there are concerns about predators tracking teenagers. Cool ideas have not transpired.”

Mr. Cowpland says the increasing number of service providers jumping on the short-code bandwagon could also mean lower margins for each mobile service company, which was part of the reason why Zim decreased the size of its short code business from 30 per cent at one point to about five per cent at the present time.

“It won’t be a hockey-stick kind of market,” predicts Mr. Cowpland.

For Ms. Perrault, however, the benefits of mobile marketing outweigh the negatives, even if it’s not likely to become the main method of reaching out to customers.

“We’re not going to … put all of our resources into this, we’re going to start with piloting. But the audience is small enough that we can be very nimble, and it’s not all that costly,” she says.

Ms. Perrault notes that the wireless medium also helps the Ottawa Senators open up new revenue streams and encourages ticket sales. With its new ticket alerts program, the Ottawa Senators could soon see its 60,000 e-mail alerts subscribers converting to text message notifications, and the team is also seeing a small but steady stream of income from premium wireless services such as ringtone and cellphone wallpaper downloads.

“There aren’t going to be huge returns from the get-go, but we have to get into this … it’s really about integrating mobile into our marketing mix,” she says. “We’re reaching out to the young and the wireless.”

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