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The Direct-Response SMS Revolution

The Direct-Response SMS Revolution

"American Idol" appears to be the first major television production in the U.S. to capitalize on a target audience that falls into the category of "technology-savvy youth." By all accounts, the results are impressive. By April 9, AT&T was able to claim their one millionth vote via text messaging and they're still only halfway through what is, to say the least, an elongated program format. Still, if the results are to follow the trend of "Pop Idol," the UK version of the production, the final stages of the show will reap the rewards for AT&T in terms of direct-response SMS utilization.

Aside from the revenue such an activity generates for the carrier, American Idol has also inaugurated a new era in using mobile technology as a direct-response mechanism. It has raised the profile of mobile technologies in the consumer marketplace as something that can add value and generate revenue - and thus establishes a new function for the cellphone. Suddenly SMS is now an influential digital medium, alongside voice communication - so much so, that in Europe, SMS is the medium of first resort for popular reality TV shows, allowing viewers to vote for their favorite (or most hated) character.

In fact, SMS has attained so many kudos with "the establishment" in countries such as France and Britain, that governments are even investigating how they might adopt the medium for use in official elections. For a long time, experts have been pondering how best to increase voter turnout among young eligible voters. They have looked at the Internet as a possible solution, but found their efforts were fraught with fraudulent loopholes that increased the chances of multiple vote counts from automated scripts.

SMS, it seems, could be a more secure route, as officials can link in directly with just the five or so major carriers, instead of hundreds of ISPs. Trials are still taking place, but for a consumer protocol that was stumbled upon by accident, it's working well.

In terms of direct-response SMS in the U.S. compared to that in Europe, there are major differences, the main one being that most SMS voting platforms in Europe are reverse-billed, premium-rated activities. For example, it might cost 30¢ to vote for a TV show contestant. You might think this would deter would-be text voters, but it doesn't. From a reality show perspective, a lot depends on how involved the viewer is.

Like any other principle, if someone feels strongly enough about something, they will act. That call to action is voting and interacting with the show. Even landline numbers for voting are usually premium-rated. This adds a major revenue stream for production companies and networks previously not seen in the U.S.

Is it coming? Good question. I would say the model is, but that adoption will depend largely on cultural acceptance (or lack of it) of paying a premium for the privilege. That's not to say, by the way, that AT&T offered free SMS voting for American Idol. They didn't. Users paid a standard text-message fee according to their service plan. So, in effect, an initial barrier has already been removed from the road leading to premium-rate voting acceptance.

The next question is, can mobile network operators (MNOs) cope with demand? With American Idol, AT&T quite happily catered to its own subscriber base without causing a meltdown, but with the advent shortly of cross-carrier short-codes which are being trialed in the U.S., will direct response SMS cause gateways to simply fry? With proper planning it ought not to, but you will see more and more networks wanting SMS voting functionality in the coming months, and MNOs need to scale now to cope. Reaching critical media mass can only be a good thing for MNOs. It will lay the foundation for realizing the true potential of SMS content and services that up until now have suffered due to lack of uptake.

More Stories By Tom Dibble

Tom Dibble , a wireless entrepreneur, is a cofounder of
Global Wireless Forum, a forum dedicated to dealing with commercial, strategic,
technical issues on the evaluation of the wireless age in Europe and
the U.S.

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