Reaching the Widest Audience with Common Short Code and SMS Mobile Marketing

Reaching the Widest Audience with Common
Short Code and SMS Mobile Marketing
March 2012

Reaching the Widest Audience with Common Short Code and SMS Mobile Marketing

SMS Continues to be the Companies are turning to common short code mobile marketing
today because it delivers personal, immediate and actionable
Best Mobile Marketing Channel content to a target audience that has opted to receive messages.
With 102.4 percent wireless penetration in the United States*,
more companies and organizations use the medium to reach out A Common Short Code (CSC) is a 5 or 6 digit carrier-approved
to existing and potential customers. number that mobile phone subscribers use to send SMS
messages in order to receive information, promotions, alerts and
Specifically, SMS is the most effective channel for marketers
branded content directly to their device. This interaction proves
because of its simplicity, adoption (or) familiarity, and unbiased
mutually beneficial to consumers and brands by establishing
reach. Virtually all phones are SMS capable, which means
a two-way communication channel with considerably flexible
the channel can reach 5 billion subscribers worldwide. The
data-delivery capabilities. The CSC gateway enables wireless
International Association for the Wireless Telecommunications
subscribers to access mobile applications and participate in
Industry (CTIA) reported U.S. annualized yearly text messaging
voting and polling, customer feedback, database enrollment,
at 2.12 trillion in June 2011, indicating a huge opportunity
news and offer alerts, contests, surveys, chat, games, direct
for marketers. And, according to Nielsen Mobile, the average
marketing and mobile commerce. Short code campaigns
consumer sends 600 messages per month compared to using
are rapidly growing in popularity because of their inherent
less than 200 voice minutes.
simplicity, ubiquitous outreach, societal trendiness, and
perpetual accessibility.

The result of an advertising initiative by Chicago’s Shedd
Aquarium perfectly illustrates the benefits of using short codes
in marketing campaigns. To test the difference in response rates,
the aquarium ran several TV commercials that directed viewers
to a Web site to register for a contest and one commercial that
gave viewers the option to enter the contest by sending a text
message to a short code.

What is astounding is that 31.6 percent of U.S. households are
wireless-only, suggesting that they rely solely on their mobile
phones as opposed to the traditional landline. Ninety-five
percent of existing mobile contracts have SMS built into the
agreement and more than 90 percent of text messages are
opened and read compared to less than 40 percent of all email
solicitations. SinglePoint found that 90 percent of text messages
are read within three minutes of delivery and that the recipient
eventually reads more than 99 percent of all text messages.
The short code campaign generated 325 percent more entries
The universal accessibility and usage of SMS, combined with the than the Web-based call-to-action. While it only ran in 25
ability to provide information in real-time, creates opportunities. percent of the ads, the short code campaign generated to 52
percent of the total entries. The results demonstrate how short
Brands and advertisers can use SMS to
code campaigns make it easy for the consumer to respond to the
• Reach customers who do not have a smartphone
calls to action while it is still top of mind.
• Reach consumers they have not engaged with recently
(customer retention) Ashley Furniture HomeStore provides another example of SMS
• Acquire customers who did not even know you existed effectiveness when compared with email. The chain held a
• Monetize interactions through incentivized offer paths four-day Secret Sale that was only promoted by email and SMS.
• Add another channel to the communication preferences list After subtracting the discounts from coupons, Ashley Furniture
as more people prefer SMS as a contact mode HomeStore sold $122 dollars of merchandise for every dollar
• Drive sales through coupons and deals spent on SMS – which dominated the $76 ROI achieved for every
dollar spent on email.

* CTIA Wireless Quick Facts, June 2011: Determined by # of active units divided by the total U.S. and territorial population (Puerto Rico, Guam and the USVI)

Page 2


The Multichannel Plan
Businesses will always use, print, radio, TV and Web marketing
to communicate with potential and existing customers. But
integrating these channels into a large marketing push can
create a stronger response. Adding mobile to one’s marketing
mix gives legs to other channels. Mobile makes your online
efforts work harder and your print efforts more measurable, for
example. The value of adding mobile is giving existing media that
anytime, anyplace feel.

When looking at one’s mobile strategy, that too must have a
multichannel presence. A successful mobile strategy is one
where the worlds of messaging, Web, advertising, apps and SMS
converge, as each has unique strengths and definitive purposes.
SMS can be used to complement other mobile channels such as
Apps. Not only can it assist a consumer in locating an application,
it can remind the user to use the app and inform the consumer
of updates. When appropriately implemented, SMS reminds
customers about what is most important to them – no matter
where they are or what they are doing.

Companies need to integrate SMS into every aspect of their
mobile efforts. For example, SMS can be integrated into Retailer Claire’s ran a Mobile Secret Santa program to engage
applications and mobile Web sites to maintain consumer-brand its teen demographic. By participating in the program, a group
engagement, help drive them towards richer media experiences, of friends could add items to a wish list and Claire’s coordinated
or provide alternative methods to communicate. Text messaging cross-shopping via mobile alerts and emails. Claire’s sent text
can be used as push mechanism; therefore it can stimulate messages to all friends in the Secret Santa circle specifying
action and interaction instead of always leaving it up to the which gifts each friend wants. Teenagers are mobile-aware
consumer to initiate communication. consumers, and the Claire’s example is a tri-messaging
approach because it leverages social media, mobile marketing
In addition, SMS provides valuable insight on customers,
and email together.
prospects, and the effectiveness of traditional advertising
spends – all while generating a mobile database for future For retailers that have yet to take the plunge into mobile,
remarketing. Adding SMS to the mix solves that problem. trust that the time is now. Many retailers in the last year have
Additionally, adding an SMS component to existing marketing embraced social media, and the vast majority used email prior
and advertising extends the reach exponentially to subscribers to that. For many such organizations, mobile is the last element
with device limitations – such as the capability to download an needed to achieve the ideal tri-fecta. Companies, especially in
App. Furthermore, applications use data that can get expensive the retail space, can use SMS initiatives for list growth. SMS is
without a data plan. The universal accessibility and usage of also a great way to get people in the door in a nonthreatening
SMS, combined with the ability to provide information in real- manner with voting or a sweepstakes. Loyalty campaigns, SMS
time, creates opportunities. Mobile transaction network mBlox’s alerts for new products on sale and sneak-peak offers make
consumer research revealed almost 90 percent of consumers customers feel engaged and want to come back to retail outlets
prefer multichannel options for interacting with businesses, or continue buying products from the same brand.
with SMS topping the list.
In-store or out-of-home signage with an SMS keyword and short
Retailers such as Walmart, Sears, PacSun, Claire’s and Auntie code is an ideal approach to have consumers opt-in to receive
Anne’s Pretzels, as well as brands such as Butterball Turkey, are messaging. Using a unique keyword for each call-to-action can
using SMS as an integral part of their marketing strategy. Any help with tracking so that retailers can look at the best markets
company using email or social media as a campaign element and judge results based on region or location relative to the
is a mobile marketer whether it realizes it or not. Additionally, call-to-action. Mobile in general and SMS in particular are on
SMS is a highly effective way to complement and enhance a tri- brands’ radar, and use of the channel will only increase in the
messaging approach. coming year. According to Lyris, mobile coupons garner a 10–20
percent higher conversion rate than print coupons, and there
is significantly less clutter in the SMS channel from brands at
this point.

Page 3


Businesses Driving Marketing of keywords and planned promotions, Nimnicht was able to
effectively gauge dollars spent on radio, thus allowing them to
Success with Short Codes more efficiently allocate their marketing spend.
Carrabba’s Italian Grill locations in Orlando and Tampa ran an
SMS campaign to further engage customers and learn more “The Nimnicht Family of Dealerships wanted to use mobile
about their interests while deepening brand awareness and to grow a database and reach our customers in the way they
technological advances. Carrabba’s hoped to achieve a 5 percent communicate. Utilizing mobile has allowed us to build a stronger
redemption rate. The target audience was men and women ages and deeper brand relationship with potential new customers. As
25–54. Each participating Carrabba’s location had the ability an added bonus, we were able to analyze the strength of our radio
to grow its own database and select specific business touch partners by judging the mobile response, which has helped us
points where it wanted to grow sales. Each SMS campaign plan our marketing more efficiently. Mobile addressed several
was positioned to promote the different ways customers can challenges for us. First, simple SMS helped us build a one-to-one
experience Carrabba’s through SMS. relationship with both current and new customers. It allowed us to
Calls to action varied among each campaign that was used. communicate with them and actively drive sales. Second, mobile
Different offers were used to resonate with the customer and helped us stand out from surrounding dealers; our advertisements
encourage repeat visits and increased traffic to restaurants. In stood out, had fresh call-to-action statements, and generated
one of the campaigns, consumers were asked to text the keyword immediate tangible leads. Finally, mobile has helped us monitor
AMICI to short code 82672. Carrabba’s customer appreciation our advertising and measure each ad’s effectiveness.”
group is called the Amici Club so this program was an extension
of an existing program. There were 443 participants, accounting
— Lauren Dozier,
Director of marketing and advertising,
for a 35 percent redemption rate. Next, Carrabba’s will expand
Nimnicht Family of Dealerships.
the test nationwide to create a greater presence in this category.
This will launch through Carrabba’s customer appreciation
group, Amici Club. The same mix will be used as this test through Dodge of Auburn Hills, MI, asked consumers to text the keywords
providing offers and engagement texts. RAM, RAMRODEO or RAMSIXFLAGS to a short code. The aim of
the sweepstakes campaign was to promote Dodge’s new lineup
“The SMS campaign allowed us to increase customer traffic to of Ram trucks. In conjunction with Six Flags theme parks and
our restaurants in a manner that allowed for growth in specific national Dodge Rodeo events, the sweepstakes campaign
segment sales that were exclusive to each restaurant.” integrated SMS, the mobile Web, email and a traditional Web site
to promote Dodge Ram trucks. What enhanced this promotion
— Jamie Miller, was the integration with a traditional Web site to capture
Brand marketing manager at Carrabba’s Italian Grill. incomplete mobile entries. Consumers who replied with their
email addresses via SMS were simultaneously sent an email
The Nimnicht Family of Dealerships in Jacksonville, FL, ran inviting them to complete their entries from their PC’s as an
an SMS marketing effort which utilized targeted keywords to: alternative to their mobile devices. In this way, consumers with
gauge ROI across multiple radio stations; build a large mobile limited ability to access the mobile Web could easily participate
database for service specials, event pushes; and, leverage in the promotion, and Dodge was able to maximize the reach of
double opt-in campaigns towards generating warm leads and the campaign across multiple channels and demographics.
thus earn sales.
Throughout Six Flags theme parks and Dodge Rodeo events,
The dealership used text-to-win opportunities that fit the calls-to-action were placed in-venue encouraging attendees to
car brand on local radio. Examples include the opportunity text the keywords RAM, RAMRODEO or RAMSIXFLAGS to a short
to text-to-win Taylor Swift tickets, a GMC Sierra and passes code. Consumers that responded to the calls to action received
to Pro Bowl. Text-to-win tags were added to current radio an SMS asking them to reply with their email addresses for a
spots. Energetic radio commercials were recorded, which chance to win a weekly prize. In response, Dodge then returned
listed the keyword and short code a minimum of two times a second SMS reply which included an embedded URL that lead
per ad. After a significant database was built, an offer was to a mobile Web site containing an entrty form towards a grand
pushed that was valuable only to those people genuinely open prize vehicle drawing. The mobile site also included a Dodge
to purchasing a new or used vehicle. These people were then dealer locator and information about Dodge trucks.
considered tangible leads for the dealership; each was called
While entries via a traditional Web landing page accounted for 84
and personally invited in for a test drive.
percent of the total, more than 15 percent of the entrants began
The dealership generated 4,000 mobile opt-ins. After the their engagement with the program via text messaging from
double opt-in request, the program created 370 workable outdoor promotions. The sweepstakes demonstrates the power
leads (9.25 percent). In addition, because of the targeted use of mobile to attract and increase entries.

Page 4


Guidelines for Calculating
and Measuring ROI for CSC
Marketing ROI can be difficult to quantify, because many of
the traditional on-line metrics used to measure success do
not always transfer to mobile. Short codes can offer better
tracking than the circulation counts or third-party ratings
surveys of traditional broadcast media – but still aren’t 100
percent quantifiable. To calculate short code ROI, firms must
define the metrics that will be measured as well as define the
upfront and ongoing costs of the short codes. A business should
also review the cost of short codes relative to other marketing
vehicles (such as print, broadcast, and multi-media). The goal of
the campaign will determine what metrics are used to calculate
the ROI. Engagement should be the end goal to measure return.
Engagement is more than just a click. Audience engagement
comes in the form of sales, votes, registrations, downloads or
other items. Defining which forms of engagement you want to
create and how your firm will measure Return on Investment
(ROI) is critical to the success of any short code program. Firms
should consider both the hard and soft ROI metrics when
designing campaigns. Hard ROI is a return that can be quantified
in cost savings and/or increased profits while a soft ROI may be
calculated using other metrics such as increase in customer The up-front investment is based on the cost of acquiring a short
loyalty and brand awareness. For example, a campaign that code, the cost of developing a creative campaign and the cost
allows a consumer to purchase a ringtone from their phone has of running the campaign. Also, since you are usually going to
a hard ROI because it can be directly correlated to profits while implement a common short code as a call to action with your
a campaign that is focused on engagement will produce an ROI traditional media, you increase the effectiveness of your entire
based on metrics such as number of interactions. campaign, thus getting a better ROI for your total marketing
program. Adding a common short code has been shown to
Goal of short Metric used to measure increase your response rates, in some cases by 100%.
code campaign campaign success
Common short codes (CSCs) are relatively inexpensive to
Increase profits Profit per promotion, number implement,when compared to total costs of traditional campaigns,
of coupons downloaded and/or but do require strategic planning and a solid investment of
redeemed time. Companies looking to mobilize their campaigns via
CSCs must decide on either a Shared or Dedicated short code.
Customer acquisition Number of leads, conversions per Shared short codes are utilized by multiple organizations
lead, cost per lead, cost per lead manageable by unique keywords that identify account/brand
versus another channel specific traffic. The Shared code model is typically less costly to
implement. However, this approach also comes with a variety of
Customer brand Subscription to a campaign, pitfalls – such as forfeiting the ability to specify a desired code-
awareness and loyalty downloads per campaign, string and/or mobile address, as well as common limitations
number of times a game was associated with the selection of keywords that suit the brand/
played by an individual initiative. However, the most significant disadvantage of utilizing
Data collection Number of responses, quality a Shared code is the inherent risk. If there is a violation on any of
of the data compared to other the programs running on that code, the entire code could be shut
channels down, affecting all campaigns running on that code. Whereas
Dedicated codes, and all subsequent keywords, are reserved
solely for the associated company and are flexible as either a
random set of numbers or a specific (vanity) code. The cost of
a random short code is $500 a month while the cost of a vanity
short code is $1,000 per month. Also worth noting is that the
random generation of a CSC will result in a 5-digit code.

Page 5


A business must file an application form for leasing a short (ad, game, etc) is the final component of cost analysis, and
code from the Common Short Code Administration (CSCA) varies based on the type of campaign and the firm’s ability to
www.usshortcodes.com. Depending on your expertise, your develop the creative in-house. The total cost of the campaign is
company may choose to define a short code strategy and file collaboratively defined by the costs of the short code, the MASP,
for the application yourself or hire a Mobile Application Service the aggregator and the content portion of the campaign. By
Provider (MASP). It is best to have most of your campaign focusing on accurate campaign costs and defining the returns,
defined before the application is submitted, but you can you can demonstrate the value of short code marketing in terms
secure a code and submit campaign information after, but of profits, engagement and retention.
campaign information must be completed before the code can
be provisioned on carrier networks. The cost of working with an
MASP varies according to the complexity of the campaign launch,
Conclusion
CSCs offer companies personalization, relevancy, and immediacy
but on average costs around $5,000 per month.
with their marketing campaigns. CSCs allow for a two-way
Once the campaign is defined and the short code application dialogue, making it possible for organizations to gather a wide
has been accepted, either your firm or the MASP will need to range of information from wireless consumers. Short code
work with an Aggregator to provision the connections directly campaigns encourage and develop upon customer relations
to one or more wireless carriers networks for testing and through consumer-initiated, consumer-controlled interaction
certification approval. Unlike the MASP, the business is required with a brand. Companies are embracing short code marketing
to work with an Aggregator since operators will not allow campaigns because mobile delivers higher response rates than
companies to directly connect into the system. Aggregators traditional media and inherently offers measurable returns
may work with one or many carriers. The business must decide such as the outcome of the participation per the dollar spent.
how many carriers it would like to run the campaign and Marketers should look toward short codes as the unifying link
select one or more aggregators to support the integration with that makes online, TV, billboard and print ads more innovative,
wireless networks. The cost of an aggregator per carrier varies appealing, and actionable to the consumer.
according to what services are required. The branded content

For more information on how you can integrate Common Short Codes into your marketing and advertising visit
www.usshortcodes.com or email sales@usshortcodes.com.

About Lopez Research: Lopez Research offers industry market research and strategy consulting. The company specializes in
mobility, collaboration, social software and video. Its mission is to understand the evolution of these industries, provide thought
leadership, and assist its clients in building winning market strategies. www.lopezresearch.com

About Neustar, Inc.: Neustar (NYSE: NSR) solves complex communications challenges by providing market-leading, innovative
solutions and directory services that enable trusted communication across networks, applications, and enterprises around
the world. Visit Neustar online at www.neustar.biz. Neustar manages and operates the CSC Registry on behalf of CTIA – The
Wireless Association®and participating wireless service providers. Visit www.usshortcodes.com.

Material herein contained may not be duplicated, redistributed, excerpted, sold, or stored in any information retrieval system
without prior express written permission of Neustar, Inc. Neustar and the Neustar logo are registered trademarks of Neustar,
Inc. All other company, brand, and product names are the trademarks or registered trademarks of their respective companies.

© Copyright 2012 Neustar, Inc. All Rights Reserved.

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Reaching the Widest Audience with Common Short Code and SMS Mobile Marketing

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