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December 29, 2009

Is U.S. Behind in SMS Marketing?

By Gary Kim, Contributing Editor

One of the recurring themes in the U.S. communications policy community is that the U.S. is “behind” the rest of the world, or at least the leaders of the rest of the world, where it comes to communications technology and services. Though that allegation rarely, if ever, is made about Internet technology, where the U.S. market typically leads, it often is said that the U.S. lags in one or another mobile services, for example.

In recent decades observers complained about low mobile usage, until U.S. consumers erased the gap. Observers complained about low text messaging behavior, until U.S. consumers closed the gap. There rarely have been complaints about low smartphone usage, or low mobile application innovation, because the U.S. market “leads” in those areas.
These days the U.S. market is said to lag in mobile marketing, in particular text messaging. That is true, by quantitative measures. It likely also is a “problem” that fixes itself once people and firms decide they understand the value, as has happened with every other facet of mobile life.
Despite complaints by some observers, the reason U.S. mobile marketing using text messaging is not as “advanced” as in some other countries has many possible explanations. Simple charging mechanisms and prevailing tariff rates likely are a factor. U.S. mobile customers, for example, place huge number of voice calls in a typical month, compared to European customers, for example. Price is the likely reason. U.S. domestic calls are quite low, and more European calls must cross a border, making them “international” calls.
Tariffs might also explain why Europeans adopted text messaging more readily than U.S. consumers. If voice calls are expensive, it is rational to send a cheaper text than to place a call.
Still, there are institutional issues in the U.S. market that likely have made text messaging campaigns less prevalent than elsewhere. The U.S. mobile market features a higher-than-typical percentage of mobile email devices (Research in Motion's sales of BlackBerry (News - Alert) devices are strongest in North America). So marketers might simply be choosing email campaigns over text messaging campaigns.
Commuting patterns also are different. U.S. users disproportionately commute by automobile, when radio is the dominant medium in use. In other parts of the world, it is more likely people are using public transportation, where radio is not so much an option, but any device-based communication or entertainment requiring attention, is viable.
Text messaging will be adopted and used as a mobile marketing medium when it makes sense to do so, just as other tools and applications have been adopted when users decided it was useful. Smartphone and mobile Web usage in the U.S. market is higher than typical, for example. For whatever reason, U.S. users decided smartphones and mobile Web were useful.
It is pointless to worry about whether U.S. consumers are “ahead” or “behind” in adoption of any particular facet of mobile technology. Adoption is a choice, typically driven by perceived value. Without arguing about “why” text-based messaging is not used as much in the U.S. market as elsewhere, one might simply note that, for whatever reason, the value hasn't been seen, to the same degree as elsewhere.
That likely will change over time. But it will change when large numbers of people understand the value. We needn't worry about whether the U.S.  is “behind” or “ahead,” anymore than we ought to worry about all the other things people buy, or don't buy. When the value is seen, the tools get used.
Particularly in the mobile space, innovations that were adopted faster in other regions ultimately were adopted at similar rates in the U.S. market. We also need to keep in mind that some innovations have been adopted fastest in the U.S. market.
The point is that we can't account for all global variances in a mechanical way. Sometimes, when consumers are not buying or using a product, suppliers have a tendency to want to blame consumers for not buying the product. It likely is more accurate to say they don't want to buy the product, at the moment.
If text message-based mobile marketing is less advanced than elsewhere, there likely are good reasons.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Erin Harrison

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