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Is Premium SMS dead? (part 1)

It’s been a rough old ride for the world of premium SMS of late. What with the numerous scandals involving TV channels, Vodafone having a couple of overcharging problems, ICSTIS adjudications and fines on the increase and public trust in the industry at an all time low, I’m wondering whether this is the end of premium SMS as we know it.

Over the next few weeks, I’ll be writing some blog posts about the subject, with examples of how they do things in other countries, talking about how the industry can clean up it’s act, what ICSTIS plan for the future, and other related subjects. I’d welcome your feedback, whether you’re a consumer, aggregator, service provider, or just have something to say on the subject.

I’ll skip the history lesson and assume everyone knows the basics of how premium SMS works, what shortcodes are, and so on and so forth. Today’s case study is of a competition campaign for Coca Cola’s Dr Pepper brand, as I just happen to have a bottle in front of me. We’ll be comparing it to a similar competition for ITV’s popular soap Coronation Street.

The bottle gives me a chance to win ‘the ultimate Wii games room’, including a 26″ LCD TV, mini-fridge full of soft drinks, and of course the aforementioned Nintendo Wii. I can enter the competition via SMS, or just go to their website. I chose the SMS option, otherwise this would be a very short blog entry!

To enter, I just texted the unique code inside my bottle to a shortcode. That cost me my normal network rates (10-12p according to the label). This is what I got back:

Wicked. So I’m in the draw for today, and I’ve got a discount code to save some cash on some PS3 games (yes I’ve blurred the code, have to get your own!). It’s a free to user text, and Coca Cola have picked up the tab. I’ve so far spent just my normal network text rate.

Then, a few seconds later, I got another text. Although it’s from a shortcode, again it’s a free to user text:

I’ve not got a problem with being asked for my details, and don’t think this is pushy at all. My mobile number hasn’t been opted in yet, and if I don’t want to get more info I’ll just ignore it.

My point in all this? I’ve entered a competition to win about £1k worth of stuff, and it’s cost me just one text. Not one text plus 25p, or 50p, or £1.50. Just 10p inc VAT, in my case. Coca Cola haven’t got anything out of me, like permission to market to me or anything, but I’m in with a chance to win some cool stuff.

Let’s look at the other side of the coin. A quick Google through the net, and I found the terms and conditions for an ITV Coronation Street competition, where I could win a 32″ TV, a DVD recorder and a DVD box set. Ok so it’s a little bit more than what I could win with Dr Pepper, but look at how different it is:

1.4 Entry to the competition is by SMS only. Entrants are required to send a text to 63337 with the keyword QUIZ. The charge per text message will be £1 plus up to 7 messages at standard network charge. The total cost will therefore be dependent on the entrant’s network.

£1 *plus* up to seven standard texts? That’s going to be nearly £2 by the time I finish. Reckon they’ll ask me if I want to opt-in to receive marketing texts? Not according to this, they won’t:

3.2 Any personal data will only otherwise be used in accordance with ITV’s privacy policy and the Promoter’s (where different). ITV’s privacy policy can be viewed at http://www.itv.com/. ITV will only use an entrant’s personal data to send information of offers or services that may be of interest to that entrant from time to time by email, SMS or post or pass that entrant’s data to carefully selected third parties in accordance with the marketing preferences that the entrant has selected. To opt-out of receiving any marketing communications from ITV, entrants can amend their marketing preferences at any time by sending an email by going to www.itv.com/itvi/help or calling 0845 055 0011 and giving their name, email address or responding to the opt-out mechanisms in the relevant communication itself. To opt-out of receiving any further communications from third party companies, entrants should contact them directly.

So unlike Coca Cola who’ve asked me if I want my personal data used, ITV *will* use my personal data, give it out to anyone that wants it, *and* charge me nearly £2 for the privilege? What absolute rubbish. I’m sure this breaks some rules somewhere or other. Guess which providers are running this? Yep, MIG and Eckoh. Those are two names we’ve heard a lot about lately, and it ain’t been good..

Anyway, to sum up, in my opinion Coca Cola know how to treat their consumers, and ITV haven’t got the foggiest. The problem is that certain broadcasters are using their immense audience reach to try and screw as much money out of their viewers as possible – at least until the new ICSTIS Guidelines get approved and come into effect. Until them, it appears to be a free for all in the attempt to prop up falling advertising revenues by fleecing consumers.

16 replies on “Is Premium SMS dead? (part 1)”

Ewan,

Great writeup, I’m looking forward to reading the next parts. You’ve touched on the key limiting factor in these SMS campaigns – that there are some that totally screw you, and some that don’t. However, *most* consumers will not read the fine print, or chance it. I personally WILL NOT enter to win or vote on my mobile. Period. Even the Coca-Cola one. Why not? Because I’ve heard too many people getting burned by the other type.

It’s just not worth it to me. And I would guess that alot of people feel the same way. I have a close friend who organizes some of these SMS campaigns for our advertisers, and they face the same issue.

Personally, I think that the whole idea of “Premium SMS” has ruined the medium for the others who can play fair, like Coca-Cola.

Good write-up – like the screenshots! How did you do them??
You mention “premium SMS” but then go on to talk about a non-premium competition. However, if the question is
“Is ultra high cost premium SMS dead?” then I can only hope the answer is yes.
A while back, I covered a rather dodgy site in my blog at
http://www.digitaltoast.co.uk/wwwsms-txtcouk-scam-warning/
and actually contacted a few users (you’ll see how) NONE of which realised that they’d been charged a small fortune to read a “free” text.
As you (and the first commenter) note, it’s all about unscrupulous operators.
(And thick people!)

Good post. The true value of these kind of competitions/promotions is to generate brand awareness and encourage viral behaviour. Using premium SMS to earn revenue is senseless – unless you’re one of those dodgy outfits that sell “love compatibility” ratings!

Hi Jonathan, glad you liked the post. The main jist of the article was comparing premium SMS to non-premium SMS for the same sort of competition, similar value prize, etc.

The network operators themselves continually seem to wash their hands of premium SMS – if you phone up to complain about a charge on your bill they’ll just give you the number of the service provider, and leave it to you to organise any refunds. In my opinion they can’t have it both ways – either take a large chunk of money and take responsibility, or don’t offer it at all.

Re: screenshots, both Ewan and I use a piece of software on our S60 Symbian phones called Screenshot. It’s freeware by a guy called Anthony Pranata – you can grab a copy here: http://www.antonypranata.com/screenshot/

Hi guys,

Small point, but if Alex or anyone other than Ewan is writing a particular article please can you detail/caveat this. Not only will it give credit etc where it’s due, it will also allow the piece to be put in context! I base my approach to an article very much on what I know of the source….

Incidentally I think that whilst the fanta campaign is very well executed, I don’t exactly think the ITV one poses an issue, and frankly you’ve made a story out of nothing. The terms are very clear.

We’ll sort that — you can see the author in the feed but not on the site at the moment!

Hey Alex,

83463 is a WINPLC code, and 63337 is run by MIG.

So I don’t have affinity to either company (in fact the opposite could be said!), and clearly therefore I have no vested interest in favouring either of them above the other.

My point is not to criticise someone about their writing a piece on how SMS and Premium Services should ideally be run, I laud anyone doing this; it’s more that I think your article just doesn’t make a huge amount of sense.

Premium SMS is dead because you believe Fanta has run a nicer campaign than one from 2006 that you found off the back of a Google search..?

For starters you’re comparing chalk with cheese. These are not similar services. One is an on pack promotion designed to increase unit sales and to generate brand buy in & interaction, the other is a premium service which is an extension of an existing service.

It seems your argument about whether or not PSMS is dead hinges on how each of these companies has treated your ‘data’. This doesn’ really seem like a coherent way to debate the merits or otherwise of PSMS. I don’t even see how the Fanta campaign comes into this argument since it doesn’t involve PSMS. If your argument was about how brands should use mobile, then fair enough. That’s a different debate altogether.

I’m all in favour of building consumer confidence in mobile services and steering the future of mobile billing in the right direction, I just think we as people in the industry need to be extra dilligent about how we go about addressing these issues.

A far more interesting debate/campaign imho would be to ask the consumer if they realise when a network/broadcaster says ‘mobile rates *may* vary’ when calling 09 and 08 numbers that there is no *may* about it. They WILL vary. It would be interesting to find out across the board how much extra the carriers do actually charge on each call, and then work out how much money they are pocketing.

Njar,

It seems to you have drawn the wrong conclusions from my post. My main point was to compare the two forms of promotion, as they were for a similar prize value. One cost me a standard text rate to enter, and my data seems to have been handled with respect. The other cost would have cost me £1 plus up to seven standard texts.

I considered the two side by side. One is Nearly £2 to enter, with the other tops of 12p. I thought to be honest it’d be the one that cost the 12p, and spending their own money sending me texts, that would have wanted my data – not the one I’m paying for.

ITV have been losing advertising revenue for a while now – that’s no secret. Nor is it secret that a lot of bad things have happened of late with premium services, with a large amount seeming to lead back to ITV. Coincidence? We’ll never know..

At the end of the day, no one is forcing a consumer to enter these competitions, and spend the money – but they do. Then a certain proportion are peeved with the amount they’ve been charged when they get their bill in (or their prepay balance goes spiralling down). A subsection of those people then phone up, complain to their operators, then the aggregators, and sometimes the company associated with the service.

I’ve been on the receiving end of some of those calls in my time, and they’re not always pretty to deal with. People seem to be generally aggrieved that they’ve had money ‘taken’ from them, and want answers. The mobile operators are more than happy to pass the buck to the aggregators by dishing out customer service numbers like sweets, but still want their cut of the action.

Bottom line.. the industry will have to work hard to put back the confidence that’s been lost. However, we’ve also got to educate our customers – the people running premium services – on what they can honestly get away with charging for. It’s no longer a free for all and a way to make a ‘quick buck’ and retire to a nice house by the beach or whatever.. and the sooner the industry wakes up and realises that, the quicker confidence will begin to be restored.

PS: Yes your point about 08 and 09 numbers’ varying costs on mobiles is a good one. Will do a little research into that.

May be something that ICSTIS wants to pick up on at some point, when it gets a spare moment? As you say, ‘may’ is pretty much a lie – so why allow it?

Nick,

Of course, whether you have a vested in interest in either campaign isn’t really the issue … your business’s back bone is in Shorts, be they PSMS, PMMS, PVideo … so of course, you will have approached this debate with your commercial interest at heart.

Fair’s fair, if I were in your shoes I’d have come to the argument from your perspective.

It is a fact that consumer confidence in PSMS is waning. Michael Grade’s comments and the fall in ITV revenue reported today are the tip of the iceberg.

As an end user, I’d prefer to spend 12p on a raffle ticket, than £1.50 for goods of the same value I’ll have the same chance of winning.

And if people like me (who have had the MiG experience and whored my companies across the whole sector and can give Operators and Service Providers the benefit of the doubt when it comes to system failures and operator error) are having little confidence in PSMS promotions and wouldn’t (as an end user) touch them with the proverbial barge pole, then surely that is a sad inditement of the PSMS industry at present?

PSMS has its place, but whether it will continue to be the gold standard for raising competition/voting revenue is the real point of debate.

And due diligence or not, this won’t be the last time PSMS and competition entries will come under the media spotlight – there is more chance of Everton winning the Premiership this season than all CMS and voting systems/operator network delays never having a spanner thrown in the works at the peak of an XFactor/Celebrity Jungle thingy/ Endemol trite fest peak period.

They are systems, and with the best will in the world, they will fall on their bottoms again, be it through db/system/network latency or human error. And all the prior permission/due diligence in the Universe by the Service Providers can’t account for that.

ps Alex/Nick, “may” is the right word … it means “Used to indicate a certain measure of likelihood or possibility” … apologies, I’m a ex Westwood/Warwick lit student pedant lol!

I recommend txtNation. We have been using them for years now and they seem to attract the bigger partners. I cannot think of a more easy to talk with company in this space – and rust me we have been though a few! I think their mBILL product is good – m-bill.net or txtnation.com.

Premium SMS is definately Dead.
Wait till the Mobile Wallets arrive .
No business wants to give a carrier half their earn for doing nothing- If they were not so greedy -even say 10% cut then it would be worth it. Add to that the wait that is needed to get your cash ive seen over 6 months in some cases.That’s serious cashflow problems.Personlly i hapily watch as it falls over

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