The History of SMS Marketing

Youth Market
SMS messages have a 160-character limit. This created a challenge when using correct spelling and grammar. Younger people adopted SMS and devised abbreviations for frequently used words and phrases, such as 'l8r' for later, and '2moro' for tomorrow. Two aspects of SMS attracted a youth audience. Parents didn't understand how to use it, plus it was free on cellphone services. Young people could communicate without the expense of a voice call. In 2000, the average number of SMS texts sent monthly was 35, but by 2010, it was 357. With the rise in usage, cellphone providers introduced charges for SMS texts, but usage still continued to rise.
Short Codes
In 2003, SMS services introduced the use of short codes that were easier to remember than phone numbers. A short code is a five- or six-digit number, and it played an important role in the expansion of SMS for mobile marketing. Users could text a message to a short code number. This increased the response rate to marketing campaigns. Applications for short codes are carefully regulated to ensure that the marketing campaign follows specified rules for message content and customer participation.
SMS Niche Marketing
Another development in SMS marketing is its use in niche marketing. Marketers build up a database of the numbers of people who have an interest in their product or service. Beauty salons can alert customers about a special offer and hotels can send texts about room rate discounts, for example. Marketers can craft the messages so that the recipient feels it is exclusive to them. This increases the response rate. It is a cost-effective marketing method because the people receiving the SMS are more likely to have an interest in the offer.
Dunkin' Donuts Case Study
In 2002, Dunkin' Donuts had seven stores in Italy. It launched an SMS campaign to bring in more customers and increase revenue. The company was new in the Italian market, and it needed a campaign that stood out. Using a combination of print, outdoor and broadcast adverts, people were invited to text a short code number. In exchange, they received an SMS voucher for a free donut. In addition, if customers presented the coupon at Dunkin' Donuts in Rome, they were entered into a draw for a Piaggio scooter. The 18-to-30 age group were the biggest SMS users in Italy at the time, and also Dunkin' Donut's target market. The campaign resulted in a 9 percent increase in sales.