SMS Campaigns— Is There a Future?

Last month many of us were taken back by the unprecedented success of the Red Cross’ Text Haiti campaign. The campaign has raised over $32 million to date for Haitian relief efforts, $4 million of which was raised in the campaign’s first 48 hours. This has left nonprofits from around the globe applauding the campaign and the compassion of so many donors, but also wondering how they can experience increases in donations at even small fractions of this magnitude. B2B and B2C corporations have also been asking whether there is potential for them to succeed in the world of SMS marketing, whether it is for profit or philanthropic efforts. So is there potential in the text message marketing space, where few organizations have found any success, yet one has created one of the quickest and most effective fundraising campaigns of all time?

According to CTIA -The Wireless Association, mobile users sent 1.3 trillion texts between July 2008 and July 2009, nearly double the number of phone calls made. An Advertising Age article posted yesterday raises the point of how few advertisers have been successful (or even made solid attempts) at text message campaigns despite the popularity of the medium. The reason is attributed to the fact that text messaging is considered very personal, and even the most active mobile users surveyed report that marketing messages and promotional offers and not welcome via text.

And the complications with SMS campaigns don’t end there. Wireless carriers and third party partners waived fees for the Red Cross, but most nonprofits shouldn’t expect this kind of generosity. According to Kristin Ivie, a Social Citizens blogger non-profits typically end up paying 5-10% of the amount raised back to the third party for the short code, reporting and messaging cost. “Just like there are costs for online giving services and direct mail campaigns, text campaigns require some level of effort and funds to run” she says. Donations are typically capped at $10 and there is currently no way to set up recurring donations, something which many nonprofits rely on. Additionally, nonprofits don’t receive money from SMS donations until 1-3 months after they are made.

So is there hope for SMS campaigns? Bank of America seems to think so. It recently debuted a campaign for Merrill Lynch’s Wealth Management division, asking Baby Boomers to vent about retirement and financial issues via text. This is the first SMS campaign I’m aware of targeted at this age group. John Walls, VP of Public Affairs with CTIA believes in the potential of the SMS campaign also. “It’s the only medium we have with us every hour of the day and marketers have to be respectful of that,” Walls says. “If they provide consumers with that choice of how they want to interact and can establish that permission, mobile will gives marketers a golden opportunity to market to the warmest of audiences in the most personal way possible.”

Walls has a point about being respectful of consumers’ space when it comes to text messaging. I’m noticing a trend of marketers like Merrily Lynch and the Red Cross, not texting people, but asking people to text them. It seems that both B2B and B2C companies are beginning to discover that intruding your way into a customer’s mobile phone feels invasive and can alienate your audience. However, convincing a customer to reach out to you via text (difficult as it may be) has big rewards.

The Red Cross has proven that SMS campaigns can be successful for nonprofits, even in less extreme circumstances than those of Haiti. The Red Cross began the Text2Help program back in 2005, and has raised millions of dollars through it since then. This leads me to believe that it is possible for other large nonprofits to overcome the overhead costs of SMS campaigns and successfully use them to fundraise. Over the next few months or so I hope to see more nonprofits inspired by the Red Cross, trying SMS campaigns. And I’ll be on the lookout for success stories.

As for B2B and B2C organizations, the jury is still out on the potential of text messaging. I’ll be interested to find out how Merrill Lynch’s campaign performs. Clearly, this is a challenging medium to succeed in, and I would love to see more companies overcome the barrier to entry. As always, I’d love to hear ideas success stories, or your thoughts on the future of SMS marketing and fundraising here.