• by Mark Walsh  @markfwal, July 30, 2009

A new report makes the case for SMS text marketing on mobile phones: Texting has become pervasive, and generates response rates two to ten times higher than Internet display ads, it says. That's partly because messages are directed only at "hand-raisers," since SMS marketing requires consumer opt-in.

The study from the Local Mobile Search unit of Opus Research portrays the mobile texting population as a vast, mostly untapped market. It estimates the number of people who use text messaging on a regular basis at 154 million, or 57% of U.S. cell phone subscribers. (A Pew Research Center study on wireless broadband released this month put the proportion of U.S. cell users who send or receive text messages on a typical day lower, at 43%.

The Opus study also cites data showing that text-messaging volume has grown to 3.5 billion a day, with messages now outstripping calls in a given month among U.S. mobile users. The reach of text messaging is also twice that of the mobile Internet, estimated at roughly 70%. Although the mobile Web holds much promise for advertisers, the report casts SMS marketing as an established, ready-to-go option that also doesn't require a smartphone to work well.

"While much of the ad industry is focused on the iPhone and other smartphones because of the buzz and excitement surrounding these devices, they currently represent only 15% or 16% of total handsets in the U.S.," states the report authored by Opus Senior Analyst Greg Sterling.

The study also emphasizes that the opt-in process for SMS marketing offers translates into more targeted ads or promotions, and ultimately better results. It points to broader research from Insight Express and Dynamic Logic this year showing that mobile advertising performed better than traditional online advertising across brand metrics including unaided awareness, ad awareness, brand favorability and purchase intent.

Still, neither marketers or mobile users seem to care for SMS marketing, despite reports of double-digit response rates. For marketers, the reluctance arises at least partly from the prospect of government regulation. This spring, U.S. Senators Olympia Snowe (R-Maine) and Bill Nelson (D-FL) introduced legislation to curb unsolicited text messages by providing additional consumer protections via the m-SPAM Act of 2009.

Marketers also don't want to risk alienating mobile users with unwanted messages. To avoid that problem, Forrester Research recently advised advertisers in a separate report not to send an SMS message if it can't be well-targeted.

"After all, when your marketing is targeted well, users stop thinking of it as marketing and start thinking of it as content, or a service," wrote Forrester analyst Nate Elliott on the firm's interactive marketing blog. He recommends that companies build a list of qualified SMS leads through contests, Web site forms, or by using a short code in traditional marketing efforts.