Preference Choice Publication

The Future's Bright, The Future's SMS

David Murphy

Theres a compelling logic to what Bud says, but one that many in the mobile marketing world may prefer to ignore. After all, who wants to deal in text messages when there are millions of handsets out there that can display full-colour graphics and moving video? No ad agency ever won an award for a text message after all. (No doubt someone, somewhere did. If so, drop us a line. Well be pleased to tell everyone about it.) But Bud insists 3Gs time will come.
3G will be huge, just not yet he says.

Whether you agree or disagree with Buds views, you have to concede that they are grounded in reality. mBlox is one of the worlds largest mobile transaction networks and providers of bulk SMS. It processes $500m of mobile payments and over 1 billion transactions each year, and since the company was founded in 2000, it has seen the volume of SMS traffic it handles rising steadily.
We do as many messages  in a day now as we did in a month in 2001 says Bud. 

Rigid focus
mBlox has grown to the size it is by focusing rigidly on what it does best.
In the early days, we experimented with the full-service business model and decided we would be doomed if we went that way, because we would be torn apart by the competitive pressures on different parts of the value chain says Bud.
So instead, mBlox decided to focus on the distinctly unglamorous business of bulk SMS sending and transaction processing, leaving the 12Snaps, Aerodeons and Incentivateds of this world to come up with the campaigns, while offering its own services to these and other agencies.
We had a clear business policy not to engage in any applications delivery work ourselves, because if we did we would be competing with the likes of 12Snap says Bud. By not getting involved in the profession of mobile marketing, we have been able to service it extremely well. We have 200 people doing nothing else but delivering world-class, extremely cost-effective SMS and mobile data transmission on an international scale.
People often assume that the business mBlox is in must have become commoditised by now, but Bud laughs at the suggestion.
SMS is not commoditising, not by any stretch of the imagination he says. He then goes on to describe how the company took the mess of different operators SMSCs (Short Message Service Centres) and from it, created four SMS products - Economy, Advanced, Direct Plus and Intellisend - which offer a consistent level of quality at highly competitive prices.
We invented the idea of the SMS product range says Bud. Until then people could not understand why one company was charging one price and another company was charging another. But if you have two SMS products, one of which will take four hours to deliver to some handsets and the other which will reach every handset in the UK in 20 seconds, those are two very different propositions.

Mobile TV
If 3G supporters are disturbed by Buds enthusiasm for SMS, they will likely be more encouraged by his thoughts on Mobile TV. 
I think it will be huge he says. I am sceptical of technology. When a new technology comes up, I can usually see why it will fail. It was obvious why WAP was going to fail, for example. But with Mobile TV, its hard to see why it is going to fail, because it is such an obvious and compelling user experience. There are a couple of hurdles to overcome. The cost of the data bandwidth for example. A 3-minute TV download will take perhaps 1.5 megabytes, and if youre on a 7-a-megabyte tariff you will not enjoy that, so the issue of wholesale data tariffs has to be addressed.
In fact, says Bud, its something the mobile networks and content providers are well on the way to solving.
We will see a change in the way carriers sell the bandwidth, with a move to a sender pays model he says. At the moment, the consumer who receives the data has to pay for it. This will change. The content provider will pay the tariff to the carrier but at a much lower tariff, and the consumer will just pay to watch the content.
The content, continues Bud, will have to flow through an aggregator to ensure that the bandwidth is not abused. This, of course, is where mBlox comes in.

MMS prospects
Bud is equally bullish about the prospects for MMS, again, providing one or two issues can be addressed. He says:
The problem is that the number of MMS handsets is limited and the number provisioned to do MMS is also limited. Things are changing, but it takes time. Some time in 2006, however, MMS will reach a critical mass of usage, where it moves from becoming an exciting showcase to being a relevant mobile medium. But we need to see downward pressure on MMS prices, because at three to four times the cost of an SMS, they are too expensive and do not support a business case.
Try as you might, however, you just cant keep Bud off SMS for long.
Is there anything you wanted to cover that we havent? I ask.
Yes he replies. The glorious future that SMS has for mobile customer service. Mobile marketing used to be about Drink more milk adverts. We are way past that now. Now its a question of providing added value to things that people are doing already: banking, transport, auctions, portals, supermarkets, pubs, coupons, tickets. Workaday, old economy, proven stuff.
Key to this future, says Bud, will be the humble shortcode.
Shortcodes are incredibly powerful as a content discovery tool he says. In the US, they are saying that they will be used as ubiquitously in marketing as URLs are now. Today, people think of shortcodes as a billing mechanism. They are not. They are about discovery, about getting to places, and in due course we will see an opening up of it in the way it has been opened up in the us.  Shortcodes are a very powerful means to draw consumers in and steer them to an interaction. I think they will grow more and more important in the 3G world, because the browsing experience is not particularly attractive. The user interface is too limited. But the shortcode extends the mobile user interface on to the TV, the net, the billboard.
Few would argue that shortcodes are crucial to making a mobile strategy part of an integrated whole. Perhaps a few more would question whether SMS really will dominate the mobile marketing landscape for the next 10 years. But if anyone knows SMS, Bud should. 

www.mblox.com

More interviews:

Mike Short - O2 R&D chief on the company's Mobile TV trials in Oxford. Read

Jonathan Bass - Agency boss on where mobile marketing is now, and where it's headed. Read

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