[Posted by Nate Elliott]

Here at Forrester we continue to see a lot of industry excitement around mobile marketing. In a recent survey more than 60% of mobile marketers told us they'd continue to increase their spending on the channel despite the bad economy. And according to our latest ad forecast, mobile marketing spending in the US will more than quintuple over the next five years.

There's just one problem: SMS is the only mass-reach mobile marketing channel, and no one -- not marketers, and certainly not users -- seems to like it much.

More than twice as many people use SMS as use the mobile internet -- or any other mobile service, for that matter. (The mobile internet and mobile video may well become great ad platforms one day, but the fact is not many consumers use these services right now and those who do use them don't spend much time with them -- meaning there's simply not much reach or inventory.) And believe it or not SMS can actually work incredibly well for marketers. We regularly hear that SMS campaigns get response rates of 5% to 25%. Better yet, when Calvin Klein and their agency OMD sent SMS messages to a well-targeted SMS list, fully 39% of users who received the message opted in to receive a sample of CK's new fragrance.

But despite this success, marketers just can't seem to love SMS as a marketing channel. Some marketers are worried about looming government regulation. And lots of marketers tell us they're waiting for richer channels (like mobile display ads and mobile video) to come of age. But the biggest problem is that marketers are afraid users will hate them if they send SMS. According to a survey we did in the UK last year, they're right to be worried. On average, consumers are four times more likely to delete SMS and MMS marketing
messages without reading them than they are to take a moment to
consider the product or service being offered:

So how can SMS marketers avoid user backlash and generate those great response rates we hear about? I think they need to follow a simple best practice that I call the "golden rule of SMS marketing": If you can't target an SMS, then don't send it. 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. That's the reason CK did so well with SMS -- they targeted users who were most likely to appreciate the offer of a free sample. In fact, in nearly every successful SMS campaign I've heard about, messages were only sent to users who were either pre-qualified or targeted in some other way.

There are two ways for marketers to follow the golden rule of SMS marketing:

1. Only send messages to your own list. If users have signed up to hear from you by SMS, then you know they're qualified leads who won't be offended by your choice of marketing platforms. Every marketer interested in using SMS should work to build a house list of SMS leads -- with a contest, a lead form on your site, or if you're in a hurry by promoting a short code in your traditional marketing efforts like Kraft has done.
2. Get access to a highly targeted list. Blyk is one good example of a vendor who can segment and target their SMS audience, but at the moment they only operate in the UK and the Netherlands. We haven't seen many other ad sellers who can do this (if you want to recommend others, do so in the comments below) -- but I've no doubt we'll see more operators and vendors take this approach in the future.

If you want to read more about our research on SMS marketing, check out my report The Joy of Text: Using the Golden Rule of SMS Marketing in Europe or my colleague Neil Strother's report SMS Marketing: Leveraging Call-to-Action Features of Cell Phones to Maximize Effectiveness.

And as always, I'd love to hear your thoughts -- feel free to comment below, and I'll check back to participate in the conversation.

[This was cross-posted to my personal blog]