March 31, 2009, 9:57 AM — The four major U.S. mobile operators have agreed to align their mobile marketing practices with a set of guidelines to be worked out with the Mobile Marketing Association, a move the industry group said will lead to a more consistent user experience and lower costs for marketing companies.
Verizon Wireless, AT&T, Sprint Nextel and T-Mobile USA all agreed to the plan, which was established with the help of major mobile content owners and aggregators. Among those were VeriSign, Neustar, Limbo and Thumbplay. The MMA's Consumer Best Practices Committee will review the first draft of the planned guidelines in early April, and the group expects a final document to be released to the public by the end of June.
Among other things, the cooperation will lead to standardized disclosures for consumers, according to the MMA. But it could also lead to more mobile marketing campaigns, because having all the major U.S. carriers on the same page should streamline the process of getting marketing content out to users. Overall, the common rules could save the mobile industry as much as US$200 million per year, the group said.
The common rules have five objectives, according to the MMA:
- promote a consistent consumer experience;
- enhance efficiencies for marketing campaigns using short codes, or numbers that users send via text message to request services or content;
- cut the time to market for campaigns;
- ensure consistent monitoring and auditing;
- cut operational costs.
Mobile advertising and sales practices came under fire a few years ago. Some consumers said they had been tricked into subscribing to services that sent frequent text messages, such as daily jokes, and were charged for each one on their cell-phone bills without an easy way to stop them. In 2005, the MMA set down voluntary guidelines that included clearly stating all the terms of a program, getting subscribers' approval before sending them commercial content, and having clear opt-in and opt-out procedures.
In the U.S., carriers have to field most complaints about the subscriber experience because charges appear on their monthly bills, so unhappy customers raise carriers' costs.
The major carriers are following the voluntary guidelines that were first laid down in 2005, but on many smaller issues they had written their own rules, said MMA President and CEO Mike Wehrs. These range from the wording of disclosures to policies established because of legal settlements, he said.
"They differed on dozens and dozens of points," Wehrs said. For example, where one carrier would require advertisers of texting services to advise consumers that "standard messaging rates may apply," another would demand the wording, "standard data rates may apply." Although most subscribers wouldn't notice the difference, each carrier has had to maintain an expensive auditing and enforcement operation to make sure its rules were being followed. The accord announced Monday will eliminate as much as 85 percent of those differences among carriers, Wehrs said.
The accord is another step toward helping consumers trust mobile advertising and overcoming its association with bait-and-switch problems from a few years ago, said Mark Donovan, an analyst at ComScore M:Metrics.
Inconsistency is one thing that makes it harder for advertising companies to work with carriers, said Manik Khanna, an associate in advertising strategy and operations at Amobee, which helps mobile operators sell advertising with all forms of media they control.
"This is just one step in 100 steps that the carriers need to take," Khanna said. Overall, they need to recognize the potential for revenue in advertising linked to applications, mobile Web pages, games, ringback tones and other forms of media, he said. For example, there is a huge revenue potential for advertising in text messaging, where most messages that consumers send use only one-third or less of the 160 characters allotted, Khanna said.
But he's cautious about the rate of progress. "Until we see it in action, it doesn't mean anything," he said.
