Traditional DMers Wary of Text Message Prospecting
The legal issues involved in text messaging, also known as short message service, are twofold, said Ian Volner, an attorney at Washington law firm Venable LLP, which serves as counsel to the Direct Marketing Association on teleservices issues.
"Under the Telephone Consumer Protection Act and Federal Communications Commission rules, you cannot make a phone call of that type -- whether a text message or an e-mail -- without prior express consent of the consumer," he said. "Under the part of CAN-SPAM regulated by the FCC, you also have to get consent."
The types of consent allowed under the regulations are written and oral.
"Written consent includes e-mail or Web-based consent," Volner said. "What the FCC has said is that oral consent is permissible, but you had better be able to prove it. You really have to tape it because unless the consent is clear and conspicuous, there is going to be unpleasantness about it."
At least two list management firms say they offer files of consumers who were properly opted in to receive third-party offers by text message.
Kroll Direct Marketing, Plainsboro, NJ, introduced the Mobile Information Access U.S. Opt in Text Messages file last fall. It contains 1.3 million U.S. cell phone users who bought premium wallpapers or ring tones for their wireless phones from various Web sites and opted in to receive third-party promotional offers via text messages. The file is selectable by gender, age range, brand of cell phone, cell phone capability, carrier and major market/city. The list owner is MIA, New York.
Aside from the initial opt-in process, another step exists before third-party text messages go to the file, said Leland Kroll, president of Kroll Direct Marketing.
"The deployment service bureau has the relationship with the telcos, and they're the ones that have to approve the offer in addition to the list owner," he said. "They make sure that the recipients are opted in, and they want to see what they opted in to."
Kroll Direct also manages a file of 10 million international names, he added.
A file that hit the list rental market this month is the Text Messaging Opt in File managed by The Rich List Co., which claims to have 55 million U.S. cell phone users opted in for third-party marketing via text messaging through their wireless carriers. The file also offers millions of international names.
The files each have restrictions in terms of types and frequency of messages.
Rich List's restrictions are "no violence, no illegal activities, no sexually explicit messages, no pornography and no hate mail," said Joanna Dymond, vice president of sales and brokerage at The Rich List Co., Wainscott, NY. "We do not ever text message more than twice a month."
The file managed by Kroll Direct has similar content restrictions and allows three to four text messages a month.
So far, no traditional direct marketers have tested the Kroll Direct or Rich List files. Just after the Rich List file entered the market, Dymond said, she got 10 inquiries and count requests, but no orders yet. Entertainment-oriented marketers have tested Kroll Direct's file, but traditional DMers have steered clear.
MIA has several case studies on text messaging campaigns, including one to create buzz for Coca-Cola Zero and announce its availability at 7-Eleven stores. Text messages went to 96,000 consumers in Dallas, Chicago and Orlando, FL. Another text messaging campaign MIA did was to 66,000 females ages 12-24 to promote the Fox TV show "The OC" and offer memberships in the "OC txt club."
"It's an emerging area, but quite frankly it's an area that people have been more inquisitive about rather than jumping in with both feet," Kroll said. "Text messaging overseas is huge, but in the States it's been much more cautious and hesitant on the marketer side."
According to the Mobile Marketing Association, there are 1.4 billion cell phone subscribers globally with 350 billion text messages exchanged monthly.
A DMA executive said its members have yet to engage in text messaging as a prospecting tool.
"Most marketers we've talked to are staying away from it because they are really concerned about the reaction to receiving any type of commercial messaging on a device for which they may have to pay to receive the messages," said Pat Kachura, senior vice president of ethics and consumer affairs.
Still, Kachura said the DMA's position is that text messaging is permissible with proper consent, but she stressed the need to opt in consumers for third-party offers.
Volner agreed that some cell phone companies charge for incoming text messages. To avoid that complication, texting expenses for using The Rich List Co. file are taken care of in advance so the consumers do not pay, Dymond said.
One privacy advocate questioned the potential of marketing via text messaging.
"It's not necessarily a bad thing. I just don't know if it's ever going to be that significant a channel, just because I think that people do not want to be bothered on their cell phones," said Alan Chapell, president of Chapell & Associates, a New York privacy and marketing consultancy. "The companies that are getting into this space are doing so very, very cautiously, and I think that's a smart thing."
Kristen Bremner covers list news, insert media, privacy and fundraising for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters