GUEST BLOG: How America went text mad to donate to Haiti

By Bob Bentz, president of Advanced Telecom Services
When it comes to disaster relief for earthquake victims in Haiti, Americans are phoning it in at a record pace. As of Tuesday, January 19, more than $27 million had been donated to the Red Cross thanks to a simple text message that Americans have embraced like none other that has come before it—Text HAITI to 90999.  When a consumer sends a text message for Haiti, his cell phone bill incurs a $10 charge.  This is certainly much easier and more spontaneous than putting a check in the mail.

And, it hasn’t stopped there.  The Red Cross is still accepting text message donations for Haiti so it’s impossible to know where it will all end.  The Red Cross has acknowledged just how important the text message donation program has been; 20% of its entire donations for Haiti have been received via text message in the United States.

The Haiti earthquake relief program operated by the Red Cross has far surpassed any previous use of premium SMS technology for making text message donations.  Thanks to a bevy of announcements by celebrities and first lady Michelle Obama in popular shows like 24 and the National Football League playoff games, the text for Haiti program has been a smashing success.  In fact, Red Cross officials confirmed that it was receiving a half million dollars worth of donations via text message per hour during the NFL playoffs.

President and Mrs Obama visited Red Cross headquarters in Washington earlier this week and discussed the premium SMS program. It was actually the Obama administration that first recommended text message donations as a fundraising tool for the Red Cross.  The Obama administration should know a thing or two about the power of mobile marketing—text message marketing played a vital role in Obama’s march to the White House in the 2008 election.

While President Obama’s use of mobile marketing was unprecedented in terms of the political arena, the amount earned by the Red Cross is beyond unprecedented.  “I need a better word than ‘unprecedented’ to describe what’s happened with the text message program,” said Roger Lowe, of the Red Cross.

The amount raised by the Haiti earthquake premium SMS campaign shows just how far text messages and premium SMS has come in America.  Following Hurricane Katrina in 2005, for example, a similar text message donation program raised just $250,000.

Premium SMS, however, is more than just a convenient way to make a non-profit donation.  You are most likely familiar with premium SMS from television shows like ‘Deal or No Deal’ which allows viewers to participate in the television program from home.  Perhaps, you have also seen some late night advertisements that enable you to purchase cell phone ringtones or receive horoscopes by paying via a premium SMS program.

There are the typical applications like horoscopes, TV newscast voting, and sports handicapping picks that can be used by premium SMS.  Many of these applications were the early money makers twenty years ago when 900 numbers provided an equally convenient billing mechanism to the landline phone.  There are also newer applications like internet access and computer technical support.

If you have information that you want to sell to the 270 million cell phone users in the United States, here’s how premium SMS works.

First, you need to contact a mobile marketing service bureau to provide you with the premium SMS short code.  The short code is the abbreviated phone number that is used for mobile marketing programs.  You will also need to secure a keyword with that short code.  In the case of the earthquake relief program, “HAITI” is the keyword and “90999” is the short code.

You can choose a price from as low as .10 per text message to $10.00.  In general, the carriers take 45% of the price of the text message.  Most service bureaus will remit 50-70% of the net proceeds after the carrier’s share to the sponsor of the program.   Expect to pay a fee to start the service and a monthly fee too.  You will obtain your share of the transactions in 90 - 120 days after the end of the month.

While the costs, especially those attributable to the cell phone carriers, may appear to be high, it should be noted that most of the carriers and the service bureau have agreed to forego its share of the profits for the Haiti program.  When it comes to a disaster in a poor nearby country that most of us know very little about, cell phone carriers and the American public have shown that they can be extremely generous.

Phone it in America. 

Text HAITI to 90999.

Bob Bentz is president of Advanced Telecom Services—a company that provides mobile marketing services to advertising agencies, advertisers, and media.  As part of its commitment to the earthquake relief efforts in Haiti, Advanced Telecom Services will donate 20% of its revenue received from premium SMS donation programs in February.

Charity begins (and ends?) with mobile

One of the big topics omitted from everyone’s ‘what’s gonna be hot in 2010’ lists this year has been charity donations using mobile. 2009 already saw mobile increasingly playing a role in UK TV charity shows such as Comic Relief and Children in Need, but within the industry, these were rather viewed as a way of slowly re-introducing text to TV after the raft of scandals back in 2007/8.

But one massive earthquake and suddenly we can see that the humble consumer really does see the mobile as the tool of choice for delivering charity donations. For the first time ever, the Red Cross has seen digital donations outstrip those done through traditional channels (phone calls, banks etc) for the appeal for help for Haiti.

This is an interesting development and raises some interesting questions. For instance, has it become more popular simply because mobile is now more zeitgeisty than ever before? Did the statement that no one was going to take a cut of the donated amount encourage people to use mobile to donate? Or, even though it cost a few pence in network charges, people just like the idea that they can pick up their mobile and donate money seemingly immediately while watching the news?

Personally, I think that its all three: consumers now treat mobile in a very different way to how they did just a year ago. They do use it to socially network while watching TV (even I do it now and I'm 98 next birthday). They also see mobile as a way of paying for things, so long as it is below a certain value. I also think that the stigma of the phone voting scandals has gone. Well, the whiff of scandal has, some of the stains remain, but people can live with stains (again, being 97, I have to).

So we are going to see a boom in charity donations via text this year, but that’s not necessarily a good thing. Back in July 2009 we ran a piece in the Telemedia360 newsletter about how the success of charity donations was a bit of a double edged sword. Doing it is great and it’s a role the mobile industry should play, but it does actually cost money to develop and deliver the charity services and companies in the value chain (all bar the network operators if they apply ‘standard text rate will apply’ coding) lose money on it.

So it’s ok for those big, high profile events such as Children in Need and for sudden international disasters such as the tragedy in Haiti – we all need to pull together – but it could become as unwelcome as high street chuggers (“charity muggers” that stand in the high street and practically beat you into submission with their Help the Aged clipboards).

If every charity wants to start using text or WAP as a donation channel then the telemedia industry has to look closely at how this is made to work. Already charities are cold calling people at home (ironically I, a 97 year old, was called by Help the Aged just the other day and asked to set up a standing order over the phone: they should be helping me I croaked and hung up). If they are going to start texting its going to get messy.

And any proliferation in text donations is going to necessitate a charge by service providers for doing it, which then starts the text rip off rumour mill running again.

But I am getting ahead of myself. Currently, even though there is a huge attraction to mobile charity donations, the issue of mobile billing is still a problem. One company, which wishes to remain names currently, is conducting some research with a cancer charity in the UK centred around mobile donations, and has found that, even with a really well designed interface and a clear DONATE NOW button, 90% of users drop out at this stage.

Payforit3.0, which is due to hit third party mobile services with the impact of a wet flannel half heartedly flung against the bathroom mirror in March is rumoured to also feature within its slickly redesigned interface (apparently it has colour and a logo and everything: the kids’ll love it!) a more user-friendly charity donation button.

But with the huge lack of marketing and publicity that still surround Payforit, it will be interesting to see whether this has any impact on things. So perhaps it’s not so surprising why so many people left charity donation off their hot for 2010 lists: maybe it will be a victim of its own success… (TO DONATE TO ‘VICTIMS OF THEIR OWN SUCCESS’ TEXT SUCKER TO 2020023837737774738747)

10 for ’10: T360’s predictions for the hot topics of 2010

Hello and happy new year. What with it being the first working day of 2010 and I being nothing if not clichéd, it seems fitting to kick things off with a look at what is going to be hot and happening in 2010 for the telemedia industry.

Everyone who makes predictions is trumpeting how they all got it right at the start of 2009 about how apps were going to be the big thing of last year. Looking back through most of the material I have from then, many soothsayers did indeed predicted “growth in apps” but none as far as I can see really saw how significant they were going to be.

Now, before you all get uppity about it, no apps aren’t that special in themselves I agree. What is significant about them – and about the mobile industry’s other bet noir, the iPhone – is that it changed the consumer’s perception of what is possible with a mobile phone. The iPhone, I believe, ushered in the mobile web era. The app has made doing interesting, multimedia stuff on your phone much easier. Nokia didn’t make this happen. Vodafone didn’t make this happen. Apple did. And, whether the hype distorts its true success or not, the iPhone and the app are the key mobile things to happen in the last decade, let alone the last year.

And if you don’t believe that the development of cool mobile services shouldn’t be left to network operators, then check out today’s launched of the Nexus One, the latest, and best, Android phone. Disappointed with how lacking Motorola’s stab at it was, Google has ‘personally’ overseen the development of Nexus One with HTC and has, by all accounts developed a much better competitor to the iPhone.

Anyhoo, what does this all mean for 2010? Well the app will continue to shape how mobile works I think, in quite a profound way. Apple’s dominance of the apps market will be challenged, mainly by Android and GetJar in 2010. The issue of app store fragmentation will also play a role in how 2010 shapes up, but before you know it, it won’t be about the store, it will be about where to get the best apps, which is why GetJar, the independent apps store, will I believe have a great year in 2010.

But the real impact apps will have is on how they will reshape the media’s approach to mobile and what this then spawns. So while apps are number one on my list of 10 for ’10, the media and billing come in at joint number one rather than two and three respectively.

Why? Well 2010 will be the year the media – particularly the print end of the spectrum – becomes multi-media and it will achieve this through apps. 2010 is also the year the media will start to charge for its ‘online’ content and services and, again lead by apps, will look at how micro-billing will play a part in that.

We have already looked at how mobile billing has quite a role to play in how media monetises its content, but the kind of mobile billing that will succeed is still up fro grabs. Payforit and other operator led WAP billing tools are no way guaranteed to garner widespread use. Instead, as the media industry turns to apps as the easiest way to engage people – forget for a minute whether apps are right or not, they are what people want – so in-app billing will become a key tool in how media monetises itself in 2010.

This will also lead to another, less welcome, trend in 2010: in-app billing fraud. Remember diallers? Well unauthorised in-app billing could wreak similar havoc on this fledgling industry and could well, if not regulated properly, become the PTV scam of the 2010s… and we don’t want that now do we?

There is also the worrying trend that, with recession biting the telemedia sector, some of the old scams are rearing their heads again. So this is another of my predictions for 2010 – regulatory chaos. Is PPP up to the job? Will it be able to move fast enough to encompass these changes in its next code? On past form, no it can’t. The next decade is going to have to see a radical rethink of media and telemedia regulation as, to my mind, what is in place now no longer reflects the world we are about to live in.

What else are we going to see in 2010: well the rise of  telemedia in retail will become apparent. Couponing, ticketing, contactless payments, m-wallets, mobile banking and even peer-to-peer mobile cash transfers will all come in to their own.

Purchasing using text or the web from a phone from a poster advert will be the big thing of the latter half of this new year, I think. Contact-less payments will take longer because of the inherent infrastructure issues… unless of course people wise up to the fact that there are prototype apps out there that can turn a phone into a contactless payment terminal, obviating the need for expensive infrastructure.

And it won’t be just a smartphone thing either. Stickers that turn the phone into a payment tool are already in use in Germany. Look out for more of these in the UK and the rest of the world this year.

Other techie developments to look forward to include augmented reality, which will add a whole new dimension to social networking, GPS and finder apps and even interactive TV.

This platform interaction marks another trend for 2010, which will see a greater degree of cross platform offerings hitting the scene – and along with it, a rise in issues of who actually has the rights to do what with what content and where.

Another trend that all this will unleash starting in 2010 is operator network sharing, driven by the fact that all the media services being piled on are crippling network capacity and infrastructure investment is tough in the current climate. Look out for more networks sharing infrastructure as demand grows.

So that’s it. 2010 looks like being quite a year for the telecoms and telemedia sectors, so all we have to do is get on with it…