Schools officials and marketers find that text messaging is...
No longa jst 4 kdz

by Robert Burke
for Virginia Business
July 2007

In April, Ara Bagdasarian’s fledgling Leesburg-based company, Omnilert, was booming. A steady number of colleges and universities across the country were signing up for the company’s e2Campus technology, which lets campus administrators quickly reach thousands of students and staff via cell phone text messages.

Then came April 16 when a troubled student at Virginia Tech killed 32 people, at a dormitory and a classroom building, before taking his own life. The first e-mail warning that a gunman was loose on campus reached students and staff about two hours after the initial shootings. By then, many students already were on campus and not checking their e-mail.

Would a better campus-wide alert system have saved lives that day? No one knows, but before that horror in Blacksburg, about 30 schools had signed on with Omnilert. By late May, the total had soared to about 100 and continues to climb. Schools in Virginia using the service include Virginia Commonwealth University, Washington & Lee University and the University of Virginia. “The priority went from nice-to-have to must-have,” says Bagdasarian, the company’s president and co-founder. “The light bulb went on for a lot of folks.”

The response of college officials to the massacre at Virginia Tech underscores an already potent trend. Consider these numbers from just one carrier, Verizon Wireless. In December 2005 its customers sent or received a total of 2.6 billion text messages. By December 2006 the number had climbed to 6.3 billion. Nationwide, an estimated 17 billion text messages are sent each month by all carriers.

Most of those are still user-to-user messages — or more accurately, one teen-ager to another — but that’s going to change. Cell phones sold today can handle text, photo and video messaging, along with giv­­­ing users some limited Web access. And people are using the technology, turning cell phones into multimedia de­-vices that can link businesses to customers or employees. In the U.S. as elsewhere, “the early users [are] mainly younger users,” says John H. Johnson, director of corporate communications for Verizon Wireless.

But what we’re seeing [is] businesses realize that there are lots of advantages in being able to send and receive messages.”

Companies like Omnilert are stepping into the breach. Bagdasarian, who used to run a Web-application company, started Omnilert three years ago with co-founder Nick Gustavsson, who had been one of his customers. The e2Campus service is their main product and costs about $1 per student per year. But the company is marketing a similar service to any client that wants to reach a large group via text messages, e-mail, wireless PDA, RSS feed or Web pages.

One product, called NewsRocket, lets media organizations broadcast time-sensitive information such as traffic alerts to subscribers. Thus a print publication can become interactive. “Some content [subscribers] want to pull, by reading, and certain content they want pushed to them,” says Bagdasarian.

Other companies are plying the same markets. Richmond-based OTAir serves “just a ton of different industries,” says CEO and co-founder Jim Washok Jr. The Virginian-Pilot newspaper in Norfolk uses the firm’s services for time- and road-specific traffic alerts. Users also can search the paper’s Web site from their mobile phones. That’s handy, for example, if you’re driving around and want to find a restaurant.

Text messaging gives consumers a way to grab more information about a product or service any time they want. A business can advertise a simple keyword, and potential customers can type it in on their phone and send it to OTAir’s short phone number — 68247 — and quickly get a text message response with information about the product. OTAir started in the real estate market and has moved into marketing, says Washok. The job-hunting service CareerBuilder.com uses OTAir’s system when it does campus recruiting for its clients. It advertises its keyword on campuses and, when students respond, offers to send them more information via e-mail.

Of course, the whole industry has to deal with a key issue: privacy. Lots of cell phone customers, already fed up with e-mail spam, have no interest in letting advertisers bombard them with text messages they don’t want. “There is experience in the cell industry of not doing it properly,” admits Washok. Mobile users in Europe — who are several years ahead of the U.S. in adapting the new technology — found themselves fending off spammers who gained access to their numbers.

But Washok says carriers in the U.S. use short codes like OTAir’s 68247 that are registered with all carriers. “The value of that is that each one of the carriers monitors what’s going through our short code all the time, so we have to comply” with rules restricting spam. Plus, it’s illegal for carriers to divulge mobile phone numbers or the user’s location. Washok says users have to want the information being sent to them, and the opt-in rules are strict. “If you start spamming cell phones, that would hurt the industry.”

Of course, advertisers think their industry is being hurt if they can’t reach millions of mobile phone users. With phones increasingly equipped with GPS technology, it is possible for companies to direct ads to potential customers based on their location. To get them to accept these ads, mobile phone users may be offered lower rates for services they already get, such as sports scores or stock prices. Or, wireless Web sites will push more ads on consumers as the content they offer begins to draw visitors.

Still the privacy issue is a big hurdle. Customers like content they can pull to them — such as using keywords and a short code — but don’t care so much for having anything pushed to them. After all, the cell phone is their private space.

One young Virginia company is trying a different approach to wireless marketing that would avoid the privacy issue altogether. Fairfax-based Outermesh Technologies wants to push wireless advertising content to consumers, but it won’t use cell phones at all. Instead, says Outermesh President Jeff Kim, consumers will get a flat, key chain-size device, called a meshBee. Retailers will have wireless routers installed in their stores, and consumers with the meshBee device will get coupons or any other marketing pitch that the business wants to deliver.

So a shopper in a grocery store can find out which products are on sale and hand the meshBee card to the checkout clerk and get the discounts automatically. It’s called “proximity-based marketing.” Outermesh Technologies hopes that the suspicion that many cell phone users have about advertisers will give them a foothold. The whole concept is still in development, says Kim. The company is recruiting clients and will do trials later this year. “We’re not targeting your cell phone,” he says. “We’re very different. We’re kind of going against that [and] we think we’re doing the right thing.”

If Outermesh succeeds, chances are there will be plenty of imitators. Or a wave of acquisitions. Omnilert’s Bagdasarian is tight-lipped when asked how many employees his privately held company has — is there a merger or acquisition in its future or is it just trying to outflank competitors? “Right now we’re in a very competitive situation,” he says.

That’s true, and it’s a volatile mix of surging consumer interest, changing technologies and a lot of new ventures. It’s a sure thing that everything in this sector will look vastly different in six months or a year. Mobile phones are morphing into devices that can give users information they want when they want, instead of when they get back to their desktop computers. Plus, “We come from a culture of multitasking,” Bagdasarian says. Mobile devices allow a user to manage a lot of tasks, no matter where they are. “It does give you a certain measure of control.”