How to make money on wireless ads that aren't spam

This is a really good write-up from Harvard Business School which describes how one company (FlyText) made money off of mobile text messaging without resorting to the spam tactics which clearly anger and alienate customers.

The general idea was that sending unwanted messages to users would just make them angry and defeat the purpose of what you were looking for. They worked around this by creating groups of brand loyalty who would then get text message updates about their brand ("brand" in this case surely had to be a very broad term and also include people, who are also technically brands - just not in the legal sense - they fall under the larger brand of the companies through which they work).

I find this absolutely fascinating for two reasons - both of which would make me think that this just wouldn't work at all:
1) People hate getting this sort of thing in their email.
2) I know for a fact of one desktop application which is like a toolbar and does essentially the same thing - it alerts you to things happening related to a person/brand/identity that you want updates on.

The idea is to cut through all of the clutter of email and spam these days and get out information to people that actively request it.
But the desktop thing bombed - and when these things bomb the first thing they do in order to recoup costs is to start spamming on a wide path - going against the idea of what they were originally intending to do, but desperate for cash.

So I find it very interesting that it seems to work very well with the mobile market but not with the desktops. I am curious if that is due to the nature of the desktop/wireless worlds, or if it is more of a geographical/political/cultural thing since the wireless world is extremely non-American and the desktop world is still largely American.
Perhaps this method just doesn't work well with Americans - if that is the case, I am very curious as to why that is.

Sounds like something Malcolm Gladwell would write about.

Posted by Eric at February 28, 2005 01:53 PM | TrackBack