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FMCG (fast moving consumer goods) companies in Ukraine are now reaching their customers by sending advertisements in the form of SMS messages, allowing them to reach the country’s 6.8 million mobile users.
Although advertising via SMS is widespread in the West, the trend has barely been visible in Ukraine until recently. However, large multinational and local companies are now showing growing interest in projects aimed at marketing their brands via mobile content services.
Content provider company Celline, Ukrainian television channel STB and liquor producer Olimp have recently teamed up to sponsor an SMS contest for viewers of the Italian soccer league. The contest’s grand prize is a trip to Italy. After sending in their game predictions via SMS, contest participants will receive a text message confirming their participation in the draw and a “good luck” message from Olimp.
“Celline’s SMS text campaign for Olimp has produced over 200,000 text responses in its first month,” Celline CEO Maxim Dinenberg said. “These are great results, considering that STB is not the most popular channel in Ukraine.”
Nazar Grynyk, Celline’s marketing director, said that each SMS contact with a member of the target audience costs brand owners between two and five cents.
“This is nothing compared to other types of advertising, where the cost of contact is 10 to 100 times higher,” he said.
Dinenberg said that contest participants are not bombarded with unwanted spam messages because they actually request the SMS messages, and pay about Hr 2 to receive them. He added that the efficiency of SMS messages is very high, as 99 percent of those receiving SMS messages read them.
According to Dinenberg, the SMS contest developed by his company for Olimp is unique in Ukraine.
“For the first time in Ukraine, a television channel, sponsor and content provider are teaming up for an SMS contest,” he said. Earlier, large multinationals only used mobile operators to promote their products.
For example, Dinenberg said, Samsung Corporation sent SMS messages to UMC subscribers to promote one of its products.
Oksana Sobol, UMC’s mobile operator content manager, said that premium rate services, such as logos, melodies, color pictures, polyphonic melodies, Java games, chat and dating services and SMS contests are developing very rapidly.
“They display constant growth every month, with several seasonal peaks throughout the year and during major holidays,” she said.
With about 20 mobile content provider companies operating on the market, only three or four of them, such as Celline, Solvo International and SPN, have acclimatized to the trends in mobile advertising.
“Most content providers on the market deal in mobile voice services, such as chats, dating, adult services and SMS logos,” Dinenberg said.
The major players agree that the main trend is the evolution in customers’ needs.
Unlike their competitors, Celline offers more than just technological solutions.
“Today a project is regarded as successful if it solves specific tasks set by a client company, not just technological ones,” Dinenberg said.
“If we had had to offer Olimp just a technological solution, the contest would probably not have been seen yet,” Grynyk said.
UMC actively cooperates with content-providers, and also offers its own special services. Among them are Nomeromania, which took place in summer 2003 and provoked remarkable responses from subscribers; UMC SMS Championship, which has become a tradition and has taken place two autumns in a row.
“Great successes have already been mutual projects with TV channels,” Sobol said. “The latest one was implemented in cooperation with 1+1 in February.”
Within this project, subscribers have the opportunity to participate in SMS-contests connected with the three popular soap operas Poor Nastya, Undina, and Sex and the City. The prizes include cars.
Dinenberg, who previously worked for four years at a mobile content company in Israel, said that in Central Europe, where mobile phone penetration rates are approaching 100 percent, value-added services and content such as ringtones, quizzes and mobile chats account for 10 to 17 percent of mobile operators’ revenues.
With about 11 percent of mobile penetration in Ukraine, a big boom is expected in the near future as the mobile user base expands. Mobile phones still remain a luxury for many Ukrainians.
Grynyk added that mobile content services in Ukraine are showing 200 to 300 percent growth every year. A majority of local mobile content companies are working with the country’s top two operators: UMC and Kyivstar.
“But we don’t exclude Golden Telecom and Digital Cellular Communications as potential partners because they have a tiny client base,” Dinenberg said.
Like any business, the opportunities for content providers depend to a significant extent on the terms and conditions offered by mobile operators.
Grynyk said there are enormous variations between tariffs for value-added services.
“In our company, for example, the voice content services tariff is Hr 2, while in other content providers it is at least 20 percent more expensive,” Dinenberg said. “We are not going to charge more because we want to create the demand first.”
In Israel, he said, the prices of mobile calls and content services are equal.
Currently, mobile content providers pay mobile operators from 50 to 60 percent of revenue for access to their subscribers.
Grynyk said that his company intends to focus on the popularization of value-added services among mobile users.
“The mobile phone is becoming a personal commercial device as well as a personal communication device,” he said.
Dinenberg added that people need to be taught to use value-added services, “and here we are planning to start first with promoting new services.”
Grynyk said his company is working on a number of marketing campaigns for FMCG companies, but would not name the companies that had signed up as advertisers.
“Those mobile users who register for a promotion will receive special offers, such as discounts, prizes, special promotions, and even job offers,” he said.
Sobol said that his company expects SMS and interactive voice response (IVR) services to continue dominating the market over the next few months, with subscribers’ interests focused mostly on downloadable content, contests, and interactive services.
At the same time, she said, the share of WAP and MMS premium services is growing rapidly.
Emerging technologies enable a whole new range of premium services, most of which have proved to be extremely successful in European countries. These include services based on streaming video (video news, music clips, short films) and LBS (localization and navigation services).
Grynyk agrees. Soon SMS and its successor, MMS, will be major mobile content, marketing and commerce tools in Ukraine, he said.
“I see the time coming when having a mobile phone connected to one of the major operators will offer vast economic opportunities for users: from receiving a discount, free product or an invitation to a club party from a favorite brand to job hunting via SMS.”