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How Much is a Shortcode Worth?

David Murphy

Jonathan_bass_incentivated_1The shortcode might not yet be ubiquitous, but it is becoming more so, especially with the initiatives from some of the broadcasters to encourage advertisers to include a mobile response mechanism in their TV ads.
Before Christmas, both Channel 4 and ITV launched mobile offerings aimed at their advertisers. For 10,000, Channel 4 offers a keyword and shortcode, which can be used in a TV ad for up to 28 days, with an upper limit of 10,000 responses. ITV offers a similar package, priced at 8,000.
But Jonathan Bass (pictured), Managing Director of mobile agency Incentivated, says these prices are too high. Incentivated, says Bass, charges around one third the price of the Channel 4 offering for a managed campaign, with a dedicated off-portal mobile Internet site, making the comparable cost per response much lower, and giving the brand stand-out from the channel itself.
We offer two solutions says Bass. "A DIY package to ad agencies that lets them run five simultaneous campaigns a year for 5,000, with no limit on the number of responses. Or, if they want an account managed campaign, similar to what Channel 4 and ITV are offering, the cost works out at 3,236 per campaign. If you assume a 3-month campaign with 5,000 responses, that gives you a cost per response of 65p with us, 1.60 with ITV, and 2 with Channel 4. On 10,000 responses, it equates to a cost per response of 32p with us, 80p with ITV and 1 with Channel 4."
Bass does not claim that Incentivated is unique in this respect. He points out that mobile agencies set their prices some time ago, but most, he believes, have kept them at this level in order to encourage advertisers to start using the mobile channel.
We are absolutely satisfied by the margin we make on the prices we charge, but I just cant see where the broadcasters are coming from says Bass. "Their traditional ad revenues are under threat, as everybody knows, and its good to see them looking at mobile, but if this is going to take off, you cant charge someone 10,000 to dip their toe in the water.
Bass advises advertisers who are thinking of running a TV campaign that incorporates a mobile response mechanism to talk to mobile agencies. To encourage take-up, Incentivated is offering to manage the first campaign for any company which has not previously used the agency for mobile direct response on a TV ad for half price.
Responding to the criticism, Peter Birch, Head of Interactive at ITV, told Mobile Marketing that the companys main aim was to make things simpler for media planners and buyers.
The average planner does not have the time to spend hours on something thats worth a tiny amount of money said Birch. They also dont want lots of relationships with lots of different suppliers. Our package makes it easy. Its an airtime and mobile one-stop-shop."
Birch also pointed out the range of services included in the ITV Mobile package. He said:
They get design, production, compliance, and we manage the response format for them, plus they get access to our WAP portal. They also get the 63330 shortcode brand, which millions of people have used over the last few years.
On the issue of cost, Birch said he would be jolly surprised if advertisers did not achieve at least the 10,000 responses that are included free, which would make the cost per response 80p, with each additional response charged at just 3.2p.
And this is just rate card said Birch. If we have someone spending a lot of money with us on TV advertising, we have the option of giving the mobile package away free of charge. How many agencies can do that?
Channel 4 could not be reached for comment.