For this study, premium SMS included everything from voting for American Idol to “off-portal storefront purchases,” which included ringtones, screensavers and the like. Naturally, off-portal storefront purchases generated the highest amount of revenue: $214.9M or 79% of premium SMS revenue.
Other large revenue categories included voting and sweepstakes entries, with $35.4M (13%), chat/community, with $5.7M (2%), and “other,” with $17.4M (6%).
Despite the fact that off-portal storefront purchases lead out in the amount of revenue, they trailed in volume of transactions. Voting (for American Idol, etc.) and sweepstakes (Deal or No Deal, etc.) won out with 47% of premium SMS volume, or almost 35M transactions. Off-portal storefronts received 40% of premium SMS volume (29.5M transactions). Chat/community received 7% of transactions (just under 5.5M) and “other,” 6% (4.2M).
To state the obvious, although off-portal storefronts received lower volume, their higher revenue is accounted for by higher average prices. The off-portal storefronts averaged about $7.25 in revenue per transaction; voting and sweepstakes averaged about $1 per transaction.
With just under 74M total transactions in Q1 2007, premium SMS still has room to grow. Is this the future of mobile marketing, or is it just the easiest way to reach mobile users where they are right now?