By Simon Bond

   ZagMe, a new service that allows advertisers to text-message consumers on their mobile phones, is now planning a U.K.-wide rollout following successful trials at two of the country's major shopping malls.
     ZagMe shoppers receive special retail offers via a text-message transmitted to their mobile phones as they enter certain areas.  
   Imagine a person handing out sales leaflets as you enter a store, but here the leaflet arrives via your mobile phone as a text message.
    Kentucky Fried Chicken carried out a campaign at one mall where mobile users were sent a simple time-limited special meal offer.
   The message was uniquely tailored to arouse the curiosity of young men. It read: "Are you a breast or thigh man? Stop in at KFC and go large for the price of a regular meal, next 30 minutes only."
    Nando's, a fast-food chicken chain, got even more risqué with the medium and sent shoppers the text message: "Tell our Cook he is a Big Cock and eat half price."
      On the whole, advertisers are using the text messages to offer free gifts with purchases or discounts.
    The trial is believed to be the first of its kind in Western Europe, and ZagMe claims that the marketing messages beamed to shoppers' mobile phones provide a response rate several times higher than that of direct marketing, and at a fraction of the cost.
    During the 12-week trial, 33,000 shoppers signed up for the  ZagMe service and an average of 10 percent of people who received an offer on their phone used it.
    ZagMe also calculates that its cost of customer acquisition was just over $4 compared to nearly $80 for an equivalent direct mail campaign.
    ZagMe argues that its customers deliver these high returns because they have taken the trouble to double opt-in to the service. 
    After signing up for ZagMe via their mobile or on the ZagMe web site, shoppers then have to send another text message once they reach a ZagMe-enabled shopping mall confirming that they want to receive offers. 
   The shoppers will receive a few messages each time they enter a participating shopping mall.
     Teenagers are most likely to sign up for the service and currently make up over half of ZagMe's customers.
    However, the most lucrative users are the 25-34 year olds who are making transactions worth on average $25 each time. 
     Messages that advertise sports goods got the best response and have led to an average transaction value of  $70.
     Still, though ZagMe is promoting the trials as a great success, there are some reservations. 
   For example, over two thirds of its customers did not bother to reactivate the service after their first visit. And these rates are expected to worsen even further as the novelty factor wears off and fickle teenagers lose interest in messages that are not offering them something for free.
    Furthermore, ZagMe has not charged retailers for the promotion so far. It remains to be seen how many of the 150 who signed up for the service when it was free will continue to transmit their advertisements when they have to pay for them.
    Nevertheless, ZagMe remains confident. In addition to signing up new malls, the company is also planning to extend the service with new features such as a text alert system that lets customers know when their friends are in the same shopping mall.

April 6, 2001 © 2001 Media Life

-Simon Bond covers European media for Media Life, writing from outside of London.

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