Salvation Army takes five dollars by text message instead of pocket change

Short on change as you walk by the red kettle and bell ringer?  The Salvation Army is testing mobile donations in Atlanta this year. Text “TSA” to 90999 to initiate a premium SMS charge of $5 (i.e., added to your phone bill).

“We are not the most progressive movement in the world, we change very slowly. With the regular use of debit and credit cards, many shoppers are short on loose change or cash in-hand. We want to afford anyone and everyone who desires to make a donation, a user friendly and convenient means to do so.” Says Major James Seiler, Metro Atlanta area commander of The Salvation Army, Atlanta, Georgia, in Mobile Marketer.

Mobile Marketer doesn’t mention the revenue share percentages for this particular program, but a dirty secret of the industry is that as much as 60% of premium SMS transactions are held back by mobile carriers and platform providers. Until recently, this was even for most text-to-give donations.

I checked with a friend at Mobile Accord, and now this drops to 5% rev share held back (min $.25), so the Salvation Army actually nets $4.75 per donation, minus the cost of setting up and running the program. They have a hundred NPOs signed up for text-to-give.

I don’t know about you, but the sound of those ringing bells is enough to keep me away from a mall. What do I have to text to turn down the volume?

Apps are the new Singles: Betting on AppStore Revenue

Steve Jobs still hasn’t announced the App Store for Mac.

Referring to the iPhone App Store, analyst Gene Munster at Piper Jaffray estimates that Apple’s App Store could emerge as $1.2B business by 2009. Is that too low? Focusing on revenue per user, his most aggressive estimate looks conservative to me.

Look out, because the App is the new Single.

The apps that have already been shown (and those yet to be developed) are cool. People will want to try many of them before settling on the ones they continue to use. Good thing it will be easy to discover, purchase and install them. $15 in average app revenue per phone seems paltry, even if 70% of iPhone apps are free.

I think analysts missed it with their first estimates for iTunes revenues, too. They had to keeping upping them for years.

It wasn’t obvious from what was happening at the time in the digital music marketplace how ready the public was to buy from a store (and for a device) that got all the pieces right. You needed to talk to consumers in depth to look past business as usual and understand their unmet needs.

iTunes and iPod are literally the text book example of how user experience as strategy changed an industry in ways the number crunching business analysts couldn’t predict.

In the same way, there are thousands of fantastic uses for mobile technology which no one has been able to discover, develop and sell because the platform for it hasn’t been there. From the developer side, there are too many crippling limitations to development and barriers to sales. For consumers, the devices aren’t easy to use to start with, but finding, paying for and installing is a nightmare on more levels than Dante could describe.

iPhone and its AppStore are game changing because they directly address the total user experience for new mobile applications. This is a bigger change for mobile applications than iTunes was for music.

I remember the days when you bought (or copied) stacks of applications for your computer. There are many reasons we don’t still do that. So we don’t think of wanting to buy lots of small applications. Just as we didn’t used to think of buying lots of music as single songs. App Store might make you think differently. You’ll buy lots of these new singles.

I’m be willing to bet on a significantly higher figure for App Store per user average revenue in 2009. Any takers?

UPDATES
16-Jun-08:
San Jose Mercury News ran a great article by John Bourdreau today about the iPhone economy as Application developers swarm to iPhone with many good quotes and stats.

17-Jun-08:
In response to Forbes IPhone Apps Appeal, which raises many issues about usability, security and quality:

Not every release has to be a hit. User ratings and reviews like in iTunes will make it easier to discover the best apps that enhance the iPhone experience, and avoid those that need improvement. The ease with which they can be found, purchased and installed will make it painless to try several and discard any that you don’t automatically hum along with.

The best will become hits, driven by ratings, blog posts, status messages and more — no payola required (though it still has a leveraging effect to make hits even bigger).

This is a dramatic change. For the first time mobile has a viable ecosystem for new applications.

I predict that more revolution will come to the mobile industry (and to how mobile technology impacts people’s lives) through the App Store than came from the introduction of the iPhone itself.

In response to Apps First to Market will win?:
I think apps will work more like music singles. First to market in a given genre will not be an overwhelming advantage. In fact, releases will be inspired by each other and build on each other. There will be no stigma to having a new favorite next week. Ratings from other listeners, as well as what your friends are listening to, reviewers are writing about, etc., will help you decide what to tune in to.

12-Sep-08
iPhone Apps Store Growing Twice as Fast as iTunes Music

Mobile Charity: The $10k SuperBowl Ad

No, they didn’t pay $10k for a SuperBowl ad.

The Chronicle of Philanthropy reports that the United Way Superbowl spot asking users to text “fit” to UNITED (864833) raised about $10,000. Of each $5 donation, United Way got about $4.50. By my math, that’s 2,000 $5 donations from a single 10-second spot viewed by nearly 100 million (second most-watched TV show ever).

Could they have done better with what they had?

pSMS (premium SMS) allows interaction with a user which adds small charges to a cell phone bill, typically under $10. In the US, it had been limited to selling mobile content and dominated by ringtones.

According to the carrier rules, you couldn’t make a pSMS charge to deliver a real-world good a service, or to accept a donation to charity.

The rules also have mobile carriers and aggregators keeping a large percentages of the charges as revenue share. Varying from carrier to carrier and negotiated by volume, etc., you might get back only 60% of revenues, and this still requires you to do all the work of programming the service, promoting it, etc. This is as if the credit card companies charged 40% instead of low single-digits for processing charges through merchant accounts, but don’t get me started.

Until recently, the only exception to both rules had been donations to the Red Cross during disasters. Slowly more exceptions are being made, and here’s a little more detail.

I know how mobile works in detail (having run many pSMS programs) and I had questions when I viewed the spot during the game. I didn’t know enough about what I was being asked to do, how it would work, how much it would cost me (“$5” was buried in small print at the end), what the privacy impact would be (would I be solicited for more donations?), and what the benefit would be.

Even remembering the instructions might have been challenging (how many Budwiesers had the viewer consumed at this point in the game?). Why not run the instructions at the bottom of the screen through the whole spot:

Help United Way Reduce Childhood Obesity, give $5 through your cell bill.
Text “fit” to 864833. It’s easy, no hidden charges, no calls.

Did they test this ad by serving chips and beer in a living room and showing it? When doing something fairly new, a little insight goes a long way, and since you’re not after absolutely objective data, a fancy research firm with expensive scientific validation isn’t necessary. Cheap and informal work does great here. Ask folks what they thought about it and watch them while they try to do it on their phones after you answer their questions.

Anyway, since I try every shortcode program I run across, I made one of those 2,000 donations back in February. I wonder if nearly all 2,000 were from mobile industry folks. Here’s what the program looks like on my phone (four text messages):

Me: fit
864833: “To confirm your $5 donation to United Way youth fitness reply with the word YES. For more info visit: mahlp.cc/uwyf. Other charges may apply.
Me: yes
864833: Thanks for your $5 donation to United Way. Donate up to 5 times by sending FIT to 86433. Encourage others to donate. Info reply HELP, Other charges may apply.

They don’t ask for permission to text the user later. Otherwise they might follow up to see if they are interested in volunteer opportunities, tell them about outcomes with the donation they made, ask them to take action in support of some legislation, or let them know about other causes or ways to donate. Would some who gave $5 want to contribute much more if they’d been further engaged?

Also, TV is only one way to promote these mobile donations. How would they do with print? Outdoor? Or with calling for people to take out their phones at events?

The Mobile Giving Foundation
is pushing to move this kind of program from rare exception to common practice.

The carriers win when everyone understands pSMS better and sees it as applying to more than ringtones. Allowing mobile philanthropy meets that goal and creates good will, so I hope progress will be made to quickly allow many more non-profits to experiment with mobile donations. For their part, I hope non-profits work to develop and share insights from listeing to and observing those in their target audience so that any hurdles to mobile adoption are most effectively understood and overcome.

ADDED 12:45pm: Mobile Active included many more details about the Mobile Giving Foundation and vendors used in implementing the United Way program.