Mobile Marketing (SMS): The Definitive Guide to Short Codes

SMS Text

The youth has spoken and their preferred method of communication is text messaging.

Text ‘Perks’ to DUNKIN (386546) and you’ll make it a little less expensive to get your caffeine fix.

Text ‘Start’ to ANGEL (26435) and expect exclusive discounts via text message on panties and the like from Victoria’s Secret (let’s not tell Mrs. Leonard).

I’m sure you’ve seen hundreds of these text messaging campaigns and never knew what these funky 5 or 6 digit numbers (4 digits on rare occasions) are, or where they come from.

Well, here’s your answer.

They’re called ‘Short Codes’ and they come exclusively from the Common Short Code Administration. They work in the United States only and are exclusively used for SMS (text messaging).

Short Code Initial Costs

Dedicated Short Codes can be leased for a period of 3, 6 or 12 months. They cost $500 per month for a ‘Random Short Code’ or $1000 per month for a ‘Selected Short Code’. Much as the names indicate, a ‘Random Short Code’ is completely random in selection while a ‘Selected Short Code’ is specifically requested (reference the above examples of ‘DUNKIN’ and ‘ANGEL’).

If the price scares you, there are ‘Shared Short Codes’ which are much less expensive. I’ll go into them in greater detail in a later post (or ask in the Comments and I’ll gladly respond), but you can basically buy a keyword(s) on a Short Code hosted by another company. It’s like renting space on someone else’s Short Code and it’s a perfect solution for small businesses.

Short Code Implementation

The company or individual that provides the content for the CSC (Common Short Code) is effectively known as the ‘content provider’. Typically these are advertisers, media companies, consumer product companies, advertising agencies, promoters, game providers or ringtone providers. Most likely, if you are reading this and learning how to implement a SMS campaign, you are a content provider.

The content provider will need an application to route messages through. A content provider can choose to develop and host an application on their own, or may choose to use an ‘application provider’.

According to the CSCA:

There are a number of Application Providers that specialize in software development and hosting for mobile messaging applications. In addition to technical expertise, most application providers provide content providers with expertise on the best methods and techniques for maximizing participation and success of CSC applications. Most application providers are specialists in a specific type of application, such as voting/polling, marketing, or gaming.”

Once the application is in place, it must be connected to the individual wireless carriers. The content provider can choose to negotiate individually with every carrier, but that can prove to be quite a daunting task. For this reason, the next service needed is that of the ‘Connection Aggregator’.

The CSCA defines ‘Connection Aggregators’ as follows:

“Connection aggregators have authorized connections to multiple wireless networks; they also maintain the security, technical, and service level requirements of each wireless network. Connection Aggregators may or may not provide connectivity to all participating Wireless Service Providers. To determine connectivity consult the Wireless Service Provider directly. A Connection Aggregator may serve as the Application Provider or vice versa.”

In summary, you provide the content, build or buy an application to effectively distribute it, and find an aggregator to plug it in.

It’s important to realize that each individual carrier must approve the use of your Short Code for their subscribers and may not do so if you attempt to engage in porn, gambling, or anything else they deem offensive.

Short Code Campaign Examples

The beginning of this post referenced two clear examples of a retailer effectively using a CSC as a call to action (Victoria’s Secret and Dunkin Donuts). To show you some of the possibilities for other Short Code campaigns, I’m going to use Google SMS as an example (it’s free and it will change your life). Keep in mind, companies can create these same applications with their own short codes.

Now, if you want to see how this works, get out your phone and check out these examples. They’re all free, but your carrier will charge you the same as with any regular text message (ie: Standard Rates Apply).

Text ‘EXPE’ to GOOGLE (466453): Note: Any stock symbol works but I’ll pick Expedia since I work for them and, well, they give me stock.

If you choose not to follow along, take my word for the fact that you will receive a text message with a stock quote by doing this.

Can you see how this application, or service, could benefit a company like Charles SCHWAB (724922 – Available)?

The same way that a stock quote is returned via text message, this application can be tweaked to return virtually any response to specified keywords.

For example, text ‘Phillies’ to GOOGLE (466453) and you’ll get the Philadelphia Phillies most recent score and/or next scheduled game.

Companies like LOWES (56937 – Available) or Exxon (39966 – Available) could easily have an application that simply returns a text message with their nearest location as a response to someone texting a zip code to their Short Code. They could also attach a coupon to sweeten the offer.

Additionally, they could use this simple offering much like “DUNKIN’ or ‘ANGEL’ do and create a call to action from here. Users could be encouraged to respond with an email address or simply opt in to receive mobile messages.

To pick on LOWES some more, they have one of the most popular NASCAR drivers (Jimmie Johnson #48) and still haven’t figured out a reason to even own their Short Code. Are there other marketers out there that agree with me that LOWES not owning their brand, if for no other reason than protection, is downright foolish?

For companies that want to actually profit from individual messages, the $.99 per text message advertisements you see are what’s known as ‘Premium SMS’. Typically the wireless provider receives anywhere from 40-60% of the per message fees. Subscription models also exist (ex. -Major League Baseball) and can range anywhere from .49 to 19.99 per month.

Premium SMS often consists of ring tones or wallpaper (MTV integrates this well into music videos) and voting (VH1 can be seen with ‘I Love New York’ driving users crazy with costly voting options).

Hopefully this has offered you some insight into how the world of SMS works. There are great opportunities here for savvy marketers to really offer great brand association and value added services to their consumers. SMS can be a great way to interact using the communication method preferred by the youth of the world.

Are you wondering if something can be done, or created, through a Short Code? Do you have more questions about how this works? Do you see opportunities here or is this an area you think is a dud? Please comment below and get the conversation going.

Matt Leonard currently directs SEO, SEM and Revenue Management within the Trip Advisor Media Group, proud parent of a new family vacation site. You can follow Matt Leonard on Twitter to keep up with his updates.

Matt Leonard
Matt Leonard currently directs SEO, SEM and Revenue Management for Cruise Critic, the world’s largest cruise site and part of the Trip Advisor Media Group.... Read Full Bio
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  • Carter Edsall

    Thanks for addressing a timely topic that I previously knew very little about. Between SMS campaigns and downloadable apps, mobile marketing will be garnering much attention in the months to come. The technology invites endless possibilities, but consumers outside the youth market may be a tough sell. Definitely worth keeping an eye on the bohemoth retailers as they dive in.

  • Tag44

    Thanks Matt for the post and for sharing the info.

  • Manny Ju

    Great post! Thanks for helping to illuminate to the general public all the hidden costs in SMS messaging. Good examples too.

    In a follow up post, can you please also discuss the per-message costs that the content providers must incur. Marketers must pay not only for the short code, but also each message they receive and send using that short code.

  • Deb Ward

    Really interesting. I always wondered how that worked. I’d like to know more about how small business can use these codes by “sharing.”

  • J Farr

    Thanks for the great explanations! We find ourselves as teachers sometimes teaching business owners exactly what you’ve blogged about. Give it another year and everyone will be using a short code in some fashion or another.

  • Adil Rehman

    This is great work and very good information on codes. This post is really helped me to learn about sms marketing, although it is basic but, as I am new to this field it will help me a great deal in future.
    Thank you

  • Neale Pritchard

    very interesting, but did I get it that these codes only work in the US? If I am correct can anyone say when they will work in the UK……..and if I missed the fact that they do then can anyone tell us more about “sharing” as Deb has asked above??

  • Nick from Canada

    SMS has been big in Europe and in Asia and it’s just about to become big in North America. Problem is, carriers in US and Canada are greedy. Companies are now charging both incoming and outgoing messages. This is ridiculous! For companies that wanted to embrace the technology, sometimes it’s hard to sell because customers are being ding both ways!
    Anyway, this is a service that shouldn’t cost the carriers to implement but now they are making loads of money and they still want to make more!

  • Noel

    Great explanation and wonderful example of how it works. One of the best uses for SMS is in it’s simple ability to give the user more content, whether through a quick response, a mobile-optimized site or email newsletter. I’m confident the use is going to be huge for those on the go.

  • sanjay telang

    I want to know revenue earning pert as a short code user?and where i can find the easies and cheapest option for india?

  • sanjay telang

    i want to find the cheapest short code service provider for dedicated number for a year atlease for a year? and how much maximum text can a client send in sms? what if he/she send more character in a sms?

  • Marc Burgess

    Thanks for the great insight.
    I’d love to learn more.
    Do you have any recommendations for cheap shared code provider with great payouts, that offers premium sms, as I want to charge viewers on my site .99 cents for their choice of voting between two episodes.

  • Damon

    What is the cheapest way to set up SMS in Canada to sell ringtones and voting.

    • SMS Reseller

      The cheapest way to get a short code and begin monetizing mobile marketing is by becoming an SMS Reseller on a shared short code. You can do this in us and canada with companies like Anchor Mobile and WildWestSMS

  • SMS Marketing Guy

    Shared codes are a cheap solution but there are some downsides. Keyword selection could play a factor with bigger corporations wanting words like Pizza, TV or WIN. But Yes it is a quick solution. World Wide codes would solve alot of our problems. Dedicated code have the downside of the fact a Vanity code is a minimum of 2,500 $start-up.

  • Kris Subramanian

    HummingBytes takes this Mobile Marketing to the next level. They use the same technology in hospital care, patient recruitment, university research and ofcourse mobile marketing !! The very fact that you let consumers reach a business, a slew of applications can open up. Not just to give coupons or directions but real world applications. For example, we lately deployed an application for a boston hospital for addiction recovery. People who have addition problems TEXT they probelms to the hospital using our short code. The system then forwards the message to the hospital who see it on their web front end. Doctors or advisors reply back from the web, which then again gets translated to a TEXT message and goes to the person undergoing addiction problems. Totally anonymous and instant help. Now that is a real world problem solved.

    In other deployments we help patient recruitment comapanies to collect patients who are eligible for a particular pharma study by simply asking them to TEXT a word to our shortcode. University research studies for wellness programs use our shortcode and expect the study group to TEXT in their daily data via TEXT. Our systems collect the data and give it to the university.

    TEXTing is ubiquitous and hence the myraid of applications that can be created.