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Verizon begins approval of new standard-rate mobile coupon programs

Verizon Wireless, the nation's largest wireless carrier by subscribers, is approving new standard-rate mobile coupon programs less than a week after this publication raised that issue.

The carrier is said to have been in the process of approving newer standard-rate coupon programs, but many in the industry felt that Verizon Wireless was rejecting them.

Marketers can now pass along resubmission requests for any standard-rate mobile coupon programs that were pending.

An article in this publication's April 24 edition highlighted the mobile marketing industry's helplessness in the face of Verizon Wireless' rejection of new standard-rate mobile coupon programs, thus affecting many marketers' promotion plans (see story).

Last week's article mentioned unnamed executives who claimed that Verizon Wireless considers standard-rate coupon programs as third-party advertising.

Verizon Wireless, Basking Ridge, NJ, is not rejecting standard-rate mobile coupon programs already running.

A standard-rate mobile coupon program functions just the way standard-rate text messages do -- consumers are not charged for the SMS except the standard rates.

Verizon Wireless' earlier rejection seems to fit a pattern of conservative stands against mobile marketing.

The carrier is said to be extremely slow in provisioning short codes once they have been approved.

In other words, marketers and content providers are waiting months to run text message campaigns to their own opted-in database once the short code has been granted.

Also, Verizon Wireless gained notoriety last fall for a decision to levy a 3-cent transaction fee for every outbound SMS message sent to its subscriber base (see story). That move could have potentially threatened the viability of legitimate text messaging.

In fact, the charge would have either double or triple the cost to marketers who send out SMS text messages to opted-in consumers who are subscribers of Verizon Wireless' mobile phone services. The planned fee hike was supposed to be effective Nov. 1, 2008.

But market outcry forced Verizon Wireless to rethink the issue -- at least for the time being.

Verizon Wireless then told SMS aggregators it would not impose a new 3-cent transaction fee for every outbound SMS message sent to its subscriber base starting Nov. 1.

Verizon Wireless matters simply because its network coverage nationwide is topnotch.

The company also boasts a subscriber base -- almost 87 million -- that is the largest among all carriers including AT&T, T-Mobile, Sprint and all regional and prepaid rivals.

Hence, Verizon Wireless' cautious attitude toward approval of mobile marketing initiatives is felt by all players in the ecosystem -- aggregators, mobile marketing firms, content providers, publishers and ad agencies.

Carriers such as Verizon Wireless are aware of their clout in the mobile marketing area, particularly in a channel they completely control -- SMS. One of the two ways of running coupon programs on mobile is through SMS and camera-click bar codes.

In fact, mobile coupon programs are developing into effective traffic-enabling tools for consumer packaged goods companies, food and beverage players, retailers and sellers of tickets for movies and entertainment.

Very often, these marketers use other media such as outdoor, print, television, radio, mail, print coupons and inserts to encourage recipients to double opt-in for offers and coupons delivered via text to mobile phones.

"If it's only building your database, it's not third-party advertising," a mobile executive told this publication last week.