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How Haiti changed mobile forever

By Gary Schwartz

While media companies discuss mobile applications and other leading-edge ways to engage the consumer, the reality of what we debate and what actually works are often two different things.

Historically, mobile business has been driven by unassuming but universally adopted communication services such as SMS. Haiti and the American Red Cross underscore this.

Let us cycle back to April 2007. The Network of Mobile Election Monitors in Africa set out to empower citizens to monitor the Nigerian election by sending on-the-ground reports via SMS messages. Good idea in a country nearly 1 million square kilometers with 30 million phones and a few foreign observers running around in U.N. branded jeeps and T-Shirts embossed with the word ?Observer.?

Forward to the Obama 2009 election with all the mobile marketing bravado. There was a citizen journalist program put in place called Video-the-Vote. Same idea: lots of polling booths, lots of people, lots of phones. Upload your mobile footage and keep America free.

Although the 2009 U.S. consumer has a camera on every phone, what actually works during the election could have been run on basic Nokia 100s two-and-a-half years earlier.

SMS answers SOS
In January 2010, devastation hits Haiti. Within one day, $1 million is raised through micro-donations via SMS. In less than one week the number is near $20 million in $10 contributions. 

We also see donation requests on primetime television ? with NFL players touting their phones ? that only mention the SMS channel: no call-in number, no Web site address.

This begs the question: Do all the bells and whistles of the new age phone really change the core consumer behavior?

Not really, if the use of SMS for rapid donations for Haiti post-earthquake relief is any indication.

SMS donations allow for ubiquitous reach and just-in-time decision making. 

Nielsen data shows that with feature phone owners ? or the demographic we affectionately referred to as dumb phone owners ? usage penetration of SMS was dominant at 58 percent.

When you compare this to smartphones usage penetration, it just continues to grow, shooting to 83 percent. Nielsen data shows that SMS, and not mobile Web, email or applications, is the channel of choice. 

We are a simple folk. Our technology adoption patterns seem to be constant:

1. Two clicks are one click too much
2. I only use things that help me effectively a) kill time, b) save time or c) save money
3. Instant communication makes me feel good

Put most of our technology innovation through this filter and you will see if they succeed or fail.

With Haiti: you can check 1, 2b and 3.

Ecosystem players
Jim Manus was working at MQube in 2005, trying to setup a mobile donation service during the Katrina hurricane crisis.

Verizon Wireless was the first out of the gate in September 2005 that year allowing consumers to donate via mobile to the American Red Cross by text messaging the short code 2Help. But the process, although admirable, was ad hoc. There were no taxable receipts or cross-carrier standards.

When James Eberhard and Jen Snyder put mobile donations on the drawing board three years later, they hooked up with Jim Manus. Their efforts became the mGive Foundation and the Mobile Giving Foundation.

Today?s Red Cross mobile donation results on the mGive Foundation network are testament to success of this impulse donation channel.

This month with the Haiti earthquake consumers can text the keyword HAITI to the short code 90999 to donate $10. This is seamlessly billed to the donor?s phone account and appears on the January bill.

Also, taxable receipts can be printed at http://www.mGive.org/receipt by simply entering the donor?s mobile phone number.

Does $20 million ? or, hopefully, $100 million-plus in donations ? finally demonstrate the power of a native mobile commerce channel?

The success of the phone as a commerce tool is as old as ringtones and premium SMS billing.

With the ringtone economy dying in 2009, the focus has been on off-deck billing. But do the micro-payments to the Red Cross demonstrate that SMS can still be effectively used in 2010?

Donation services are a new commerce channel. The carriers have waived any revenue share on these donations. With commercial services, however, the carrier takes a sizable revenue share on the transaction.

To make the business case for this channel, you need to leverage SMS with tethered credit card payment.

Billing Revolution and other mobile commerce services have tied the one-click SMS channel to the consumer?s credit card. Their PCI-compliant offerings drive the same impulse behavior with a viable business model.

In our impulse economy, there are products and services that cannot and should not be buried behind storefronts and phone lines.

Please take a moment to text HAITI to 90999 for a $10 donation to the Red Cross.

Gary Schwartz is president/CEO of Impact Mobile Inc., Toronto. Reach him at .