MarketingMonitor: Refresh SMS Case Study


How An Experiment Became A Successful Business


Nrly 1bn msgs snt each mnth. [OK, that's enough SMS-speak, we have whole words to play with here -Ed.] One group in particular have taken to SMS like ducks to water- school children. Nearly 50% of children in the 7-16 year old bracket now own a mobile phone and they each send an average 2.5 messages each day.

There are no signs of an SMS slowdown as more and more kids are becoming phone-owners. They aren't put off by warnings about the health risks of obsessive texting - the British Repetitive Strain Association has recently identified a potentially non-fatal risk, Text Message Injury, AKA: a sore thumb. Nor do kids seem concerned about costs, especially when there are websites offering free SMS.

One of these sites is Refresh, a quietly successful site, is using SMS to complement other marketing activities and to harness the 'viral' power of text messaging.

The Site

Refresh started life as an experiment, an entertainment news and community site for 'yoofs' (16-26 year olds) in 1997 by agency 12:51 Communications. A familiar concept perhaps, but unburdened by extravagant marketing budgets, swanky offices and over-eager VCs the site was built for a meagre £1,200.

This wasn't another high profile portal. Marketing Manager, Jonathan Philips says, "At that time the Internet was a whole new area. The site was an experiment to see how well a website could be marketed using only online methods/word of mouth (i.e. no media budget)."

The free SMS service was launched earlier this year, built in-house and according to 12:51, pretty straightforward allowing for a few technical and design tweaks.

Refresh's SMS service offers some unique features: Users can send the same message to several friends at once and they can also store friends' numbers on the site along with a record of all the messages they have sent. Handy for organising group outings, etc.


Marketing has cost the company zilch, just staff and overheads. Refresh has never bought banner space. Aside from word of mouth the site relied on 'free' marketing techniques: search engine submissions, newsgroup placements and a reciprocal linking programme.

The Refresh email newsletter, sent 3 times/week in text and HTML, became a very useful tool to let users know about new content increasing traffic by as much as 50%. Valuable user information was captured through the registration process for the newsletter and chat forums. This process was kept simple and user numbers grew steadily.

Refresh decided to develop a free SMS service to build on their existing marketing activities. The launch of the SMS service set off a sudden rise in traffic. Refresh announced the launch of the new service through the newsletter but the biggest promotion has been through the use of the service itself. In Hotmail style, each text message sent through Refresh's SMS service has a 30 character promotional message at the end of each message and every message is branded as coming from 'Refresh SMS'.

Users have to register to use the SMS service and it's proved incredibly popular. When you consider this kind of tactic played a major part in getting Hotmail where it is today, it seems to make a lot of sense


The only hard costs are the charges for actually sending the messages, currently 2p/msg or £80/day at current traffic levels. There was no media spend.


Prior to the launch of the SMS service, the site was receiving 1.4m page impressions from around 100,000 unique users each month. Not bad, given the limited marketing resources. So, what difference has free SMS made:

Since June, when the service launched, the weekly growth in traffic and unique users has gone from 9% to 25%. The site is now seeing a week-on-week rise in registered users of more than 40% with over 4000 text messages are sent per day.

The SMS service has also helped to even out the website traffic's peaks and troughs. Many new users now come to the site just to text message friends but more and more are sticking around to explore other content. To text you must subscribe but once subscribed, visitors can access all areas including the community forums. It's proving a cost-effective way to gather precious audience information.


The success of the SMS service is a great example of viral marketing at play. The set up and running costs are low (each message costs the company just 2p) but the impact is high. As the number of messages sent grows, the advertising space available to Refresh increases. Site users have found a service they love to use and every time they send a message, they can't help but spread the brand message too.

Bang for buck-wise, the SMS promotion looks like it's going great guns for Refresh. The concern will be how they derive revenue from the increasing number of users on the website. The data capture will clearly become more important to them, but with humble beginnings, they seem well positioned to take advantage of the contraction in the number of sites targeting this potentially lucrative audience.

The question hanging from everyone's lips is 'how's it making money?' Importantly for this type of site, the running costs have been kept very low, never a bad thing if you want to be a dotcom survivor. But the site still needs to make money. Refresh does get interest from sponsors and advertisers but right now this isn't easy money to find and more importantly, to rely on.

Marketers rapidly growing lust for databases of opted-in mobile phone numbers and email addresses, bodes well, particularly given the sites young audience and the traditional difficulty in reaching this crowd. It would be surprising if this area doesn't develop.

Refresh is now testing the water by talking to groups of users to work out how best to introduce this and what information will best appeal. Philips explains, "Registered users will have an option in their profile, which they can obviously opt-out of at any time. There are marketing initiatives planned; designed specifically to increase the number of opted-in mobile numbers for such promotions. We'll also be able to handle the sending of these messages."

For marketers thinking about using SMS in their campaigns, Philips points to the low costs of sending messages and the directness of the medium - the message lands in the palm of the hand. In many ways the medium is similar to email. The mobile handset, like the inbox, is a personal space and unwanted advertising messages are an intrusion. "Permission is an absolute must."

Refresh are also considering business-to-business options including charging for co-branded versions of the SMS service for non-competitor sites. A white label version is not out of the question.

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