It's often less than a cent if you're a marketer sending in bulk, but U.S. pizza chain Papa John's could be forced to pay $1,500 a pop for 500,000 text messages its franchisees sent in 2010.
A class action lawsuit alleges that the chain's franchisees, though a third party text messaging service, sent promotional ads to consumers without their permission in violation of a 1991 law. The attorneys for the plaintiffs in the case are asking for $250m in damages, but a jury could award triple that amount if it decides that Papa John's willfully violated the law.
While it remains to be seen just how likely an eight-figure verdict is, and it would seem that there's a decent chance the class action will be settled before the matter is put in the hands of a jury, Papa John's plight provides several good lessons for other marketers using SMS to reach consumers.
1. It pays to get permission
In the United States, it's against the law to send text message advertisements without an opt-in, but even if that weren't the case, the magnitude of the Papa John's case hammers home the fact that consumers get really irritated by intrusive forms of advertising that they didn't ask for.
2. High volume rarely produces high ROI
The consumers suing Papa John's apparently have good reason to want the pizza chain to pay for its unwanted text messages: according to one of the lawyers involved in the case, some of the plaintiffs were sent more than a dozen messages in a row -- at all hours of the day.
While this, if true, this could have been the result of technical error or incompetence, many marketers do make the mistake of assuming that the more ads they send, the more likely it is they'll see a return on investment. In reality, that's rarely the case and high volume produces high levels of anger on the part of recipients.
3. "Somebody else sent it" isn't an excuse
Papa John's claims that "third-party vendors and a small number of franchisees" were responsible for sending the troublesome text messages. Assuming that's true, a jury may ultimately determine if Papa John's is culpable for the irritating SMS campaigns.
But make no mistake about it: Papa John's is unlikely to emerge a winner in the court of public opinion. After all, the Papa John's brand name is what appears in the headlines about what could be one of the largest spam lawsuits ever.
4. SMS campaigns are easy to execute, but hard to make work
Despite the fact that text messaging is apparently plateauing in the United States, it's an attractive channel for marketers for obvious reasons: billions of mobile phones around the world are capable of receiving SMS messages and it doesn't take much work to get an SMS campaign off the ground.
That doesn't mean, however, that success comes easy with these campaigns. The mobile phone is an intimate, always-on device and while that creates incredible opportunities, it also means that it's easy to cross the line and significantly harm a customer relationship with a single interaction.
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