Since the dawn of civilization, in which commerce played a germinal role, businesses have always understood a simple principle: if you have something to sell, you have to find someone who wants to buy it. It meant you had to come up with a plan to make others aware of your product or service offering, which translated into the appearance of marketplaces and the creation of different strategies to get better positioning ahead of potential competitors—using announcements, signs, demonstrations, etc.
These practices have existed for millennia, but it was not until the late nineteenth century that the term “marketing” was first used to describe the activities related to the buying and selling of products, goods, or services.
Over the course of history, businesses have embraced all the technological advances that civilization created for their marketing purposes, to advertise their products and services and extend their reach to a broader market. The early written signs of a merchant’s stall became advertisements on billboards, newspapers, and magazines. The verbal announcements performed at the marketplace or along the streets of a town expanded their reach through radio and television. But even as technology evolved dramatically, the marketing channels could still be counted on one’s fingers and were primarily press, billboards, sponsorships, mail, radio, and TV. With the exception of mail—while, albeit slow, responses could be received—these channels were predominantly unidirectional.
The situation exploded with the arrival of mobile communications and the Internet, which ushered in the arrival of a fast-paced world in which enterprises have too many channels available for their limited marketing budgets. Today, matching the target market with the channel that provides the best balance between reach and return on investment has become a very complex exercise, often based on trial and error.
Additionally, today’s consumers have changed their habits, too. Radio and television have given way to social networks, web search, messaging applications, mobile apps, streaming services, and mobile messaging. Each of these options represents different demographics, needs, and limitations that heavily influence the reach of the brand’s message.
Mobile apps, in particular, illustrate one of the most rapid changes in consumer habits and as a result, enterprises have diverted a portion of their marketing investment towards mobile apps in the last few years, although not with the return on investments they expected (eCommerce/Retail, Business and Technology applications retain only 23% of their users after 90 days[i]). Even if consumers spend 50% of their digital media time on smartphone apps, 51% of them still do not download any apps in a month[ii]; they usually spend the time in popular applications they already have (Facebook and Google have 8 of the top 10 most used apps).
Among all of these channels, however, there is one that is favored by enterprises globally because of its ubiquity and responsiveness: SMS mobile messaging. Today, SMS remains the world’s largest messaging platform with 4 billion monthly active users (MAU) out of the 5 billion unique mobile subscribers. SMS reaches 71% of the world’s population.[iii]
Figure 1 – SMS: The Largest Global Messaging Platform – Source: GSMA, 1Q2018
Brands Love SMS but Yearn for More
Despite the text-only nature of SMS and its limitation of 160 characters, brands are using SMS today for marketing campaigns and other use cases for several reasons:
- SMS is ubiquitous — SMS can reach anyone who has a mobile number (sometimes, even landlines are text-enabled)
- SMS is a clean channel — the communication between brand and consumer is private and direct, and there are no distractions in the user experience.
- SMS is regulated — as much as the telephony industry is in order to protect consumers and marketers alike. Regulations are in place to deter spamming via text messaging.
Because of these reasons, consumers also favor SMS:
- 95% of customers who have opted into a brand’s text messaging program open and read the brand’s messages within 3 minutes[iv]
- It takes 90 minutes for the average person to respond to an email. It takes 90 seconds for the average person to respond to a text message[v]
- Texts have a 209% higher response rate than phone calls, and responses through text are 295% more likely to be “yes” responses than phone calls[vi]
- When given the choice between verifying information via text message or phone, almost 90% of customers choose text[vii]
Therefore, it is not a surprise that, although personal SMS messaging declined after the arrival of the over-the-top (OTT) messaging and social applications (iMessage, WhatsApp, Facebook Messenger, Snapchat, etc.), business messaging over SMS—also known as A2P (application to person) messaging—has continued to increase and represented a USD $60 billion market globally in 2017.[viii]
However, in reality SMS technology has become démodé and brands are put off by the text-only, 160-character limitation. New social messaging applications have been offering multimedia capabilities for years, and consumers are accustomed to receiving images, videos, and sound within their messaging experience. This demand for content richness is steering some enterprises to launch dedicated campaigns in media-rich channels (web ads, Facebook, Instagram, Snapchat, etc.), even if they are not clean channels (subject to harvest and sale of metadata to potential competitors). Additionally, OTT messaging applications, having become aware of the potential of A2P messaging, are already implementing plans to get a slice of the A2P messaging revenue pie.
But there is a way for enterprises to obtain the media richness they desire in their customer experiences with added interactivity and enhanced analytics while preserving the clean channel between consumer and brand.
RCS, or Rich Communication Services, is the GSMA standard that upgrades the SMS mobile messaging experience with full multimedia capabilities on a mobile messaging channel that is secure and private and provides a clean digital billboard for the brands.
Figure 2 – The SMS Tradeoff for Marketers
Download the Connecting the Bots white paper for more information on RCS Business Messaging and how RCS can become another standard messaging channel available in the leading chatbot platforms to facilitate the relationship between brands and consumers.
[ii] TechCrunch: Majority of US consumers still download zero apps per month, says comScore; August 2017
[vi] Franchise Help: Text Messaging Is Absolutely Eating Phone Call’s Lunch; May, 2015
[vii] Franchise Help: Text Messaging Is Absolutely Eating Phone Call’s Lunch; May, 2015