Why SMS/RCS Beats Apps for Brand Engagement

Mavenir-Mobile-Female
23 February 2018
Authored by: Brandon Larson

Operators are beginning to grasp the scale and potential of A2P (Application to Person) messaging revenues, and how advances in messaging technology will enable them to overcome the dominance of OTT messaging apps.  Juniper research forecasts that A2P messaging revenues will hit $50B globally by 2022.  With the right strategies in place, operators can dominate the A2P Messaging market and move their revenues in the right direction again.

Winning advertisers over to the promise of A2P messaging shouldn’t be difficult, as they can appreciate the ubiquity of operator provided messaging services, like SMS, with its high open rates and ability to reach and engage with clients.  The fragmented nature of OTT messaging apps lack the ability to ensure that advertisers can successfully connect with their customers.  While WhatsApp and Facebook Messenger users now surpass one billion, operators can boast a reach of seven billion subscribers worldwide.

And there’s even more good news on the horizon: Over the next five years, A2P messaging services will continue to expand and will include RCS (Rich Communication Services) messaging. With RCS, brands and enterprises will be able to include enhanced interactive content right in the native messaging suite itself – no need for customers to worry about juggling multiple apps, and operators can expect high demand from many sectors, including marketing and retail.

Spoiler Alert- Fraudsters Want to Steal A2P Revenue

With A2P SMS traffic set to hit 2.7 trillion by 2022, it’s a given that fraudsters will attempt to grab some of the revenue, and bypass costs. Operators must protect their revenues, their customers, and their reputations from the negative effects of fraud and spam.

Juniper found that grey route A2P traffic accounted for 30 percent of A2P SMS messages in 2017. Operators must employ a full range of SMS firewall solutions that are machine-learning based, can recognize fraud in real-time, and can cope with firewall bypass techniques. 

When leveraging proper technology and processes, operators can convert the majority of grey route traffic to white route traffic.  This could increase annual revenues collectively by $12.7B, which is equivalent to 60 percent of the decline in combined operator service revenues from 2015-2016.

RCS: The OTT Messaging APP Killer

RCS will provide even more messaging revenue opportunities for operators, as it is expected to carry a premium over SMS because of enhancements such as file sharing, audio messaging, and video. New user facing concepts, like Rich Cards (introduced in the RCS Universal Profile) enable use cases that go beyond traditional A2P concepts.  Businesses can save on the investments they make in single purpose apps and provide a ubiquitous, common, and intuitive way for individuals to communicate with enterprises- all in a single messaging client.  No need to install dedicated apps or switch between them - in other words, no more “App Fatigue.” This enables operators to migrate some of the revenue from the app development space into traditional and intuitive models used by enterprises, just by leveraging new A2P gateway systems, such as Mavenir’s Messaging as a Platform (MaaP).

RCS enables operators to retain the reach advantage over other mobile channels, as the richness of RCS adds significant value over SMS, with A2P offering an exciting channel for enterprise and consumer interaction, and a growing revenue opportunity for operators.

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Brandon Larson
Brandon Larson

Brandon Larson

Brandon Larson is the Senior Vice President and General Manager of Mavenir's Multimedia Business Unit.   He joined Mavenir from Tango Networks, where he served as their Chief Strategy Officer.  He is also a former employee of Mavenir, having previously run the Sales Engineering organization for the America’s region where he was instrumental in many key Mavenir projects including the world’s first IMS VoWiFi, VoLTE  and RCS 5.0 service launches.

Brandon has a diverse experience having held roles in sales, marketing, product line management and program management in his previous companies, Nokia and Ciena. 

Brandon started his career as a Nuclear Engineering Officer in the United States Navy.  He is a graduate of Navy Nuclear Power school and received his nuclear engineer certification from the Department of Naval Reactors.  He received a Bachelor of Science degree in Chemical Engineering with High Honors from Rutgers University.