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By Dr Pieter Streicher, MD of BulkSMS.com. Uploaded on: 05 June 2013.
Some commentators on the state of the SMS messaging industry point to the death of SMS as a communications medium. This may be true for global consumer use of SMS messaging in the face of newer communication technologies but these prophecies of SMS’s doom are overstated when looking how SMS continues to be integral for business messaging.
Twenty-something years of person-to-person (P2P) SMS messaging has fended off
its supposed demise in the face of new technology. The latest threat is said to
be from third party messaging services, also known as over-the-top (OTT)
messaging services, such as WhatsApp, Facebook Messenger, iMessage and
BlackBerry Messenger (BBM). These services use IP-based messaging through Apps
or online services instead of the SS7 protocol used for SMS messaging. Indeed,
at the end of April, research house Informa reported that in 2012 messages sent
via third party Apps overtook SMSs: 19 billion OTT messages compared with 17.6
billion SMSs. By next year, Informa predicts that 21 billion text messages
compared to 50 billion OTT messages will be sent.
On the face of it, this is surely a disaster for the network operators’ P2P SMS
messaging cash cow? Despite the forecasted growth in global SMS numbers in the
next two years, it looks like the shift in consumer messaging behaviour to
third party services that provide a richer communications experience is here to
stay. This does not mean that SMS is dead, rather it becomes a complimentary
channel in a sea of digital consumer communications.
Yet, it is important to add another social dynamic into to the mix.
Increasingly people are separating out their personal and work lives: Facebook
and WhatsApp are for social, while LinkedIn, email and increasingly SMS is
reserved for business communications. And with social messages moving to other
channels so that people can start making a bit of sense in their very busy
digital lives, the clutter has been removed from the SMS inbox, making SMS a
far more valuable channel for businesses. Take a look at your SMS inbox, it’s
probably shows flight confirmations, banking alerts, appointment reminders,
bill payment reminders and other work related messages rather than personal
communications with friends and family.
But imagine if these messages suddenly started being sent to you via WhatsApp
or if businesses started chatting to you via Facebook Messenger? The amount of
communications demanding your attention will increase and it will become more
and more difficult to discern which important messages need attention. The
consumer trend though is towards digital efficiencies. Customers are very
deliberately organising their lives using specific channels, and companies will
come short if they try to shoehorn themselves into a channel where they are not
We’re seeing this shift being reflected in SMS traffic volumes. South African
operators are reporting a 40% decrease in P2P SMS messaging volumes, while
WASPs like ourselves are seeing application-to-person (A2P) traffic, typically
sent by businesses and other organisations such as the government and
non-profit organisations, increasing.
If anything, SMS is encroaching on email, especially in the business space. SMS
still sees far higher open and response rates when compared to email. Tomi
Ahonen reported at the beginning of 2013 that the read rate for SMS is 97%,
compared to 20% for emails, while the average response rate for SMS is 26% and
email is 5%.
Over and above all that, SMS is still the only way to reach the largest number
of people using targeted campaigns to an opt-in database. SMS-enabled
cellphones are more prevalent than any other communications medium, whether
fixed or mobile, mass or one-to-one. So for any business looking to communicate
with the bottom of the pyramid or high-end smartphone users without having to
worry about whether the handset will receive the message, SMS needs to be their
primary communications channel.
As well as traditional business uses for SMS, we’re also seeing the new
generation of internet companies harnessing the power of the channel. One
example is to use SMS as a way to verify cellphone numbers used as a unique
identifier on smartphone Apps. Doing this, rather than insisting the user signs
up with a username, reduces friction on sign up – just look at the wildfire
uptake of WhatsApp compared to Skype on mobile phones. An SMS sent back to the
phone during the registration process for an App is a great way to verify the
cellphone number of a new customer.
So whether business SMS is being used at the premium end of the market, to
extend the capabilities of smartphones and Apps, or it’s being used at the
other end of the spectrum, to reach the most people in a reliable way, now is a
good time for companies to harness the power of SMS.