by Staff Reporter on 06/06/13 at 8:30 am
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 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 welcome.
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.
Ideate is one of South Africa's biggest business blogs, with a team of authors all of whom have had entrepreneurial experience. Ideate is read by entrepreneurs thinking BIG. Follow us on Twitter here. View more articles by Staff Reporter.