Reality Check: SMS is dead … long live SMS

Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.
Only a few years ago SMS was considered by many as a declining technology that was destined to be replaced by more sophisticated applications and communication methods designed for smartphones. Yet this simple and scalable solution continues to grow in popularity while at the same time generating revenues for operators and driving innovative ways for brands to reach a broad target audience.
Every single cell phone of the roughly 500 models in the market today can send and receive SMS messages. Even though smartphones receive the majority of the attention from the consumer and the development communities because of their functionality features, cool interfaces and rich graphics, they still represent only a small portion of the market. For example according to CDI, less than one in four of all Canadian handsets are a smartphone. On the other hand, the popularity of SMS continues to grow year to year by an average of 30%, according to the Canadian Wireless Telecommunications Association (CWTA). Nearly 3 billion messages were sent in September 2009 alone.
SMS marketing has evolved from one-off campaigns into a bona-fide engagement strategy for brands and advertisers. Consumers are also increasingly responsive to SMS marketing. Last year the CWTA reported a 21.57% increase in common short code messages sent and received between Q2 2009 and Q3 2009, from 356 million to 433 million. Consumers are increasingly willing to give up their phone number in exchange for relevant information. Weather, radio and sports are the most popular categories of alert opt-ins according to InsightExpress’ most recent Mobile Consumer Research report.
Although device type does influence the features that are used, smartphone consumers use the text messaging feature more than any mobile web or application features according to JiWire’s most recent Mobile Audience Insights report. Not only does SMS marketing have higher open and read rates than those of e-mail marketing, SMS also gives advertisers a number of advantages over smartphone applications. The opportunity to communicate with consumers who are on the go and to re-market to an opted-in consumer base with push-messaging is a great advantage because it puts the advertiser in control of content delivery and reminds consumers of what is important to them. SMS marketing also offers the advertiser the opportunity to start building and tracking their own database, an added advantage on the heels of Apple’s ban on 3rd party data collection.
SMS can seem outdated at first sight, but there is great potential with the addition of creative-call-to action, cross channel integration and leveraging the rich media features of mobile phones. This is the case in the current mobile marketing initiative by the Globe and Mail, a major national Canadian newspaper. Readers of the paper are encouraged to opt-in for SMS alerts on news surrounding the upcoming G8/G20 summit in Toronto. Calls-to-action are featured on the paper’s website and in print, and every SMS includes a mobile web link to the on-line article, in essence closing the channel loop.
The Globe and Mail is utilizing SMS are a gateway to richer and branded experiences. More importantly by focusing on SMS content delivery the Globe and Mail has the potential to reach a much larger portion of their readership then with a smartphone application alone. The news has an impact on everyone, why should only smartphone users stay informed?
Apps are seen as innovative and cutting edge, and on the most part created as part of a branding strategy rather than a marketing initiative. With SMS and shortcode marketing you have to handle databases, consider re-marketing strategies and design call-to-action scenarios. SMS is more challenging however as it presents a greater pay off. The success of any mobile campaign depends on the number of client devices it can reach – how many devices are you missing from your target market by focusing on smartphones only?
SMS is far from dead, in fact, its rebirth is only just beginning!
Marcus Anderson is president of Broadplay Inc., a leading mobile marketing service provider in the
Canadian mobile universe. While the focus of Broadplay Inc. is to allow companies to communicate with their customers’ cell phones, the real expertise lies in generating mobile opt-ins to allow for this engagement on a permission-based fashion. Prior to launching Broadplay, Marcus was VP Sales and Marketing with SiMPRO PCS, a niche market MVNO service provider within the Canadian PCS sector operating on the Microcell network. Marcus has his MBA degree from the Richard Ivey School of Business and a Bachelor of Science degree from the University of Toronto.