SMS is a channel with a host of potential benefits, but it’s fallen out of favor somewhat recently with marketers in the US and Europe – prompting the question: is SMS still relevant?
Key benefits of SMS marketing
- Immediate – messages are delivered to phones within seconds of being sent. This is useful for time-sensitive campaigns that require immediate action.
- Direct – texts are sent directly to individuals, forcing them to engage.
- High open-rate – 82% of survey respondents said they open every SMS text they receive
More users are on mobile than ever before
In 2012, 6 trillion text messages were sent worldwide. This number is on the rise, too: Q1 2017 saw 107m new mobile subscriptions, bringing the total to 7.6bn; predicted to rise to 9bn by 2022. This correlates with a significant increase in mobile traffic, which overtook desktop traffic in late 2016.
But recent statistics show that more than half of the 7.4bn mobile connections are not smartphones (the total is 3.6bn). Mobile operators currently reach ~90% of the globe with standard mobile coverage (GSM), but just 65% of it with 3G (WCDMA).
For developing countries with less sophisticated mobile internet coverage and lower smartphone penetration, SMS is still an important means of communication.
And this isn’t just limited to developing countries. Recent years have also seen increased usage in mainstream markets, due in part to many operators now offering unlimited calls and texts in almost all contracts as standard.
Who is using SMS, and why?
There are broad demographic differences when it comes to SMS usage. For example, just 75% of 50-64 year old Americans use their phone for text messaging, compared to 97% of 18-29 year olds. There is also a gender split – women tend to read text messages less frequently than men.
Source: SHIFT Communications
Of course, the most relevant question for marketers is: are people using SMS to interact with businesses? The answer is yes – more than 1 in 10 SMS exchanges in the US are with businesses. Typically these messages fit into one of three categories:
- Confirmations and verifications (such as purchase confirmation, identity verification)
- Customer service (asking questions, resetting passwords)
- Coupons and special offers (timely deals, location-based marketing)
Like email, there are laws surrounding unsolicited SMS messages – users must opt-in to receive texts. According to a recent report, the top 5 reasons users opt-in are:
Source: 2014 Mobile Behavior Report
How do customers feel about SMS?
Although SMS opt-in rates are typically lower than those of other channels, 91% of users who do opt-in see the texts they receive as either somewhat or very useful. 64% of consumers think businesses should use SMS more, and 70% think SMS is a good way to get their attention
What’s more, 77% of consumers have a more positive perception of a company that offers text as a communication channel.
However, this may be skewed towards a younger generation who are more used to receiving a high volume of text messages. Consumers aged 45-54 are more likely to think a brand’s text messages don’t provide meaningful content (62%).
SMS marketing in China
Most of the statistics thus far have been focused on SMS marketing in the US and Europe. But for Chinese consumers, SMS marketing is even more relevant.
While only 50% of the Chinese population is currently online (versus 95% in the US), Chinese consumers are significantly more mobile-oriented. 94% of all Chinese online users use smartphones, compared to just 70% in the US. What’s more, almost 20% of internet users in China don’t use PCs at all. The average smartphone user in China spends 49 hours on their device every month, compared to just 45 in the US.
The graph below demonstrates the significant disparity in device penetration between the US and China:
Source: Verto Analytics
Marketers in China are already capitalizing on this focus on mobile. 350m+ SMS messages are sent in China every year, with the financial services, retail and exhibition industries leading the way in terms of volume.
The effect is clear: SMS marketing texts average a URL click rate of between 20-25%. This is an effective complement to other aspects of a marketing strategy, such as email – the use of SMS alongside email increased by 210% in 2015.
What does this mean for marketers?
At the very least, these statistics show that SMS is still a relevant channel for marketers to explore. 89% of marketers employing SMS said they found it either ‘somewhat’ or ‘very’ effective for marketing activities. In one report, they found it more effective than both corporate websites (64%) and display advertising (59%). 82% of those using it said they planned to increase or maintain their spending on SMS marketing over the following year.
It seems that the best approach for marketers seeking to integrate SMS into their strategy is to do so as part of a wider mobile marketing strategy.
Consider SMS as email’s shorter, more direct cousin. It can be used in the same ways (automated, scheduled) and for the same reasons (timely offers, re-engagement), but it is more disruptive.
This can have great benefits – as quoted earlier, 82% of survey respondents said they open every SMS text they receive. But it should be used with caution for the same reason. Ideally, messages should be tied to actions (either physical or digital) to ensure the message is relevant to the consumer at that time. An unexpected message which interrupts a recipient trying to do something else will not be well-received.
SMS is not always the right channel to use. It works best when your message is direct, succinct and include a clear call-to-action. More general aims like brand awareness should be achieved using a less direct channel.
Conclusions
SMS marketing is under-utilized. As a channel, it provides direct access to a huge volume of users interested in interacting with brands. And with high engagement and click-through rates, it has the potential to be an effective add-on to the right mobile marketing strategy.