Hi, Derek Johnson with tatango.com here.
I was speaking the other day to a friend, and we were talking about how popular text
message marketing has become, and it continues to become more popular.
But the question was very interesting that I received is, "While it is popular, why is
not more popular?"
And that kind of caught me by surprise and it made me think.
And I want to address this on video to not only kind of explain where the industry is,
but maybe some of the things that are holding back the industry, and whether those things
are good or bad.
So, I made a list, and I really think it comes down to complexity and cost for text message
marketing that's really holding it back.
Now, as you'll see as I go through these, I don't think these things are negative even
though it kind of holds the industry back, because as you'll see, it prevents people
from things like text message spam which no one wants.
So, I made a list here, it's only a few.
The first one is complexity, and there's two parts of this for the complexity that make
it really hard for businesses to get into text message marketing, compared to maybe
social media marketing or email marketing, that is, the best practices.
The best practices in text message marketing, there's actually two components.
One is best practices from the wireless carriers and the CTIA, and essentially they can shut
down your text messaging campaign if you violate those best practices.
And the second is the Telephone Consumer Protection Act, TCPA as some people refer to it as.
That is actually federal law, and that requires that you do a lot of different things correctly.
And if you don't do it correctly, you can be sued from consumers for up to $1,500 per
text message.
So, you have all these...you have best practices from the CTIA and the wireless carriers, then
you have the TCPA, so it's law you've got to follow.
The best practices and the laws are very complex, so it makes text message marketing complex.
So, that's something that holds, I think, text message marketing back from maybe smaller
businesses, or businesses that are maybe confused about the industry, this makes it more confusing.
The second part, the complexity is that you have to, in the United States, use a SMS short
code.
A SMS short code is a five to six digit phone number that is essentially given to your brand
by the wireless carriers that you use to send and receive text messages.
Now, the problem with short codes are they are very complex to get and to maintain.
So, with short codes you have to first figure out what you're doing on the short code.
Then you have to submit a short code application to all of the wireless carriers.
They have to approve that short code application.
And then once you get the short code you have to host the short code on an SMS aggregator.
As you can see, these things, it's very complex.
It's not as easy as just signing up for email marketing or creating a Facebook fan page.
So again, complexity, I think, is something that's holding text message marketing back.
The third part, which includes the short codes and in the compliance issues, is the cost
of text messaging.
So, for text message marketing there's a cost for the software, setup.
There's even a per cost for sending text messages.
So, all those costs add up.
So, to start a text message marketing campaign it's very costly.
And then to actually run a text messaging campaign, you're paying per message.
So, those kind of things obviously hold marketers back because free things like Facebook or
very cheap things like email marketing kind of usually come first, because obviously they're
free.
And then as marketing progresses, that's when they start looking into more of paid models
or more expensive marketing channels.
Even though I don't think text message marketing is expensive, when it comes to the return
on investment it still is a big investment.
And it has to be made usually up front to purchase the short code and to pay for the
messages, and the software and the setup.
So, it is a very costly endeavor.
Now, that being said, if the CTIA, if the wireless carriers, that the TCPA said, "Nah,
don't worry about it.
Don't follow any of the laws.
We're not going to sue you.
There's no issues anymore."
And then if the carriers said, "Hey, short codes can be available to anyone and they're
essentially free."
And then if on the costs side they said, "Text messages, nah, don't worry about paying for
those either," what would happen in the United States would be that there would be a huge
push towards text message marketing.
And when there's a big push and it's very cost-efficient or free to do it, that means
you would receive a lot of text message spam.
And no one wants that, because right now in the United States with the Telephone Consumer
Protection Act, with the fact that text messages cost money to send and that short codes are
very expensive as well, this prohibits text message spam in the United States.
So, if you removed all of those things, while text message marketing as an industry, I think,
would grow extremely fast, I think consumers would grow extremely frustrated with text
message marketing.
And then what would happen is text message marketing has a 99% open rate right now.
And 90% of text messages are opened within 3 minutes.
Those kind of statistics would severely drop the minute consumers start receiving text
message spam.
So, then it becomes the industry would be bigger and brands would be interested in text
message marketing, but the results and the metrics would drop significantly.
So, it's kind of a trade-off, I guess.
I'm happy with the way it is right now.
I think our clients get a huge return on investment.
But there is an investment.
There is time put into it, and capital.
But I think really it's worth it in the end, and I think it protects consumers from annoying
text message spam.