Four Numbers that Tell Me Why SMS Marketing Is About to Blow Up
November 10th, 2008 by Matt ThomsonWe write a lot about email on this blog and that’s largely because our clients tell us that the product predictions that come out of our customer prediction database makes the most monetary difference when used for email relevance. (It’s hard to argue with the 64% increase in revenue per email that we get with those predictions.) But the email-centricity is also indicative of the Baby Boomer and Gen X markets that our clients serve. And now that we’ve started to engage with companies that cater to younger markets (namely Millennials), we’ve gotten a chance to deal with newer communication channels (namely SMS text). SMS text marketing is arriving sooner than we’d ever imagined. And I have four numbers that prove it.
With the Obama campaign’s SMS text campaign heard round the world, it seems as if SMS text marketing has the tipping point that it really needed to move into the mainstream marketing practices. Obama blasted 2.9 million SMS subscribers when revealing that Joe Biden would be his running mate, choosing the mobile medium instead of email to denote the significance of the event and to garner extra media attention for the novel approach to the announcement.
In addition to this bellwether event, MarketingProfs says that there are two good reasons why SMS should be on marketer’s shortlists: because SMS is subscriber-centric and because it will confer an early-adopter advantage on the marketers who use it well.
Well, that’s great stuff from MarketingProfs, but I want to add four numbers to this churning avalanche of SMS momentum that are more important than heady, strategic reasons for the pending importance of SMS marketing. Without further adieu, four numbers that tell me why SMS marketing is just around the corner.
- 95%. That’s the percentage of text messages that are read compared with only 25% of e-mails. This, according to Marketing News.
- $200 billion. The amount that Millennials (the 15-26 age demographic) spend per year. Or, at least, their parents spend that much on stuff Millennials want. Source: Kizer and Bender’s Retail Adventures in the Real World.
- 42%. The percentage of Millennials who prefer SMS over other types of messaging (email, IM, etc.). Source: ExactTarget’s 2008 Channel Preference Survey.
- 55%. The jump in interest for mobile advertising between July 2007 and May 2008 among surveyed advertisers. In just under a year, interest is up from 26% of those surveyed to 81% of those surveyed! Source: MMA.
Tags: SMS Marketing, text marketing
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November 12th, 2008 at 9:58 am
While I agree that companies that begin experimenting with SMS have an early mover advantage, it is important to note that the 42% figure you quote from our research reflects a preference for written communication between friends. When asked about preferences for receiving opt-in promotional offers, only 1% of Millennials said SMS was their channel of choice.
Millennials have distinct preferences for how they want different entities to communicate with them. They leverage different channels for different things. Even though teens and young adults are gravitating toward SMS and social networks for personal communication, 62% of teens (15-17) and 73% of those between 18 and 24 still prefer email for promotional messages. Urgent messages, such as Fraud Detection Alerts, are a different matter. Email is still the channel of choice for the majority of consumers, but it 9% of Millenials want a text messages.
Yes, offer SMS as a choice, but proceed with caution. This group of consumers is SPAM-savvy and vocal. They will blog, Twitter, and tell their friends if you cross the line–especially in SMS, which is generally considered a very personal channel.
Morgan Stewart
Director, Research and Strategy, ExactTarget
December 8th, 2008 at 4:06 pm
Morgan Stewart makes a great point. You definitely have to be cautious when using SMS for marketing purposes. I’ve grown used to spam email, and my email blocks most of it anyway. But spam text: that makes me mad. Considering that many people still have to pay on a per text basis, you stand the chance to anger your target market really quickly if you’re not careful.