In a couple of years, the widespread use of mobile technology, such as smartphones, will account for 18 billion devices around the world. Each device represents an opportunity for brand managers and business owners to reach prospective customers and build loyalty among existing ones. Smartphones allow marketers to reach audiences through various methods, and the Simple Message Service (SMS) protocol is proving quite effective.
How Brands Initially Utilized SMS Marketing
Despite being around since the previous century, the SMS protocol has been ruefully overlooked as a solid direct marketing and advertising solution. When text messaging initially gained widespread adoption in Finland during the mid-1990s, developers did not take long to maximize the protocol’s functionality.
Finnish owners of Nokia feature cell phones could get some personal banking through SMS transactions, request weather forecasts, obtain traffic reports, and check for available parking spots around Helsinki. It did not take long for some providers of goods and services in Finland to adopt SMS as a customer support channel, and they later started offering coupons and other promotional messages, thus becoming pioneers in the use of SMS text marketing.
The introduction of SMS shortcodes in the late 1990s was quickly embraced by the European marketing industry, where SMS campaigns to promote the Eurovision song contest allowed cell phone users to vote for their favourite artists. In 2005, Nike ran a campaign in Times Square where people could text a keyword to a short code and vote for shoe designs.
The campaign received more than a million votes. In the same year, the former automotive brand Pontiac ran a giveaway where people could text a keyword to a short code to enter to win a new G6 car. That campaign gathered over 100,000 entries in just minutes, and each entrant agreed to receive promotional text messages about the Pontiac G6.
The Crash of SMS Marketing in the U.S.
Following the impressive success of the aforementioned Nike and Pontiac campaigns, SMS marketing became a preferred marketing channel for just about everyone, resulting in spam. As more and more businesses started using an automated sms service, the amount of spam also increased. People started getting annoyed with receiving unsolicited text messages and complained to regulators.
2009 the U.S. Federal Trade Commission (FTC) issued new SMS marketing regulations. These regulations made it more difficult for businesses to send unsolicited text messages and required businesses to obtain consent from recipients before sending them marketing messages.
Around this time, the popularity of social media grew along with a renewed interest in email marketing, so businesses started to focus on those channels instead of SMS. Social media and email marketing were seen as more effective ways to reach a large audience, and they were also less expensive than SMS marketing at the time.
Why SMS Marketing is Making a Strong Comeback
The compliance requirements imposed by the FTC in 2009 were not onerous. Still, they needed a level of technological implementation that was not fully accessible to all brands and small businesses until 2014. Social media marketing was still going strong at the time, but then came the scandalous aftermath of the 2016 presidential elections, tarnishing social networks’ image as marketing channels.
SMS marketing started to come back in the U.S. marketing industry around 2015 when providers of bulk SMS services adopted a new technology that makes FTC compliance seamless. The cost of SMS marketing has decreased significantly in recent years, thus making it more affordable for businesses to use SMS marketing, even for small businesses.
These days, you see campaigns such as Taco Bell’s “Nacho Fries Pass,” which consisted of a limited-time offer where customers could sign up for a free order of Nacho Fries every week for 3 months. A shortcode and a keyword were part of the campaign, which resulted in a 30% nationwide boost in Nacho Fries sales for a return on investment (ROI) of at least 250%.
In the end, there is no question that SMS marketing is making a strong comeback thanks to integrated compliance tools, lower costs of bulk messaging, and great ROI potential.
