2008 was a transitional year for the mobile messaging market as SMS became a mainstream communications practice across the country. As the awareness rose, so did the number of messages sent. A recent CTIA survey shows the number of sent messages exploding from 57 million in 2005 to over 600 million by mid-year of 2008. CTIA also reports over 270 million wireless subscribers in the United States today – roughly 84 percent of the population connected at any one time. And according to Nielsen Mobile, the average American mobile subscriber sends or receives roughly 350 text messages each month, as opposed to making or receiving 200 phone calls.
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The adoption of SMS as an everyday communication channel has unleashed new opportunities for businesses, from major retailers to nascent start-ups, to expand their marketing initiatives and strengthen customer relationships in new ways. Some examples of this are airline status alerts, mobile banking and account balance updates, and retailers like Wal-Mart and Best Buy offering coupons, rebates and contests to consumers. We also see that SMS is going mainstream across verticals and demographics with the rise in social networking applications and the ubiquitous use in last fall’s election and political campaign alerts. With mobile users of all ages and experience receiving updates on everything from simple news and weather information to staying in touch with friends and current events, the level of engagement with their connections provides an attractive opportunity for businesses to interact with millions of consumers through mobile messaging.
While the off-portal mobile industry has benefited from tremendous growth and increasing user adoption in SMS messaging, it also faces some key challenges. Mobile commerce, for example, hasn’t grown as steadily as mobile messaging. What’s problematic for all players in the mobile messaging environment is the lack of consistent practices or standards for billing and messaging transactions, unprofitable operator and merchant business models and slower-than-expected innovation in the market. As a result, industry forums such as CTIA and the Mobile Marketing Association (MMA) are developing initiatives to define more consistent standards that will help reduce friction and inefficiencies and propel the growth of the off-portal messaging and commerce market.
As we look to 2009, emerging technologies will drive additional usage of mobile messaging in both communication and transactions for businesses. For example, MMS and WAP-enabled applications will continue to become ubiquitous across carriers, and will create additional marketing opportunities for mobile marketers and application developers with their enhanced user experiences. In addition, continued growth and opportunity in mobile advertising will allow businesses to apply ad-funded business models that will give consumers more choices of mobile services. Moreover, emerging mobile technology, such as using 2D barcodes on mobile devices for ticketing to large events and transportation services, will also provide new routes for generating revenue. As operators continue to open more network capabilities such as location information, more innovative applications that allow for context-relevant and personalized services will drive higher usage rates and growth in the market.
With the consistent growth in mobile messaging over the last year, we are extremely optimistic about the off-portal market in 2009. SMS has gone mainstream as we’ve seen with major successes like Wal-Mart, Twitter, the Obama campaign and the increasing adoption of these services and technologies by consumers. Despite the current business and technical challenges that exist in our industry, numerous industry forums like CTIA and MMA are coming together and addressing some key challenges in the market to help facilitate growth and improve the health of the mobile industry. It’s clear from all readings and trends that being open, flexible and working together is the only way to secure our businesses and provide a valuable customer experience. We all must remember that the quality of that consumer experience will be the ultimate consideration in the continued success of the mobile channel.
Emmet is general manager of OpenMarket.
