In the past couple of months, several major developments have happened in the business-to-consumer (B2C) messaging space that promise to shake up the messaging industry in a major way. Facebook, WhatsApp and Apple have all made available to their business customers tools that will allow them to connect their businesses more easily to mobile users via messaging.
Facebook Enters the Business Messaging Wars
Last November 2017, Facebook started testing Message Broadcast - a tool that makes it easier for businesses to send message blasts to their customers using Messenger. Message Broadcast will be a self-serve interface for Messenger’s Broadcast API, which allows developers to automate message blasts to people who have opened a conversation with a business via Messenger.
WhatsApp for Business
More recently, on January 2018, Facebook-owned WhatsApp launched WhatsApp Business - a new, standalone app that helps small businesses easily connect with their customers. Businesses can use a series of tools provided by the app, like smart messaging which helps owners provide “quick replies” to customers’ frequently-asked questions. Businesses will only be able to contact people who explicitly opted-in by providing their phone number and agreeing to receive messages from the business. WhatsApp has also announced that it will launch later on an enterprise solution aimed at large businesses with global customer bases, such as airlines, e-commerce sites, and banks.
Apple Business Chat
Not to be left behind, Apple announced during their Worldwide Developer Conference last June 2017 that it was introducing Business Chat, a new feature in iMessage that will allow consumers to chat directly with businesses through Apple’s messaging platform. Business Chat will go live this coming spring season of 2018. These developments have gone largely unnoticed by the general marketing, media and business community. After all, many think that the days of business messaging (think SMS broadcasts) are long behind us, in a social-media powered messaging era that supposedly will obsolete the telecom operators. Since the rise of Facebook and the emergence of the social media era in 2007, many have foretold the death of business messaging - using messaging tools such as SMS to reach out to customers - because of the rise of social platforms that allow businesses to communicate for “free” with their fans. So why are two of the biggest tech companies with a combined market capitalisation of $1.39 Trillion (yes, trillion) making a big push in a space (B2C messaging) that has long been written off as obsolete or dead? Is business messaging a lucrative enough opportunity for Facebook ($515B market cap) and Apple ($874.9B market cap)?
Business Messaging is Far from Dead
The reality is that business messaging using SMS has never really died down. In fact, the emergence of all of these so-called Over-the-Top (OTT) players such as social media apps have only created an entirely new, lucrative business for SMS. Many apps nowadays, for example, require the sending of one-time pin requests for authentication purposes (eg, banking apps, app registrations, etc). The SMS volume of these one-time pin requests are actually huge, given the big databases of these apps.
In the Philippines, many companies are thriving on a very simple business model of selling broadcast SMS to companies. Most major banks buy SMS in bulk for various transactional, marketing, and promotion-related announcement needs. Mobext Philippines’ own messaging business has actually continued to grow and thrive - despite the market shift to digital and social platforms.
Digital marketing services (such as content creation, social media marketing, search, etc) have actually represented incremental revenue streams for us, and have not cannibalised or destroyed our legacy SMS messaging business. In fact, in 2017 alone, Mobext Philippines’ proprietary SMS messaging platform LaunchPad Messaging processed close to 30 million messages. Our clients, on the average, buy around 80,000 SMS every single day from us. They continue to invest in SMS because it works - it has 100% reach of the total Philippine population, read through rates are at an astonishing 90-95% (compared to 1-2% click through rates for digital ads), and cost per effective view is actually competitive, or even lower, compared to Facebook advertising.
Messaging Should be an Integral Part of Your Owned Media Strategy
The recent Facebook algorithm change (where content from friends are prioritised vs. brand content) has led to many marketers rethinking their entire paid-owned-earned media strategy. The realisation is that Facebook is no longer a free channel, nor is it an earned and owned channel. With organic reach of below 1%, Facebook is principally a paid channel for brands. It is a channel that offers scale and efficiencies, but will nonetheless become more expensive over time given the lower supply of business-related content that will be shown to users. As such, it is imperative for brands to re-consider the Owned Media Strategies of pre-2007: building your own brand-owned digital assets such as a destination website, as well as building an opt-in messaging database. Brands should strongly consider having a multi-channel messaging strategy as part of their long-term owned media strategy.
Messaging Still Works
SMS may not be as sexy as creating a video and distributing it on Facebook, but if done correctly, it still absolutely works based on my experience. With SMS, you get 100% reach of the total population, more than 90% read through rates, and cost per effective reach (total cost divide by total people who opened the message) that’s actually sometimes more efficient than social media advertising.
For example, at an average cost of Php0.50 per SMS sent to an opt-in database that’s owned by the brand, the cost to reach 10,000 people 4x a month is around Php20,000. At an average read through rate of 90%, a total of 36,000 people will read the message in a month. The effective costper reach is therefore Php0.55 per person reached. This cost per effective reach is very, very competitive if you benchmark it versus effective cost per view of search and social ads.
Facebook’s Message Broadcast, WhatsApp Business, as well as Apple’s Business Chat platform should provide brands with more options for strengthening their owned media strategy onmessaging.
One-to-One Marketing at Scale
Majority of today’s marketing budgets go to broadcast, one-way marketing. You create a piece of advertising or marketing content, then distribute this en-masse via broadcast platforms such as television, Facebook and Youtube.
The ultimate form of marketing, however, is really all about personalized, one-to-one relationship building with customers - at scale. Marketing nirvana is when you are able to personalise your communications to each and every customer, so that you deliver the right message, at the right time, using the right channel, to the right person.
With the re-emergence of messaging as a viable component of an Owned Media Strategy, brands have at their disposal the necessary tools needed to re-orient their marketing capabilities towards this marketing nirvana of one-to-one marketing at scale. Get customers to opt-in, gather data about them, use that data to personalise communications and make it more relevant to them, then use the various messaging platforms available (SMS, Messenger, WhatsApp, iMessage, etc) to deliver a truly personalised message to each and every person.
Messaging isn’t sexy and it most likely will not win you an award at a prestigious international awards show such as Cannes - but it works!
If you’re interested in developing a multi-channel messaging strategy for your business, do shoot me an email at email@example.com, we’ll develop a proposed messaging strategy for you at no cost.