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Is SMS Still Relevant in 2020?

Is SMS Still Relevant in 2020?

SMS is not only relevant in 2020–it’s a major communications trend. In this article, we cover the reasons why.

There’s a contradiction at the heart of modern marketing. We’ve never had more ways to reach people, and yet people have never been harder to reach.

So, to cut through the noise, we run more ads on social, send more emails, and write more content. Statistics show that we send more than 100 trillion emails every year and tweet 500 million tweets every day.

While doubling down can help hit short-term goals, it doesn’t fix the underlying issue: there haven’t been any genuinely noteworthy digital marketing innovations in the last couple of years. It explains why it costs so much these days to acquire customers.

Put another way, marketers are relying on the same channels they were five years ago, and it’s creating a tough landscape for marketers.

What does all of this have to do with SMS?

Texting is not a new marketing channel–brands have sent texts since the early 2000s–but it’s experiencing a resurgence in popularity.

We’d bet that it’s because brands are searching for new places to talk to customers–places where they aren’t yet sick of hearing from them. What’s even better is that channel preference studies show that customers want businesses to text them.

That’s the 30,000-foot view of why SMS is still relevant today. But let’s dive a little deeper into the numbers to flesh it out.

The Numbers Behind the Growth of Businesses Texting

The fintech startup Stackin’ uses text messaging to give money tips to its target audience–young consumers. The company texts it’s half a million users money tips, which equals more than 100 million text messages to date.

In May of this year, it raised an impressive $12.6 million in a Series B funding round.

The takeaway: entire businesses are using SMS as their main communication channel. They’re raising vast sums of money because of it.

We get it if you’re skeptical of anecdotes like the above to prove a point. But as our 2020 Text Marketing Report indicates, 61% of businesses and marketers surveyed are increasing their text marketing budgets in 2020.

Circle graph outlining plans to increase or decrease text marketing budget

A solid majority of business owners are going to spend more money on SMS marketing than they did a year ago. 

To understand why more and more business owners are investing in SMS it’s worthwhile to look at the performance of three popular marketing channels. 

It’ll go a long way in explaining why SMS is not just relevant in 2020, but a major marketing trend.

Email Marketing

We’re big fans of email marketing at SimpleTexting. But there’s no denying that email CTRs have declined every year (except 2018). This is a long-term trend that spells trouble for those vying for attention in the inbox.

The reason is simple: marketers send 102.6 trillion emails every year. And the numbers keep going up, with 126.7 trillion expected to be sent by 2022. The average email subscriber receives 416 commercial emails per month.

Content Marketing

If we’re big fans of email marketing, we’re even bigger fans of content marketing. The problem is that we’re not alone. Compared to five years ago, businesses are publishing over 300% more per month.

While the Customer Acquisition Cost (CAC) from content still tends to be roughly 30% better than the paid side–it’s much more expensive than it was five years ago.

Source: ProfitWell

Paid Advertising

In an auction market like the one that Google and social media ads use, increased competition leads to what is known as Cost-per-Click (CPC) inflation. The minimum bids for your ads rise as a result.

Just look at what’s happened with Google, where the cost of first page bids rose by 175% between 2013 and 2015 alone.

Source: 8ms.com

The same is true for Facebook, where CPMs increased by 171% in 2017 and CPC by 135%.

While this data is from several years back–these ad platforms are notoriously secretive after all–they paint a picture that is confirmed by talking to our peers. 

It’s harder, and sometimes uneconomical, to acquire customers using the same paid media tactics that worked so well in the past.

How Does SMS Stack Up?

Marketers sometimes fall prey to “Shiny New Object Syndrome.”

This is where we learn about something new and subsequently believe that it’s the answer to everything.

It can lead us to jump into new channels with the blind confidence of a puppy.

So it’s fair to ask whether sending text messages is just another example of this. 

Declining performance across critical channels is just one part of the story–the impressive performance of SMS marketing campaigns is the other.

According to a survey by Frost & Sullivan, over 90% of text messages are read within 3 minutes, compared to 22% for email, 29% for tweets, and 12% for Facebook posts. The same study also calls out the oft-quoted 98% open rates of SMS messages.

If you’re someone whose performance isn’t measured on metrics like open rates and CTRs, you might be thinking, “Great, but who cares?”

The conversion rate of SMS campaigns is as high as 45%. One of our customers, Toroe Eyewear, achieved a 156x return on its text marketing channel.

Why Is SMS Not Only Relevant but Growing in Popularity?

We wrote an entire article on why SMS marketing is so effective. 

Arguably the most significant reason comes back to consumer channel preferences. In our best David Attenborough voice: “Let’s observe this 27-year-old male as he wishes to find out where his delivery is.”

Source: RingCentral

It’s clear from this chart that millennials have the most definite preference for texting with businesses. One study found that millennials love texting so much that if they had to give up either talking or texting on their cellphones, 75% would instead give up talking.

If you’re not convinced by one shiny chart, then here’s another:

Source: TechCrunch

Millennials’ preferences matter more than ever: this cohort surpassed Baby Boomers as the nation’s largest living adult generation in 2019. The Millennial population is projected to peak in 2033, at 74.9 million.

Source: Pew Research Center

Many Factors Contributing to Why SMS is Relevant

There’s rarely just one explanation for why something is the way it is.

As you can see from the above, texting is more than relevant in 2020 because of several interrelated factors. 

The declining performance and the rising cost of other marketing channels, combined with channel preferences driven by demographic shifts, have led to more and more businesses texting.

While we can’t predict what channels will appear over the next decade, we can tell you that everything points to a bright future for SMS.

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