There are more mobile phone accounts than humans alive. The very latest ComScore numbers just out now June 2015 tell us that three out of every four American cellphone owners already has a smartphone (which sounds great until you notice the USA regularly lags Europe and in the most advanced smartphone markets like Singapore, UAE and my hometown, Hong Kong its well past 90%). Even the Emerging World is rapidly adopting smartphones, the latest Pew survey of only the Emerging World from March 2015 found that one in four owners there (24%) has a smartphone already. And the global sales of new handsets? Gartner just reported this year that for full year 2014, two thirds of all phones sold were smartphones. As I predicted, that day is now coming soon, when every new phone sold will be a smartphone. This year 1.5 Billion smartphones will be sold (vs 300 million personal computers, 250 million TV sets, 200 million tables) and that will be 75% of all new phones sold in 2015 (about 2.0B).
REACH
There has never been a technology as wide spread as mobile. More people have mobile phones than have bank accounts, or have access to electricity or running water. Mobile phones are used by people who can’t even read or write, ie are illiterate, so they even have no use for the pencil and paper. But they have a mobile phone. There are nearly twice as many mobile phone accounts than total FM radios on the planet. Mobile phones outnumber total internet users by 2.5 to one (and the majority of those internet users now use a mobile phone, the non-mobile phone based internet user number is half that, meaning mobile phones outnumber PC and laptop and internet-cafe users of the internet by about 5 to 1).
Oh the ratios. Mobile phones outnumber humans. There are 3 times more mobile phone subscriptions than total televisions on the planet. Four times more mobiles than personal computers if tablets are included with PCs, five times more mobile users than PC users if tablets are excluded (tablets are not ‘mobile’ devices that sounds bizarre, I know, but tablets are ‘ultraportable’ - we’ll talk about that a bit later). Where was I? Mobile phones outnumber fixed landline phones by more than 6 to 1.
BUT ITS THE SERVICES AND APPS
Want services? You hear all that enthusiastic raving about smartphone apps. But globally only one third of all phones in use are smartphones. And Android is the big platform that is used by about seven in ten smartphone owners. My consultancy counted now in May that Android has 1.7 Billion users globally. But also we know not all smartphone owners download apps. About a quarter never download any apps at all. So Android, the biggest of the smartphone app platforms reaches what? About 1.3 Billion pockets theoretically if you have perfect saturation of your app (and probably Angry Birds and Facebook have gotten as close to that as humanly possible). Out of 7.3 Billion mobile accounts, thats a paltry 18%. Yes if you build your mobile strategy out from an Android app, it starts off ignoring and pissing on 82% of the human population. Oops? Did I get your attention?
So you love your iPhone? iOS only has 20% of all smartphones in use, a bit over 400 million active users, when new and old iPhones (many old iPhones have long second lives) are counted. Hey Math Professor, what is that number now? Five percent of all mobile users on the planet! Yes. Five percent. One in 20. You are ignoring 19 customers out of 20 if you launch your beautiful award-winning mobile marketing strategy only on an iPhone. But the same rule holds true for iPhone owners, so if one in four never downloads any apps, its only 300 million that you can reach if you go iPhone. Thats why even app developers now laugh at anyone dumb enough to go iPhone-first.
Hey, then there is Facebook! Yes there certainly is. Facebook gets you 1.4 Billion users globally of which 1.2 Billion are on mobile. Thats a ‘massive’ reach of one in six humans alive. Twitter is a tiny fraction of that as is Linked In or Snapchat or Instagram. The mobile internet overall - all mobile internet (excluding PC internet) has 2.2 Billion users according to 2014 GSM Association numbers or out of total 3 Billion internet users 73% use a mobile either exclusively or at least part of the time. Ah, now you see why Google, Yahoo, Facebook, etc all sing songs of how the future of the internet is mobile. Yet 2.2 Billion internet users, while its bigger than all smartphones in use and nearly 33% bigger than those who download apps, what is that as a percentage of mobile users? Only 30% of all mobile users. Yes. Now what about that new thing for messaging? Whatsapp? It has a reach of 900 million active users (12% of total mobile reach on the planet). Email on mobile? Is about the same as the internet (2.2 Billion and 30% of mobile users). Did you see the stat that now the majority of emails are opened on mobile. Yeah, told ya so this was coming).
400 million iPhone owners of which 300 million download apps. 900 million Whatsapp users. 1.2 Billion Facebook users on mobile. 1.4 Billion Android downloading app users out of 1.7B Android owners. 2.2 Billion mobile internet users. These are all interesting numbers if you like small numbers but SMS text messaging ise used by 74% of all mobile phone users on the planet by SAP latest numbers February 2015. What is that out of 7.3 Billion mobiles? Its a crushing, astonishing, mind-blowing reach of 5.4 Billion active mobile users. SMS text messaging. SMS text messaging today in 2015 has more than twice the active user base than total installed base of all smartphones across all OS platforms, whether they use apps or not. SMS alone reaches more than twice as many pockets as the total mobile internet! If you get every mobile Facebook user to like you, and then you add SMS, those active SMS users who do not use Facebook on their mobile phones is... FOUR and a HALF times BIGGER.
So every couple of years, I sit down for about a week to try to find a new way to rewrite the same old story. If you are doing mobile, it starts with SMS. If you are now getting that bug of being a ‘mobile first’ company like Apple, Google, Facebook, or more surprising entities like JP Morgan Chase bank (‘we’re a mobile first bank’) or the New York Times or gosh, the NBA (yes the basketball association), then mobile first means literally going SMS-first. Mobile first means literally SMS-first. It was so in 1998 it is so in 2015. I was very alone singing songs of SMS at the world’s first mobile internet conference in Amsterdam in 2000, I have massive agreement today from all the major brands on the planet in 2015. Mobile first means SMS first. And yes, this is THAT messaging blog by Tomi you’ve been waiting for (or dreading), that has all the stats everybody will be again quoting for the next years and all the amazing case studies that will startle you to think “why didn’t we think of that” - and next to notice “we can actually do that immediately”. Yes, this is another epic long blog deep into stats history and case studies of excellence. Its how you win in mobile. Its all about mobile messaging. But before you start, go get a cup of coffee and put the coffee machine on for more. This will take you more than a cup to finish.
DIGITAL REACH
So lets start. I know Facebook is all the rage in the marketing circles, come on, I wrote literally ‘the’ book about using social media in business, the signature book for this blog, Communities Dominate Brands with Alan Moore released ten years ago. But if you seriously do mobile and are thinking of going ‘mobile first’ then it can’t start with Facebook that only gets into 30% of all pockets. Your digital strategy has to start with SMS text messaging which reaches the most pockets. So here is the table. Your digital reach:
DIGITAL REACH IN 2015 OF ALL HUMANS ALIVE (7.2B PEOPLE)
iPhone . . . . . . . . . . . . . 300 million download iPhone apps (4% of humans)
Tablets (any OS) . . . . . 600 million owners (8% of humans)
Whatsapp . . . . . . . . . . . 900 million active users (12% of humans)
Facebook on mobile . 1,200 million (1.2 B) mobile users (17% of humans)
Skype . . . . . . . . . . . . 1,200 million (1.2B) on any tech (17% of humans)
Android . . . . . . . . . . . 1,300 million (1.3 B) download Android apps (18% of humans)
Facebook (all tech) . . 1,400 million (1.4 B) active users (19% of humans)
PCs (all types) . . . . . . 1,500 million (1.5 B) in use (21% of humans)
eMail on mobile . . . . . 2,200 million (2.2 B) active users (31% of humans)
Mobile internet . . . . . . 2,200 million (2.2 B) active users (31% of humans)
eMail on any tech . . . . 2,500 million (2.5 B) active users (35% of humans)
Internet on any tech . . 3,000 million (3.0 B) active users (42% of humans)
SMS text messaging . . 5,400 million active users (75% of humans)
Table by TomiAhonen Consulting, June 2015, data collected from multiple public sources 2014-2015.
This table may be freely shared
Of any digital interactive technology, digital media or digital data communications, only SMS reaches more than half of all humans alive. And because there are more mobile phone accounts now than humans, yes 74% of mobile users means 75% of humans alive (as increasingly some of us have two or more phones and often two or more accounts, and very often will use SMS on both/any of those)
WHAT IS MOBILE FIRST
If you are now pursuing a mobile strategy, and are thinking ‘mobile first’ of course you have to go SMS first. Mobile first means literally SMS first. Doing anything other than SMS first is not a ‘mobile first’ strategy, its a sub-optimal - its a "lets screw most of our customers first" - strategy. I know this is often a painful point. Don’t worry. The very latest global Forrester survey of marketing professionals last year found that four in ten who work in marketing worldwide, are in companies where there is no mobile strategy yet, or their mobile strategy is less than one year old. This is exactly in line with the 2013 study of US executives by Strongview which found that of US businesses 76% had a mobile website, 49% used ‘mobile optimized eMail’ (sigh) and only 38% used SMS and MMS. And now back to Forrester in 2014. They noticed that six in ten marketing professionals worked in companies that didn’t collect ANY data on their mobile users, and those who did. Haha, they only collected pretty useless metrics like the click-through rates of banner ads.
Quaint. A metric for an old media that is as relevant as measuring the TV screen sizes in inches as the primary metric when reporting on TV audiences. Get my point? Not how many women or men watch your show, but how many 14 inch TV sets, how many 17 inch TV sets, vs 24 inch TV sets etc. Yeah. That could be measured but who cares. I want to know the audience. And Forrester was very critical of marketers who bother with that obsolete metric of BANNER ad click-through rates for MOBILE. When even the giants of the internet say mobile is a totally different beast, and you have to mobile-optimize, and far better metrics exist than click-through rates of banner ads. Yeah. Like RESPONSE rates for SMS TEXT MESSAGING. (yeah, read my blog article on Big Data for more).
But haha, it is so true, that this is an industry where in most marketing departments the blind are leading the blind. So what do they do? They read up on it, and sadly they get more of the advice from the blind. Thats because for the mobile marketing and media industries, most advertising and media bosses tend to be based in the USA, which is great for digital and social if you are on a legacy internet mindset like the PC based internet (haha or thinking that a tablet is mobile) but the USA is the laggard in mobile. Before you cry 'foul' think of your Apple Pay hysteria last year. Cool technology yes. NFC payments and moblile wallets. This is the future of payments. Now was that invented by Apple? Was that first launched commercially by Apple? Was the North American continent first to NFC mobile payments? No. Not even close. Japan's NTT DoCoMo (the company that launched the total mobile industry 4 years before that famous Motorola phone was sold in Chicago) yes NTT DoCoMo has had NFC based mobile payments and wallets not one year before Apple, not two or even five years. Japanese consumers have had NFC enabled moblie wallet mobile phones for TEN YEARS. Americans have no clue about how advanced moblie is in other countries until they visit those, and then are regularly stunned. There are regular international comparisons and all major mobile industry experts agree, that Japan, South Korea, Singapore, Finland, Sweden, Norway, Denmark are among the global leaders in mobile, and the USA and Canada are very last among industrialized countries. On essentially every metric.
And when we get to the topic of this blog article today, the USA is definitely the laggard in SMS text messaging. And for contrast, the USA is where the internet was born, the PC was born (or that, arguably in the UK) and thus the competence on the PC internet side is strongest (on a worldwide comparative basis, ie this is regularly taught in schools and seminars etc) and the competence on the mobile and SMS side is weakest. So the American experts and analysts and pundits are taken in by things that look and seem familiar, similar to the PC and the internet. So the American gurus and quoted experts, from tech to media to marketing, from MIT to Standford to Harvard, are mesmerized by the iPhone (see above table to see how pointless that is) and fawning over some app download stats (see above table to see how misleading that is).
Again. I KNOW this because I SAW it from literally its beginning. My White Paper at Nokia was the first published free document to discuss how the internet would be put onto mobile. Before working at Nokia, I worked at Elisa Corporation (Helsinki Telephone, Finnet, Radiolinja etc) the world’s first GSM operator/carrier and the first operator/carrier to launch SMS text messaging commercially. I created the world’s first fixed-mobile service bundle in those days two decades ago. Later at Nokia one of my mentors was Matti Makkonen the man who invented SMS (earlier in his career when he was at Telecom Finland, not at Nokia). I chaired the world’s first conference on the mobile internet, chaired the world’s first conference on mobile advertising and wrote the first book on the services and apps for this industry, discussing apps, mobile internet and of course, SMS text messaging.
I was literally the first person to report on the very first downloaded media content on mobile (which was music, ie the original ringing tone, invented in Finland), and the very the first advertising that was launched onto mobile (sponsoring a free news headlines service, also first launched in Finland). I was writing about this ‘mobile first’ industry before Apple and Google came to my backyard. I literally wrote the first books for this business and literally chaired its first conferences. And I’m still here, this blog has been active for 10 years with over 4 million unique visits, my Twitter feed just clocks over to 100,000 sent tweets (all by me along, nobody else typing my Tweets) where I have 15,000 followers. I’ve gone onto publish 12 books which are referenced in over 170 books written by my peers, so my views are very widely accepted. (Oh, and did you notice, no ads on this blog, and no registration, and I have open comments for you and when I have a chance, I even come and chat with my readers here on the blog, all for free).
So I get it. You are conflicted. Some ‘big names’ in media, advertising, marketing and gosh, tech, from ‘Silicon Valley’ and New York and all the mecchas of those old industries, and they sing songs of Augmented Reality and Virtual Reality and NFC and QR Codes and Gamification Mobile Wallets and Earned Media and the Apple Watch and Wearables and Big Data and Internet of Things and Apps Apps Apps Apps, gosh Millions downloading Trillions earning Billions in Apps Apps Apps.
But your fledgling mobile project on a pretty app isn’t really getting the traction you expect. You read about response rates of astronomical amounts, but those first banner ads you did on mobile web didn’t really do that much better than what you got on the internet. And you wonder. What is the matter.
And then you find the goofball Tomi Ahonen on his blog singing songs about what? About SMS? In 2015? In the age of Whatsapp? Come on, can this be worth your while?
COLD FACTS
Only SMS reaches most pockets on the planet. Only SMS. Not apps, not the mobile web, not Facebook, not Whatsapp, not Instagram or Snapchat or Linked In or Twitter. Only SMS.
98% of SMS messages are read (vs one fourth of emails). Most SMS text messages are read within 5 seconds of recepit (vs emails often read only 24 hours or 48 hours from receipt). SMS campaigns gets response rates on the 20% and 30% range (that is no typo, on the internet the click-through rates are in the 0.2% to 0.3% range, ie SMS is one hundred TIMES better at engagement than the internet). SMS is not dying, SMS is growing. SMS is getting more users, SMS is getting more usage, SMS revenues tower over those of smartphone apps or Facebook or any digital platforms. Premium SMS - which is what most SMS based media, advertising, voting, coupons, offers, payments etc - are based on - Premium SMS revenues alone are twice those of total apps economy and growing. So thats your story right there. 20% to 30% response rates. 98% open rates. Read within 5 seconds of receipt.
Why would you ever EVER think of doing anything before doing SMS? Which is exactly what Mondelez ie former Kraft Foods teaches when it says ‘Leave no phone behind’. Its exactly what Coca Cola teaches, when they - this is global advertising juggernaut Coca Cola talking - when Coke says they put 70% of their mobile budget on messaging, 20% of mobile web, and 10% covers all the rest from QR Codes to Augmented Reality to yes, the iPhone and Andorid apps and games. Ten percent. But Coke puts 70% of its mobile budget on what? Messaging! Most of that is of course SMS. That is why the Obama campaign of 2012 was so determined to get every voter to hand over their mobile phone number and give permission to receive messages (ie ‘opt-in’) while the Romney campaign foolishly tried to live without SMS and mobile.
Look the numbers are overwhelming. The numbers are crushing.
SMS reaches nearly twice as big an audience AS THE TOTAL INTERNET on mobile and PC.
SMS reaches twice the total user base of email on both PCs and mobile
SMS reaches two and a half times the ownership of all smartphones, Androids, iPhones and Blackberries etc, combined.
SMS reaches about 4 times the total audience of Facebook, a bit less than 4 times if you include also PC-only FB users, and a more than 4 times if you only count mobile users of Facebook.
SMS reaches six times the active user base of Whatsapp.
I rest my case (no I don’t). This is so obvious. Why on earth would you even write a comment about iPhones or Whatsapp or Snapchat when we have this clear, utterly dominating numbers from everyone, everywhere.
WHAT ABOUT THE USA
So yeah. USA. Fine, I’ll bite. ComScore latest numbers say 75% of all cellphones in the USA are smartphones. Wow beautiful [sarcasm]. So? First off, it means 25% of Americans who now have a cellphone in their pocket, cannot be reached by smartphone strategies - but they all can be reached by SMS. They all can be reached by SMS. And every smartphone also supports SMS. I win. We can quit right here.
But wait, lets take those smartphone users. Brand new May 2015 numbers of US smartphone owners by Ericsson, find that the number 1 mobile use of smartphones by Americans is what? Not apps. Not games. Not the internet. Not email. Not social media. Not instant messenger services like Whatsapp. No. Ah, I know, its obviously voice calls! No not voice calls either. What was it? You guessed it, of course it is SMS text messaging. The mobile service - among US smartphone owners- with the most users is SMS.
What about usage as opposed to users. The same Ericsson survey reported that of mobile services used more than 5 times per day - ie this is pure usage not users - the fifth best was.. Social Media. Remember, this is May 2015 USA numbers. The fifth most used service by SMARTPHONE owners in the USA is social media. Number four? eMail. Number 3? Internet browsing (oops, didn’t see that coming? You thought its apps). At number two of most used services by Americans today on their smartphones, not dumbphones, is voice calls. And the service used most by Americans today on their smartphones is... SMS text messaging! (duh. Told you so. In fact, I told you so quite literally as my keynote to the first mobile internet conference held on the North American continent 15 years ago was on this very topic - and they looked at me as if I had two heads. But here I stand and once again, I was proven correct. By overwhelming data).
You don’t like Ericsson as a source? (the world’s largest technology provider for telecoms operators). Ok, take Pew. Very trusted American research company. Very latest Pew numbers from a USA survey of 2,188 smartphone owners in April 2015 found what? That SMS text messaging came on top again, with clear margin. 97% of USA smartphone owners use SMS texting. Compared to 92% who make voice calls and 75% who use social media or 60% who use the camera function (and far FAR less download apps etc).
What does the future look like? Lets ignore all Americans and only look at the youth. The Facebook generation, in the home of Facebook, American teens. What do they do on their cellphones, its arguable this is the future of what the USA will look like in a decade. Teens today. The latest survey by Niche of US youth, 7,000 teenagers surveyed in 2014, found that in the home country of Facebook, Instagram and Snapchat these are indeed used by the youth. On their phones no less. 46% of American teens use Snapchat on their phones. 51% use Instagram. And 61% use Facebook. But SMS text messaging? Used by 87% of US teens today!!!!!!!!
Let me put it this way. Everybody wants to reach the teens. If you design a campaign that uses Facebook to reach USA teens today, and it somehow magically actually gets used by every USA teenager Facebook active user, and then you add SMS? You reach a 50% LARGER audience than total Facebook teen users.
Ok, then lets say you don’t care about teens. What about older people. Ok. Again, staying in America, the promised land of the internet, Facebook and personal computers, and the laggard in SMS texting. What about them adults then. A survey of NFL Football (this is the ‘not soccer’ American sport where they don’t kick the thing and its not a ball, but they run into each other and fight on the field.. that game, looks like rugby but with armor-plating). RadiumOne survey in 2014 of 1,500 NFL fans. These are predominantly men. They found that yes, of course, fans interact with other fans while watching the games on TV on Sunday. They use social media like Facebook, of course. four in ten Americans do that (41%). Now do any use SMS at all while watching the Seahawks-Giants game? Have a guess. Yes. Its more than Facebook. These are God-fearing, gun-loving, beer-drinking, barbequeing, barfing American dads. Not teenagers. 56% send SMS text messages during games. Again. SMS bigger than Facebook. 2014 stats. Not jsut a little margin there, SMS is one THIRD bigger by TV audience reach among US adult males than Facebook. Why why why start with Facebook if something else is this much stronger?
Yet half of the ‘mobile first’ articles you read make no mention of SMS at all. What is wrong with this picture? You can see I am utterly frustrated by having to repeat stories I told 15 years ago, but this blog has to be written again every few years. This is the first thing you do when you come to mobile. Not an iPhone app. Not a banner ad. You start with SMS. Because a mobile first strategy is inherently an SMS first strategy.
REST OF THE WORLD
So what about the rest of the world then? No need. The rest of the world (except Japan) were fully convinced of the powers of SMS years earlier. I don't need to sing the benefits and reach of SMS when I speak in the world outside of North America. They know SMS in Latin America. They know SMS in Africa. They know SMS in Europe. Boy do they know SMS in all parts of Asia and to some degree also use SMS in Oceania. Some will now say - why did you single out Japan? Japan went full mobile based email already in 1999 - yes before the Blackberry and nearly a decade before the iPhone. In Japan if you ask someone 'do you do eMail on a PC' they will say 'why would you want to limit your eMail to a PC'.Japan is the prototype 'mobile first' country where the internet went to mobile first. So while the rest of the world was discovering the fun of paid SMS messages phone-to-phone, the Japanese jumped straight into eMail from every basic phone to every basic phone (not smartphone required). Then the clever Japanese created a short-message email variation, which then evolved into their instant messaging and social media platforms. But they also introduced SMS but its the only country where SMS is not the biggest messaging platform by users. So while most things we can go study Japan, in the case of SMS, a rare exception, they do have it but they had moved to what we'd call 'OTT' services and premium picture messages like MMS and social media, long before the rest of us did. But I don't need to write this blog to convince Japanese media about the power of mobile haha, I always LEARN from the latest steps they take in Japan.. [Tomi bows his head deeply in respect]
GORILLA IN THE ROOM
Back to our blog for non-Japanese about the power of mobile. Imagine a gorilla in the room where you are now. A wild African gorilla let loose in that room right now. If you’re at your office, what would the gorilla do? Jump onto your desk, toss around the papers, grab your coffee cup, smell it, then throw it across the room. Or if you’re at a Starbucks reading this blog, imagine that gorilla right there in the middle of the cafe, tossing over chairs, grabbing the pastries and eating them, etc. Or in your living room, jumping onto your sofa, jumping up and down, then climbing onto your curtains... A live gorilla.
Now hold that thought. Imagine if you can’t see the gorilla. Imagine all that mayhem happening around you, but you can’t see the gorilla. This is SMS text messaging to many who are new to mobile. They build their cute little smartphone app, upload it to the app stores, and try to get some success in their little mobile project. Meanwhile the market is being wrecked by something utterly unseen - your competitors who have been in mobile longer, already know what works. They all do mobile messaging! So you might then do your mobile web page, and find that actually it gets pretty good traction. And then you look at the interactivity measurements and nearly fall off your chair. What? The mobile stats clearly indicate that your banner ads on mobile are achieving ten times - yes, no misprint - ten TIMES better results than the banner ads do on the PC web. You are extatic. And you have your nice little presentation to the tech conference next week where you proudly report this astonishing finding. That you are achieving 2% or 3% response rates to your mobile banner ads, a glorious achievement over the 0.2% or 0.3% your industry has been seeing in PC web banner ads.
And you are almost laughed out of the room, as you notice your competitors are reporting 20% and 30% response rates. To their SMS (and MMS) mobile marketing campaigns. The gorilla is invisible to you but you are being wrecked by its behavior.
ITS LIKE TALKING ABOUT MOTOR VEHICLES AND IGNORING CARS
That is what I am talking about. Its like discussing supposedly the relevant 'motor vehicles' in trasportation and conveniently forgetting to even mention CARS. Yeah, sure a tractor is also relevant, as is a bus. But ignore cars? Thats what you do if you don't include SMS when talking of mobile services or mobile users or mobile revenues or mobile audiences or mobile industry. In 1998 the first paid media appeared to the brand new ‘mobile internet’ or the mobile VAS (Value-Added Service) or ‘non-voice’ mobile data business. I was there to report that. It started in Finland in 1998. It was built on SMS. Since then SMS became the fastest-growing media business, reaching the $100 Billion dollar annual sales level in less than a decade (Far more familiar media industries like recorded music, cinema and videogaming never reached that level. Note, not that SMS got there faster. Those classic media industries NEVER breached $100 Billion dollars in annual revenues. But SMS did that in less than a decade from the first premium content sold via SMS. SMS text messaging today is the only gorilla in the mobile industry. In every single country. Working on every mobile phone in use. Needing no registration of an account or installation of an app. All mobile marketing and engagement starts with mobile messaging, not with apps or the mobile web.
MOST USED DATA SERVICE
So yeah. My journey into the magical world of SMS started 20 years ago. I think I am one of the oldest experts you can find to talk about this business. I don’t mean by human age, I mean by experience. The person who taught me to use SMS was a fellow colleague at Helsinki Telephone/Elisa at the time, Taina Kalliokoski who later went onto build the world’s first mobile taxi service for the city of Helsinki (consider it a grandfather of Uber haha) and then went onto work at Fujitsu for many years. (Taina is now on the open market I believe so if you ever wanted to hire a deep expert who really knows mobile data inside-out, here is one superguru class expert that I can wholeheartedly recommend. She is currently in Finland but knowing Taina, she speaks several languages and would happily relocate to almost any European country).
I was immediately hooked and loved SMS. Maybe partly that was because I had such a long history already with messaging overall. I sent my first email at college in America in 1983 and had my first ‘internet email’ address in 1991 - the one we now all associate with email, that has the @ sign in the middle. Most email in that decade was still on proprietary local networks at offices with a myriad of bizarre email naming conventions. But also as I was getting into the telecoms consulting racket, first part-time at Helsinki Telephone where we advised other telecoms companies about telecoms competition as the European Union was just requiring all member states to open their telecoms markets to competition, and Finland had been open competition among the first nations in the world, so we had ‘experience’ in that part of telecoms liberalization. Then of course in 2000 when I was working for Nokia, I was tasked with creating Nokia’s 3G Business Consulting Department and I became a full-time consultant which I’ve been for 15 years now. And all along that career, the gorilla has always been - and all of my presentations to any audiences in any markets advanced and not, have featured SMS heavily. I doubt you’ll find many who have consistently held this story while being quoted as an expert. I spoke about SMS in conferences from 1997 and the first press mention of me talking about SMS was in 2001 when IT Week quoted me mentioning SMS based parking services in Norway and how UPS had started to send delivery alerts via SMS. There are not many who were pushing SMS so hard they made it to press quotes back in 2001 (there are some, obviously, like my dear friends Russell Buckley (who is @russellbuckley on TW) and Ajit Jaokar (who is @ajitjaokar on TW) whose first book was about mobile messaging) and even less who might still be doing the SMS Dance today in 2015.
I started my digital journey working at New York City's first internet service provider from before they launched their internet services (a small 'VAR' PC networking company called Optimized Computer Solutions on 14th street). I've seen essentialy the whole life of the internet, and the whole life of the mobile internet. I've seen the ups and downs of both. I was later privleged to get to see awesome tech even before it was launched, working at Nokia and seeing Nokia's visions of the future, and then as an independent consultant seeing all sorts of cool stuff with my clients perhaps most amazing was the miraculous tech of QR codes as an NTT DoCoMo internal demo tech months before QR codes launched. I keep up with the cutting edge, I was the first mobile author to call Augmented Reality the next mass media. So this is not that I'm just stuck in the last century haha. But honestly, in my life, there has never been anything like SMS text messaging! Never. Anything even close to SMS. So I have to talk about it. My job is to help YOU. Apps obviously are not 'it'. What is? SMS is. And SMS text messaging works on absolutely every mobile phone in use today. As today there are more active mobile phone accounts than human beings alive of any age - SMS has a REACH of 7.3 Billion (of which 5.4 Billion of those are active users).
CRASHED INTO WHAT? NOT WHATSAPP. ILLITERACY
So those who’ve followed me on my rants about SMS for a decade can detect that SMS growth has now stalled. What caused it to stop growing in user numbers? Its not what you think. Whatsapp didn’t stop SMS users from growing. We’ll deal with Whatsapp a bit later. Whatsapp took the TRAFFIC not from all users or the majority of users, but of the heavy users. Only one in six mobile messaging users is on Whatsapp and most who use Whatsapp ALSO still use SMS sometimes. That was not the issue.
We hit a barrier even magical SMS can’t solve. Illiteracy. The UN counts 800 million illiterate people on the planet. Take 7.2 Billion humans. Subtract the illiterates, 800 nillion that gives us what, 6.4 Billion. Now whats with the other 1.0 Billion humans. They are kids. The population of humans under the age of 9 is pretty exactly 1 Billion. So if you’re 8 or under, especially in poorer parts of the world, you probably don’t have a mobile phone (some kids as young as 4 have mobile phones in the West).
So this is the planet and SMS:
5.4 Billion use SMS
0.8 Billion are illiterate
1.0 Billion are kids 8 years old or under
7.2 Billion total planetary human population in 2014.
Yeah. We have reached ‘the edge’. There is nothing more to do here now, we have to wait for literacy rates to gradually come up to 100% which the United Nations through such organzations as UNESCO is working on. But for SMS. If your target audience can read and write, they use SMS text messaging. That simple. When I say it reaches every pocket, it really is so. Of the economically viable population who might know how to read a website, or read a newspaper, or use an app - they can be reached with SMS today. Simple.
NOT JUST BIGGEST BUT ALSO FASTEST
Lets switch analogies. Lets have a race. You are allowed to walk, feel free to run. I jump into a jet. Lets race across a continent... I will arrive 300 times faster than you... This is about the scale of the speed advantage of SMS to anything else out there. Anything else out there. Lets listen first to the master.
SMS text messaging was designed by committee but invented by Matti Makkonen, then of Telecoms Finland (now part of TeliaSonera of Sweden). Matti received the Economist Innovation Award for his creation in 2008 and we celebrated with him here on this blog at the time. Matti happened to be my last mentor in my corporate career, when we both worked for Nokia. And I was one of the last people Matti mentored before he retired. Matti Makkonen is a kind of ‘grand old man’ of Finnish mobile telecoms, a true giant, and he was teaching the world about the early mistaken notions and myths about mobile. No, a mobile phone is not ‘the lesser’ of the laptop PC even as it has a smaller screen and tiny keypad. A mobile phone is DIFFERENT. It can do things a laptop cannot - such as we can operate the mobile phone single-handedly. Matti was teaching us about the powers of mobile, on that journey how we went ‘from the device for the ear’ (aka voice calls) ‘to the device for the eyes’ (mobile data services starting with.. SMS).
Yes I know, I know. It sounds so obvious NOW. But Matti was teaching this fifteen YEARS ago when most people outside of Scandinavia and a few advanced markets like Britain, Italy and the Philippines, were still very skeptical of SMS. It was the early lessons I learned from Matti Makkonen, that convinced me to spend Nokia research resources into a global Messaging Study of 6,000 people (one of six global studies I authorized when running the department). And based on those insights, I was able to write in my book M-Profits in 2002 that
- the world will eventually use more SMS than voice (page 15)
- SMS will not kill off email or voice calls, but will be complementary service (page 133)
- SMS is addictive (page 134)
- SMS will evolve to include web links (page 163)
- SMS will reach audiences faster than eMail (page 199)
- SMS creates a more spontaneous lifestyle where meetings scheduled spontaneously (page 199)
- SMS will be challenged by instant messging services but more for price than user numbers (page 278)
- SMS generates return voice calls (page 304)
Remember my book was not about SMS or mobile messaging. It was about how the mobile industry will make its money in a 3G world. Yet all those points I made about SMS turned out totally correct (there were no SMS related forecasts that were wrong in the book, I have not left out ones that weren’t true). But consider year 2002 when M-Profits the book came out 13 years ago. Look at that list of statements. You won’t find anyone else on the planet who promised all that. And all of it came true. All of it. Every single forecast about SMS. And SMS set the record for fastest-growing industry ever from zero to 100 Billion dollars in annual revenues. When I wrote that, it had barely begun earning money.
Why did I do so well? I listened to my mentor, Matti Makkonen. I invited him to become the godfather to my Consulting Department at Nokia where his insights were invaluable. Then we - the department - created a global study of mobile messaging. This gave me enormous insights including - as we wrote in the official Nokia Messaging Study conclusions, early signs suggest SMS text messaging may be addictive. This bold statement I repeated in my book except by then I was convinced it is addictive. And yes, university studies from Belgium to Australia have now confirmed, SMS text messaging is as addictive as cigarette smoking! There is no going back. Ever. The only way for an addict is to ever more addictive (drugs) ie from SMS to OTT Instant Messaging as for example 9% of British mobile messaging users have already done.
Where does this addiction lead us. Now we get the race of one person walking, the other person riding a jet airplane. Check out the facts. Portio 2013 reports that SMS messages are opened at a rate of 98%, vs 30% for email. Thats 3.3x better already. Ofcom in the UK measured that SMS messages are opened within 5 seconds of being delivered. This compared to between 24 hours and 48 hours on email. Wait. 5 seconds vs 24 hours? Thats not 10 times faster. Thats not 100 times faster. Thats not 1,000 times faster. Thats not 10 THOUSAND times faster. No, that is - do the math yourself - 17,280 times faster. SMS is read on average in 5 seconds. Email is read between 24 and 48 hours, on average. This is no contest. SMS is destroying email. And as we just read in Wired February 2015, the total volume of eMail is down 10% from the peak in 2010 so now its becoming true, we have passed ‘peak eMail’ just like how we passed peak landline telephones (total fixed landline telephone connections are shrinking now, they peaked at 1.3B at the end of the last decade and are down to 1.1B by now).
Wait, what of the responses then? The brand new 2015 study by FunMobility of all the different forms of mobile marketing finds that SMS campaigns get response rates of 33%. This is totally consistent with long term trends we’ve seen and reported for 15 years for example the 2012 Mobile Data Association number for SMS text message response rateson average was 26%. The 2011 Nokia survey reported SMS coupons got 25% redemption rates. The numbers are remarkably consistent (with slight growth rate, not decline, over time).
Email reaches 2.5 Billion people (according to 2014 numbers by Radicati covering both PC and mobile users of eMail). SMS has 5.4 Billion active users and a theoretical reach of 7.4 Billion. So at the minimum, SMS reaches 2.2 times bigger audience than eMail. SMS is opened 3.3 times more often. SMS is opened 17,000 times faster, and SMS generates 5.2 times better response rate. What is there left to argue? No wonder everybody from Unilever to BMW to L’Oreal to McDonalds teach us to do mobile messaging.
LIKE WHAT USES ON SMS?
So yeah. What can you do, you ask. Good question. Lets move from the numbers to the case examples. Where should I begin. Take news. Fresh numbers from Fondation Dauphine from France in March 2015 tell us that 20% of French consumers have an app to consume news on their phones. Thats nice [sarcasm]. But SMS? They report that 54% of the French receive news alerts on their mobile phones. This is my point, once again. Its why the Associated Press newspaper guild changed its position on digital delivery of news and said the future of the news industry is not the internet, it is mobile.
Breaking news is pretty obvious. It can be life-saving in an emergency, and national emergency alert systems are being migrated to be mobile-first (ie SMS first) in countries from Guatemala (earthquakes, volcanoes) to the Philippines (floods, earthquakes, volcanoes, tsunamis) to Finland (well, we have no natural disasters but there was once a shopping mall whose roof collapsed from too much snow one winter they did send the alerts first via SMS). Here in Hong Kong we get medical alerts most often because of the city’s immense tourism and travel so its Bird Flu and SARS and Ebola when the nation issues alerts like right now MERS. But obviously Hong Kong also gets its share of tropical storms etc. Even the USA (laggards) are slowly waking up to SMS - that only SMS can reach sleeping citizens in the case of an emergency. Reaching literally every bed. Because why? We sleep with our phone ringing turned on! Its not just that my fave quote, very widely used (without attribution usually) that the mobile is the first thing we see when we wake up and the last thing we see before we fall asleep. Those stats are ‘so last decade’ haha. But not just that - we do sleep with the phone ringing turned ON at night.
No other mass media has ever before or since been able to reach humans while they sleep. I am not now talking about those dedicated emergcy radios which are more like military instruments, which have the ‘wake up’ ability. That is not normal FM radio obviously and is not a mass media. But if your TV is turned off and there is an emergency in your region, a gas leak for example (remember New York City a few montsh ago) that may be on the local TV news feeds, but if your TV is off, its off. And you won’t hear the alarm and you might die. But most people sleep with the phone in bed or near them. And most of those, keep the ringer turned on, just in case. (For example the Nielsen survey of Australian smartphone owners found this in 2014, their number was 71% of Ozzies who sleep with the phone ringer turned on). No other media ever before - but SMS does now - reach us even in our sleep, That is a powerful mass media! A life-saving mass media! And talking about life-saving, I saw just in South Africa last year literally the alert from the car insurance company that arrived in real time, when the driver went through a part of town where the crime rate is high and the car is more prone to carjackings and kidnappings. The insurance company sends this to help its insured drivers be aware of the dangerous areas! How smart is that?
I don’t need to tell you about the Red Cross with its various missions from Haiti to Nepal, and how much SMS can be used to help bring in small donations from concerned citizens to those in need. But lets move from breaking news to information. What about learning.
There are tons of uses now of SMS texting for schools and learning and mEducation, but my fave mEdu stat is now from Kenya. Eneza deployed an exam-prep service via SMS that helps youth prepare for their national exams at age 12. The overall findings are very similar to every other study - of course mobile education tools work and help learning. But I love the fact that for the first time they were able to measure the difference in performance not among those who used it vs those who didn’t (that we’ve seen many times before) but now to measure the effect of the human teacher too! Eneza SMS based exam prep service (which is not free, its a paid tutorial service, it costs 10 cents per week) will help any student on average score 5% better on their national exams compared to those who didn’t use Eneza. But if we bring in the teachers, for those classrooms where the teacher is also involved using Eneza? The gain is 11% better scores than those who don’t use Eneza! I love this! Mobile Education works of course! But it works even better, when the teachers are involved. Mobile won’t eliminate teachers, mobile will help teachers teach even more effectively. Which is why New Zealand became the first country to require that all teachers use mobile in classroom. Not forbidding the handsets as some laggard markets still do (the USA, duh!) but rather, as the future is digital and mobile, lets force the teachers to adopt this digital interactive communciation tech in their classrooms, at their own pace, in their own ways. But it helps the New Zealand youth become better prepared for the information age. Great call Kiwis!
ALERTS ALERTS ALERTS
And what of those alerts? If you have a parcel delivery coming - you might not even know its coming, it could be a gift from a distant relative haha.. What if you come home and receive that annoying notice stuck on your door ‘We tried to deliver your package but you were not home, please call...’. Yeah. Annoying. Why not have the parcel delivery company ask you where you want your delivery made. The last mile. To your registered home, or perhaps your office, or your school, or maybe to your neighbor, or if you are today actually at the hospital because your aunt had an episode and you’re there, why not have the parcel delivered to the lobby of the hospital where you will come to sign for it. This is not delivery service of the 20th century. This is mobile-first customer service of the 21st century. This is not science fiction, UPS introduced this in some areas already in 2013 and Fedex and DHL also now offer this in at least some areas too. And what is the tech that delivers that notice? SMS of course! Duh!
Do we want this as consumers? Textmarketing survey in 2012 of UK consumers found that 89% of British consumers would love to have SMS alerts when their parcels are arriving (but only 26% had received such messages three years ago, its gotten a lot better sincc). What about appointment reminders (doctor’s appointment, dentist, hairdresser, etc) same survey said 84% of the British would like appointment reminders via SMS but only 29% had received any. Again those numbers will have improved in the past 3 years since this widely-reported survey was released. Does this help the business? How about doctor's appointments. Kaiser Health in the USA reported that sending SMS reminders about doctor's appointments saves them 275,000 dollars annually! And its not just the customer-service side of alerts. We can use alerts to create repurchases! This is what Omo detergent (of Unilever brands) uses in South Africa where they send repurchase reminders a bit before the current package is expected to run out, which have boosted repurchase rates up by 60%. Yes, 60% more business, via simple SMS reminder.
Meanwhile what about B2B uses. Can we help our partners and distributors and suppliers by going mobile-first. Yes. And again, best evidence time and again, is SMS. Take Hershey. They need tons of cocoa for their chocolates empire. That comes mostly from West Africa, Ghana etc. What they now offer is the free Cocoa Link. It is free farming info and advice about anything related to cocoa farming. So weather info and irrigation and fertilizer and whatever is the info about optimal plantation and best times for crop collection etc. Cocoa Link is used by over 100,000 farms and produces increases in yields of 15% to 40%. That is essentially free profit increase for the farmer. Its the difference of a bad year and a good year, if your yield that year is up by say 25%. Same work, more cocoa. And what does Hershey feel about this? They NEED the natural resource! Its far easier to get current farmers to produce more of what they already sell to Hershey, than for Hershey to convince farmers who are familiar with another crop, to switch to cocoa.
Or what about getting new business? A fresh April 2015 survey of US employee use of mobile by Heywire found that 70% use SMS to send work-related messages to other employees or clients or business colleagues. Half, 50% had sent SMS text messages directly to clients. And of those, were they an effective method? 33% of American corporate employees who send SMS text messages to clients had CLOSED BUSINESS with the clients using SMS. (For international readers, ‘closing business’ does not mean ‘ending business’ it means ‘signing business’ ie landing sales or contracts or orders etc). That is a whopping 16% of all US corporate employees. One in six has already been so successful going Mobile-First that they had gotten a customer to agree to do business - with using SMS. Mobile first obviously starts with SMS first.
SO THE LOVE LIFE AND SMS
I have reported on this aspect again for 15 years but yes, SMS touches ever moment of our lives. What about the most precious and important things. Our loved ones. Getting into a relationship and maintaining the relationship? Modern relationships are also... mobile first. And if its mobile-first, its of course SMS first.
Lets talk about some recent mobile love-life findings. A survey of 1,500 US dating-age people by JDate found that one third of Americans feel that starting the relatioship via SMS is less intimidating than a voice call or meeting face-to-face. Again, these numbers show the lagging nature of the USA (we’ve seen such numbers and rising fast a decade earlier in Europe and Asia). 25% felt that the response to the first SMS had to come within one hour or that relationship won’t go anywhere (one in ten want the reply within a few minutes). Now can SMS do more to make your first contacts more powerful? You betcha! WhatsYourPrice study of UK office relationships in 2012 found that if you place virtual kisses (letter X ) in your flirting messages, they are more powerful. How much? 57% of office workers in Britain who had been in an office relationship say it started through a flirting message that included virtual kisses!!! And do they work? If virtual kisses are sent in SMS text messages before the first date, the chances of that date becoming ‘intimate’ are 90%. I’m not making this up. But the evidence is irrefutable, SMS is the lubricant to get you into relationships, and while in those, to make them better.
Once you are in a relationship, you are not safe. We’ve seen earlier studies that when people are in relationships they expect a romantic SMS message daily. Not an ‘honey I am running late’ type of ‘factual’ message but rather something like ‘I miss you’. And then the downsides too. Avast 2014 survey of US users found 28% of adults in a relationship will spy inside the partner’s phone. Yes one in four of us do that. Reading your message histories, stored images, phone records, even nicknames of who you have and what ringing tone plays when she or he calls you. When does this happen? When you’re in the shower (take the phone with you to the bathroom!). Again, not an isolated finding, this is totally consistent with similar numbers reported earlier from Australia to the UK. And of the more bizarre numbers, Harris poll in 2013 found that one in ten Americans uses their mobile phones while having sex (and don’t laugh, that too is totally consistent with similar numbers earlier from the UK). When the love is gone, that painful breakup activity will also increasingly be mobile-first. WPP told the MMA Forum Asia in 2013 that 66% Chinese have used SMS to break up a relationship.
ITS ALMOST ANYTHING
Not just love-life. What about general happiness. Like your health. In the UAE there is a government health service that offers advice and assistance via SMS (in Arabic and English) if you want to stop smoking or reduce weight etc. Gosh I have too many examples to ever list in any blog. So you, the business, brand, advertiser, government, or NGO. What can you do with SMS? You can do almost anything. I’ve reported in my books, my seminars and on this blog for literally more than a decade of literally more than a thousand magnificent, highly successful, yes lucrative, revenue-generating and profitable businesses built on SMS. In anything from the farmer in India who turns on and off his irrigation systems with SMS (an Internet of Things type of M2M use) to SMS based multiplayer soccer game (yes, multiplayer game) to even the Facebook and Twitter clone out of Pakistan, SMSall which is built on SMS (and pays the carreirs/operators for every message delivered, yet for consumers its a free service exactly like Facebook or Twitter, all on mobile, working on dumbphones, no smartphone required and no 3G or WiFi network required either). When I wrote about Big Data last month I had several excellent SMS based examples such as how SMS can steal customers from inside a competitor’s store (imagine standing in line at Burger King and receiving an offer from McDonald’s that tells you it knows you’re inside BK). But lets look at some more surprising details.
Sign a contract. Gosh what a painful thing. Find a fax machine, gosh, who still uses a fax machine these days? And get this signature notarized? What a pain. Why can’t all contracts be mobile-first. Yes. Mobile-first contracts, invented in Spain. Turkey for example already does this. You can have your contract signed - legally binding signature - by SMS !!!
Boy does that accelerate that tedious process of contracts. The law in Spain and Turkey and increasingly many European countries now allows any contract to be created so, that the contract states which phone numbers can be used to sign and counter-sign the contract. The SMS produces a record to both sides and is managed by the networks and because the phone number is a globally unique number for any individual, the nearest thing we have to a global social security number - we now have a far better digital signature than traditional pen and paper - a handwritten signature is far more easy to forge than somehow crack into the telecoms network SMS services....
Talking about identity. What about that? Yes, how many banks now do their authentificiation via SMS. Far more secure than any other digital means, and far faster than any human needs. Forgot your password? Call the calling center, give your mom’s maiden name and shoe size - they won’t give you the password via voice call with you. They wont’ send the email or snailmail. They HAD your mobile phone number on record already, they just issue the new password to the mobile phone on record. And your pocket beeps a few seconds later. Safer more accurate and faster. Mobile first always starts with SMS.
So last time with the Big Data blog I wrote about Finnair and how they use SMS to upsell Business Class seats to existing customers who were already booked into Economy Class. But now lets look at getting customers in the first place. Dunkin Donuts introduced an SMS based campaign in Boston to drive up traffic to their stores. 7,500 new customers came in (remember, this is one city only) and of total traffic - this is monster - total traffic to their coffee shops was up 21%, all by SMS. Dunkins found that 17% of Dunkins Donuts customers who received the SMS offers had forwarded them. This is awesome. Similar to the Seattle Sun Tan example I talked about last month.
MARKETING IS MORE THAN ADVERTISING
So once again, lets go back to Fundamentals of Marketing 101. Advertising is part of Marketing. Marketing is much more than Advertising. Within Marketing, there is a category called ‘Promotion’. Advertising is part of Promotion but there are other aspects to Promotion such as Publicity, Public Relations etc. Now, first, obviously we can use SMS in advertising. I saw the worlds first ad on SMS, by Finnish television station MainosTV3 which started to send news headlines via SMS that were funded by a brief sponsor mention at the end of the 160 character SMS. Yes, SMS can be used in mobile advertising, obviously. Its literally the oldest form of mobile advertising. We looked at this at the world’s first conference on mobile advertising at the dawn of the millenium. But that early industry evolved from a Wireless Advertising industry into a ‘Mobile Marketing’ industry epitomized by the MMA the Mobile Marketing Association, which I have worked with on five continents now including many times delivering the keynote to the global event in New York City, the heart of the global advertising industry. They have a rough rule of thumb for the ad industry that half of global ad spend is in the USA. Half of that is spent in New York. And half of New York’s advertising budgets are controlled on Madison Avenue where all the big ad agencies have their headquarters (a bit like Wall Street for the Ad industry). So to get to RETURN to speak to that audience on mAd topics, gosh that is a very special honor. And if you go back to my first MMA New York keynote or the latest, they have one theme in common... SMS. I have discussed literally hundreds of SMS based advertising campaigns over the 15 years that media channel has existed.
So yes, Advertising is part of Promotion. But Marketing is more than Promotion. Marketing also includes Packaging, Distribution, Pricing etc. Marketing is FAR more broad a term than Advertising, but its a common oversimplificication that most normal people do, that they think if you work in Marketing, you are in Advertising. So what can we do with ‘marketing’ defined more broadly? We can use SMS for product design. Product design? Yes, Lays the potato chips company pioneered this idea, have the consumers in given regions submit flavor suggestions via SMS and Lays has used this very successfully from India to South Africa to Guatemala to create locally relevant flavors. Product design via SMS, who knew?
How about manufacturing? Yes, have your consumers do-it-yourself. I know most products can’t be created or recreated purely digitally (at least not yet) so I don’t mean make your car via SMS or fly me to the moon with SMS, but some product manufacturing can be done via SMS. Take postage stamps. An utterly archaic idea, killing trees so we can lick those stamps to put on envelopes to send paper from one address to another. Ok, if you do want to send something, at least lets save a few trees by foregoing the stamping nonsense. What instead? SMS of course. Like they invented in the German Post Office and used from Denmark to Switzerland, you can now order stamps by simply sending an SMS to the Post Office. They issue you with a one-time-unique alphanumeric code. You just write that code onto the corner of the envelope where the stamp would go, and voila! You have a virtual stamp. No trees abandoned their lives for this postal delivery. And the virtual post office can issue stamps 24 hours a day, weekends and holidays included, literally anywhere, and their postage stamps never run out (as they might at a postage stamp automat). Lovely and simple. User-generated stamps powered by SMS. Yes, SMS can replace some manufacturing.
A variation of this is the virtual credit card. A what? A single-use Mastercard credit card code. You have your mobile wallet, you don’t own a credit card, you might not even have a bank account or proper address even. But you have a mobile wallet. So you use the mobile wallet to purchase a singe-use Mastercard code for one sum payment for example an Amazon purchase or airline ticket etc. Its deducted from your balance on your (usually prepaid) mobile account. Then they send you an SMS with the virtual card data that is unique for one use. A 16 digit Mastercard code, an expiry date, and security code. It works for one purchase anywhere that Mastercard is accepted. Sent to you via SMS. This was first done in Kenya by Mastercard together with Standard Chartered Bank and the operator/carrier Airtel. A virtual Mastercard credit card, delivered by SMS. User-manufactured card haha... How magical is this tech? Using SMS.
Then what of Delivery? TxtEagle is a pioneer in this area using SMS and mobile to do fast tasks from translations to computer programming and they cut large jobs into smaller pieces, have a vast army of workers who are paid to work via SMS. So need to translate an article across some less common languages so Google Translate can’t help? Use TxtEagle and they cut up the text into 160 character blocks, each short snippet is translated, then recollected and reassembled together. With multiple sources providing the work its rapidly double-checked for errors and excellent end results. Same for all sorts of information tech work where a mass of workers is very effective. And yes, done with SMS.
So then Fulfillment? Take the tax return, what a pain. Estonia and Norway were among the first to let citizens file a basic tax return via SMS.. Yes. One text and your tax headaches are done. Now, if you are a Cazillionaire with obscure tax-hiding schemes offshore and a myriad of pyramid schemes to hide your money, this is too simple for those 0.01% of the population. But most people? How much of that tax return is utterly ridiculous redundant stuff that the tax authorities already know about you, but on a paper-based system it still needs to be asked. Once you’re registered for SMS tax returns, your phone number is always you, they don’t need your name or date of birth or social security number etc. How much did you earn, what is the tax rate, do you owe us or do we owe you. Thats it. Send. Mobile First government (starts of course with SMS).
Customer service? Well, yes, sometimes we do want to talk to the bank. Other times when we are forced to join that maddening experience called ‘a calling center’ and press 2 for x and press 3 for y and why can’t they immediately let me press 9 to speak to the human? Or could there be a better way? Why not customer service via SMS? Most of the calls of any industry with a calling center, airlines, banks, credit cards, hotels, telecoms, whatnot; most of the calls concern a very limited set of standard issues. My cable TV suddenly doesn’t display HBO. Whats wrong. Whats my balance on my credit card. I want to change this airline booking. Most of the questions are very standard, and only a few are esoteric weird ones that would really need a human (I am moving to Asia but will keep an address also in Europe, what happens to my frequent flier miles if I move my account to Asia and what are my options..). So what if you could just text the company. Send an SMS to ask your questions. Many companies are starting to deploy this kind of technology. M-Info of Shanghai is one of the tech providers who have these types of systems and they report that in industries that use calling centers, a computer algorithm can answer 90% of all text message-based questions. It obviously learns the various synonyms of what consumers might use in how they describe their issues and early the system has to be taught. But imagine the improvement of customer service? 90% of any questions get instant - and accurate - response. The remaining 10% go to humans. Now the humans have a FAR more rewarding job, with real issues and helping with real problems, not just reading the account data for whats my available balance.
That is MARKETING. That is FAR more than advertising. That is customer service. And please read the article I wrote about Big Data where this is going next, there are many more examples there, again, many of those using SMS, starting with Finnair and President Obama’s campaign (I promise you, if you haven’t read this blog, its a use of SMS that nobody else wrote about anywhere, and it is what I call the most powerful SMS text message ever sent. That alone is worth reading that article, which also may help you navigate the world of Big Data when you go mobile-first). So yes, we have IAB stats for the global mobile advertising industry that in 2014 told us most mAd expenditure was in mobile search and banner ads, where mobile messaging only provided 10% of the global mobile advertising expenditure. But that is the narrow definition of only advertising. When all marketing is included its utterly the opposite way. Transparency Market Research just counted in April 2015 that mobile messaging formed 90% of all mobile MARKETING expenditure globally. That is because... mobile-first means SMS-first.
And after we have our customer using our product or service, what about loyalty programs then? Knorr in South Africa invited Knorr cooking products fan to sign up to their opt-in SMS loyalty program by rewarding the customers with airtime in 2014. They got 12 million who participated (38% of South African households!) And then Knorr asked for opt-in to their promotions via SMS. Not everybody wants to voluteer to take ads. Wanna guess what was the acceptance? So the opt-in to Knorr ads, after they first rewarded them wtih a bit of airtime? Take a guess. What would be a good response rate you'd love to have? You have your number. Good. This is what Knorr got: 95% opted in for Knorr amobile dvertisements! (thoee would all be on SMS and MMS by the way). Yes. And did this cost Knorr an arm and a leg for nothing or did it benefit their business? TOTAL KNORR SALES UP 6% !!!
Every major mobile expert tells us about SMS now - simply because SMS works so well. Its what Marketo’s excellent The Definitive Guide to Mobile Marketing tells us. They teach about all the aspects of mobile marketing including apps and responsive design and augmented reality. And they make the clear point that it all starts with SMS (and MMS). Similar themes everywhere by those who know. FunMobility’s 2015 Guide to Mobile Engagement talks about SMS (and MMS) all throughout the excellent resource. Peggy Anne Salz (who is @peggyanne on TW) my dear friend in her book The Everything Guide to Mobile Apps, writes “Encourage mobile app interaction and engagement with SMS.” Peggy was recently on Twitter reminding her followers that if your app loses users, you can re-connect with them, using SMS. SMS is where mobile starts. Its what the MMA teaches us, its what Coca Cola teaches us. And its what this blog has told you for 10 years and if you find any of my presentations from 15 years ago.. you can be sure SMS was there back then, as it still is there now. Yes. In 2015, SMS is still the only Gorilla in the room. If you can see it and understand how it impacts your life you an dance the beast. If you don't see it, it will just wreck your life because your competition has surely already discovered SMS. Just ask sitting USA President Mitt Romney.
DON’T SPY, DON’T SPAM
While I have you, don’t spy, don’t spam. Don’t create mobile marketing using any tech, that spies on your consumers or customers or voters or patients or members. Ask for permission, get opt-in. That takes more work but it makes your customer database FAR more valuable and you can reap huge benefits (read the Big Data blog to see how). And don’t spam. Don’t use SMS or any mobile tech to spam customers. Go for opt-in marketing, deliver value and make your customers delighted by the experience. Like the past CEO of Flirtomatic who is now back with Fjord a digital agency he co-founded, Mark Curtis (who is @fjordmark on TW) tells us ‘everybody loves incoming’ as in SMS messages. If you make it a delightful message they will love it that you talk with them using SMS. Like how? My friend Christopher Gersbo-Moller from Denmark just Tweeted (he’s @gersbo on TW) literally today about a wonderful example of a message that can be nothing but positive. Blood banks going mobile first. In Sweden now you get an notificiation via SMS when blood you donated, has been used to help someone in an emergency. How beautiful is that? This is not spam, this is not spying. This is authentic recognition of your voluntary work, of your contribution to someone else’s health. This is mobile-first thinking and it starts of course with SMS.
And don’t spy. Don’t spam, don’t spy. But you want that location-information. No you don’t. Its the most futile data point that gives almost no actionable insights but is a source for great concern by consumers. Did you even READ the finding by the big global survey last year by NetBisquits? About what we hate about mobile marketing? Four in ten consumers will ABANDON a website if it asks for location information. Why are you spying on your customers. Are you seriously suggesting that Audi will sell me a different car based on which street is my address? No. Starbucks will not prepare a different capucchino to me based on my zip code. What you THINK you want, is to know where your customers are, so you can intrude on their privacy, to spy on them, to stalk them! So they can fear you? Why? To push idiotic spam at them ‘because you are near my store’?
That is moronic! That is a total marketing myth that was literally debunked at the world’s first mobile advertising conference 15 years ago and all major authors tell us thats not the way to go. But some - sorry yes, laggards who are naive to mobile - American tech geeks sing songs of location-based services. You know what is the worst-performing mobile service category of all time. The only one even worse than smartphone apps. Yes. Location-based services. No money there. No success there. Everybody loves the idea of tracking others but everybody hates the idea of others tracking them. This is proven to be a myth. Stop with the sillyness. Stop listening to the clowns. Where is the money? In SMS. What you want is the customer’s opt-in. Who cares if I’m near your store, This is MOBILE ! The industry that magically makes location irrelevant. If location was so precious we'd all be hugging our fixed landline phones today. Mobile means FREEDOM from the tyranny of 'location location location.' Duh. I can buy from you even if I’m on the other side of the planet, if you do it right. What you want is my CONSENT. You want to deliver value to me. And you need to learn to ASK me. What do I want. That is what Kiehl’s did in the USA (they are a cosmetics store chain). They created a loyalty program on SMS that sent only 3 messages per month of various offers to their opt-in loyalty customers. Then after a few months, they ran a survey via SMS. What was the response rate? 81% !!!!!
81% responded to the survey done on SMS !!!
Eight in ten will respond to an SMS survey not in bat-crazy Finland where they never talk and are drunk all day and party all night. Not in bizarro-Kenya where they seemed to just have discovered money when mobile arrived. Not in funky Japan or Gangnam-style Korea. In the USA. Regular women (am guessing - cosmetics store chain - but probably also some men, probably gay) who are already loyal customers. Then asking them what they want. 81% response rate! Via SMS !! Digital interactive opt-in. Don’t spy, don’t spam. Oh, wanna know how their ‘we promise only 3 ads per month’ loyalty program did? Were any coupons redeemed? After six months ie 18 SMS text messages, already 73% had made at least one purchase triggered by these opt-in targeted and personalized ads. Don’t spam. Don’t spy.
MO MONEY
So then lets go to money. Unless you’ve lived under a rock, if you’re in digital you’ve heard of M-Pesa in Kenya. Yes, its normal to have you salary paid directly to your mobile account and pay your groceries on mobile etc. All done on SMS. So lets not look at Kenya. So who invented mobile payments and let me say its not Kenya? No obviously not Apple last year haha. And not Japan either - good guess though. Mobile payments were invented in Finland in 1997. Not by Nokia or any of the local carriers/operators such as my employer at that time Elisa/Radioilinja. No. Mobile payments were invented by a non-tech company, a drinks company. Coca Cola. Coke decided to experiment with the mobile phone exposion happeing then in Finland (we were the world leaders in mobile phone adoption back then) and they created the SMS-payment option for their Coca Cola vending machines. So if you don't have the required coins you can send a text to a specific number. It takes a moment and then the machine comes alive ready to take your order! The coke can price appears on your next phone bill. That is ancient tech obviously but how did that impact vending machine sales? Coke has rolled this tech across its global footprint and reports that the average coke vending machine generates 14% more revenue atter SMS payment is enabled! Same machine! Same location. 14% more money! Why is not everybody using SMS everywhere?
What about... Sweden. Did you know that Swedish busses no longer accept payments in cash. But plenty of ways to pay by electronic means. And whats the most popular. Of course yes, SMS. 65% of all Swedish bus tickets are paid by SMS reports Juniper in 2014. I’m not arguing against more efficient mobile payment systems like NFC based FeliCa in Japan. But SMS delivers. In the USA, Square is a mobile payment provider that runs on an app. Fine. But how to send money to those who are not users of the app? Duh. SMS of course. Thats what Square launched last year.
And who leads with this idea? Denmark. Danske Bank has an excellent multi-platform mobile money systen called MobilePay. At the top is an app, at the bottom is SMS. If you are not a Danske Bank client, you can receive money via SMS. MobilePay has 1.6 Million users in Denmark (a small country) which is 30% of the total population! And MobilePay is already expanding internationally, has cross-border banking functions also to Sweden, Finland and the UK. And get this, the Danish Government is now changing Danish laws so that cash does not have to be accepted by merchants as legal tender starting in 2016. YES. We ARE seeing the end of cash in our lifetime. Its now a race for which country gets there first. As I told you (I wrote also the world's first book on mobile money). Mobile will kill cash (as I’ve been promising). It is not going to be only SMS but - as anything that is mobile-first, even mobile money starts with SMS. And when you need to go to the toilet and don’t have a coin, Denmark invented the pay-toilet lock that operates on SMS. This idea is being adopted globally, for example in India where I just was a few weeks ago.
And meanwhile retail. Macy’s. The world’s largest department store. They introduced a USA-first (this had been done in other countries) in 2013 of SMS purchases during advertising breaks. Text-to-buy. They flashed their offers on TV at the ad breaks and offered consumers the chance to buy. Instantly. Using what. SMS. If you do mobile first, it starts of course with SMS-first. And can SMS yield actual business. Gosh, I have numbers coming out of my ears. Coca Cola in Canada used various means from an app to QR codes to mobile internet to SMS in its 2012 ‘Move to the Beat’ campaign timed with the Olympics. SMS performed best. At 45% response rates! Bulmers the sider was helping its fans find pubs that serve this particular brand of drink (I’m more of a Whisky guy myself). Did it work? 75% conversion rates of offers sent in 2013, using SMS (58,000 servings sold and enjoyed, in pubs). Blue Lion an online social network started to use SMS reminders to users who had stopped visiting the service. They find 10% of those reminded come back. Meanwhile getting new users with SMS. Blue Lion offers SMS messages designed to be easily forwarded with a link to the sign-up page - these get 50% conversion rates. 50% conversion rates! Duh. SMS.
UBER UBER, UBER ALLES
So then you say, but Tomi this is old news. The big revolutions are things like Uber. Yeah. Uber the clever car-hiring app. Sure. Did I mention Taina Kalliokoski up there in the beginning. Her taxi service didn’t run as an app. It ran on what. Obviously it ran on SMS. So you like Uber. Fine. Can you do Uber clones on SMS. Of COURSE you can. Go to India. Check out Autoraja. And Autowale. And mGaadi. These are Uber clones that are done on SMS. You don’t need to have a smartphone app to book a taxi nor to pay for it. SMS can do that and best of all, it works on every phone. Duh. Next.
If you thought SMS was ‘modest’ in its impact and reach, that it was ‘only’ a small short-message platform you an safely ignore, what happens when much of our money, the very heart of our economy, runs on SMS? Perhaps its time to rethink SMS.
SMS IS THE ONLY WAY
..the only way to reach every pocket. We had those stats in the beginning. Does this work in Africa? 2014 MMA stats report that 85% send SMS text messages and 100% of South Africans have received SMS messages. But perhaps the most revealing study ever on mobile behavior was the deep study of US smartphone owners by Pew which took a representative panel of 1,600 consumers who were surveyed twice EVERY DAY for a whole week on their mobile behavior. The deepest mobile usage study ever in any market. This deep Pew study found that during a week - remember this is smartphone owners - the service with fourth highest user numbers was eMail at 88% of smartphone owners. Internet use was third highest reaching 89%. Voice calls were runner-up with 92% of American smartphone owners in 2015 still using voice (8% do not) and the top dog, of course was SMS text messaging where 97% of American smartphone owners today are using SMS at least weekly. By far the widest reach. Only 3% of US smartphone users do not use SMS texting.
But this was a deep study. Not just how many users, but how much usage. They studied it all from games to mobile banking to social media etc. The top 4 most used services across the nation were the same four services as above, but in a different order. Only fourth most used mobile service today for US smartphone owners is voice calling. Yes, fallen to fourth ranking by total usage. On the Bronze position, in third place is the internet. In second place for most usage daily by American smartphone owners was... eMail and the most used service daily by American smartphone owners today in 2015 by Pew’s deepest study ever done of mobile use - is SMS text messaging! Don’t write to me about Whatsapp...
SMS is the most widely used data appliation on the planet. SMS has 5.4 Billion users. SMS generated 120 Billion dollars last year according to Portio 2014 numbers. To put that in context, its bigger than global music industry. Its also bigger than the global videogaming industry. Its also bigger than the global cinema industry box office revenues. Wait, its bigger than music, gaming and movies - combined! And SMS text messaging is the fastest-growing 100 Billion-dollar industry the planet has ever seen, it passed 100 Billion dollars of annual revenues in just 17 years from its commercial launch in 1992 in Finland (yes SMS as an industry is only 23 years old). Note that your ‘social media’ economy or the ‘smartphone apps’ business are nowhere near those numbers. And yes, much of that is ‘operator SMS’ that we use for person-to-person messaging between people. But something called ‘Premium SMS’ is the media channel. That is premiun-priced SMS used for news, advertising, coupons, weblinks, television voting etc. Premium SMS was launched in 1998 in Finland and what is its value today? Transparency Market Research counted in 2015 that last year premium SMS generated 55 Billion dollars in revenues. That alone is bigger than the total global cinema box office busines, or bigger than gaming, or bigger than music.
Here’s a funny stat. What was the value of premium SMS in 2008? It was about 8 Billion dollars when the global apps ‘economy’ was worth 7 Billion dollars. This was when the iPhone went from the original version (a featurephone not a smartphone) to a proper smartphone. And the iOS App Store was born. Yes, before Apple got involved in smartphone apps, the apps economy had grown to be worth 7 Billion dollars on various Blackberry and Symbian and Windows apps back then. So the two business opportunities were about the same size. And Apple came in to energize that apps ‘economy’. And we had several years of hype and hope. And on this blog a certain Tomi T would keep writing about SMS.
So last year, how big was the apps economy for smartphones? About 20 Billion dollars (remember we don’t count tablet apps revenues here because tablets are not mobile, they are only ultra-portable devices, that someone else has to study. But apps including tablets would be worth about $25B). So nice growth in revenues, from 7 Billion to 20 Billion about tripling in size over six years. That works out to an average growth rate of 20% per year, which is nice compared to the global economy but not impressive for this mobile industry. How about premium SMS? In the same time it grew from 8 Billion to 55 Billion dollars. It had an average growth rate almost double that of apps, of 38% per year. YES. Premium SMS service has grown 38% every year while your attention was on the bogus promise of apps.
I was here. I was warning you. I wrote in EVERY story about apps, since 2008, that its not a big opportunity (unless you’re in gaming) and please consider doing SMS instead. Go re-read my articles. EVERY one said the same. Apps shmapps, its a bogus fool’s errand. Its not where the mobile opportunity exists. And please do SMS instead. And I was right. SMS grew twice as fast. Most who make apps will NEVER recover even their their initial investment. Most who do SMS based services see huge successes. Duh. I literally wrote the world’s first book on mobile apps 13 years ago. I know this stuff. That book also talked about mobile SERVICES and from then on, up to now, I have stressed how much better the opportunity is in mobile messaging than in apps. So with that background, why am I talking now about MMS.
A FEW WORDS ABOUT WHATSAPP
Whatsapp? Yeah its growing fast. Yes the heavy users prefer it. Yes, some who are heavy users of Whatsapp have even stopped using SMS and only using Whatsapp. This is exactly as I predicted in my 2002 book m-Profits. SMS will not last forever, it will be superceded by ever better mobile instant messaging platforms. My only surprise was how long it took for something like Whatsapp to appear. And how is their reach? 900 million active users. What? Is that all? Yes. Whatsapp the tech darling and fastest-growing ‘OTT’ (Over The Top) instant messaging system for smartphones has that. 900 million active users. SMS is still the gorilla at SIX TIMES larger than Whatsapp by active users. Yes. 6 Times Bigger. Or if you only do Whatsapp, you’d abandon 5 out of every 6 potential customers.
And how many Whatsapp users are still continuing to also use SMS at least some of the time? Fresh UK stats by Deloitte from January 2015 find that only 9% of UK mobile phone users have abandoned SMS and are using only OTT messaging. If you only do instant messaging you can reach 12.5% of total mobile messaging users in Britain. If you only do SMS, you reach 91% of them. And if you do both there is overlap and the total you reach is 94%. 6% of British mobile phone owners do not use any messaging types. So yes, obviously a smart strategy combines both, but equally, OBVIOUSLY, you have to dance with the gorilla. You start with SMS.
So if 900 million is 'not worth it' in mobile (and seriously, you can't start there if 5 of 6 existing customers are not on Whatsapp) then when? Globally, at its current dramatic growth rate, Whatsapp is likely to hit 3B active user number (same as total internet users today, not a fantastic number but one for us to wake up), yes Whatsapp is on pace to hit 3B in year... 2020. Even then SMS will tower over Whatsapp, but thats when I will start to take those boys 'seriously' as a MEDIA channel. Obviously any sane person uses Whatsapp already today for his or her PERSONAL messaging... This blog is not about personal messaging its using SMS as a media channel. SMS towers over Whatsapp today and will be twice as big as Whatsapp by active users through most of this decade. So you start where the audience is. SMS reaches every pocket.
AFTER SMS COMES SUPER-SMS... ITS MMS
I have been ridiculed for much of the past 15 years about my obsession with SMS and today almost all major experts in the mobile media, mobile advertising, mobile marketing, mobile money and related industries are singing the praises of SMS (that is not yet the full media, advertising and money industries but their top mobiilistas all know the power of SMS). All are telling companies to invest less in apps and more in SMS. So said for example Forrester in its global survey of marketing professionals again last year. That there is this nonsense about the shiny things that are not mass markets or don’t work (Forrester singled out smartphone apps and the silly shortcut of mobile web design called ‘responsive design' as a total fool's errand trying to squeeze an existing web page to mobile. Its totally wrong when MOST internet users already ARRIVE from mobile devices! Duh, .You should adapt a MOBILE website to the legacy PC screen if anything. How backwards is that! But I digress..). And they made a big point about how vital it is for marketers to start with what works and reaches all pockets ie SMS and MMS. Yes. MMS. Again. There are myths and there is reality.
But you say you hate MMS. You tried it once and it sucks. Sure. I agree with you! I tried it too, several times. It truly does suck as a picture-messaging solution from one phone to another. But look at the letters. Is it named PMS? No. Its not a Picture Messaging Service. It is a Multimedia Messaging Service. Multimedia. What does that mean. Pictures AND sound. Multimedia. So first, obvious, pictures. You can put a picture in your message. Can’t do that on an SMS. This is a super-SMS. What we always wanted. Read Twitter today and compare to a few years ago and see all the pictures. One picture tells the story of a thousand words.
Talking about a thousand words. Did you ever feel SMS was too short. Restrictive. That you can’t really expand to your full potential creatively because of the extreme limit of 160 characters? Yeah. So here comes Super-SMS. MMS will let you do LONG MESSAGES. No longer a 160 character limit!
Then there is sound. Gosh, sound. Sound sound sound. Mission: Impossible theme. Star Wars theme. James Bond theme. Music hits us far more deeply than words or pictures. It goes straight to our soul. Sounds! The voice of the favorite news anchor or the famous soap opera starlet or the booing voice of the Hollywood (Bollywood Nollywood) superstar. Bond, James Bond. Shaken, not stirred. We love sound. And you can’t do sound on an SMS. But guess what. MMS is super-SMS. It lets you do sound! Sound in an SMS. How cool is that.
Its more. Its a Multimedia Messaging Service that allows us to embed short video clips too! Yes, take the highlight of the sports event. The movie trailer clip. The famous interview, whatnot. Videos! One video tells the story of 1,000 pictures. We can embed videos in MMS. It is a super-SMS.
We can include QR codes, web links, coupons, do a background to our message that has our corporate branding like a web page, etc. MMS is a magical SMS. Its everything you ever wanted out of SMS. MMS is what SMS wants to become when it grows up. And remember, SMS has already conquerred the world more than Genghis Khan, Coca Cola or Nokia ever did. Nothing on the planet ever had 5.4 Billion users. And that, little oft-ignored SMS dreams that one day it might become an MMS.
CONSUMERS DON’T KNOW THAT THEY KNOW
(Haha, just now re-reading that subheader I am reminded of Rumsfeld's Known Unknowns etc, Now that clown is on TV saying he didn't believe in democracy-building for Iraq. Funny it sure didn't sound that way back listening to Dick Cheney Junior back a decade ago. I guess there are self-aware idiots and unself-aware idiots.) So the best part of MMS? Is that EVERY consumer knows how to open one, to respond to one. No apps needed to be discovered or installed or opened. When your company or organization sends an MMS to the consumer, they think ‘hey there is a pretty picture in this SMS’. They don’t even KNOW its something we call technically an MMS. This is so far, that some companies don’t even use that term, MMS in their messaging about their messaging. Like Nordstrom, which sends MMS to its customers. They just say ‘we send pictures with SMS’. Why not. Every consumer knows how to open and read and respond to an SMS. The behavior is identical with MMS, meaning all consumers who use SMS also know how to open, how to read and how to respond to an MMS. And responding to an MMS can be done with SMS - they don’t need to ‘snap a picture’ in response haha.
So Nordstrom. Brilliant idea by the way. They created an opt-in loyalty program personal shopper service. They train each of their sales attendants to learn the personal wishes and preferenes and colors and brands of their loyalty program customers. Then when suitable items come to the store, these personal sales assistants will send MMS messages to the Nordstrom customers of what has just come in, but with the specific color that customer likes, suggesting a possible pairing of another item, etc. And get this - its click-to-buy. Just send response y and its reserved for you. You can pick it up at the store or we’ll ship it to your home, however you want. Truly personal. And magical. And MMS. Now, Nordstrom - a premium price department store chain - has of course a mobile shopping app and a mobile website - it gets 67% of all of its mobile shopping - through mobile messaging! Duh! MMS.
Again, I have a million MMS examples. I don’t even know where to start. Boarding passes on airlines. We can do them on SMS, we can do them on an app, we can do them as a pdf file. But the most powerful is.. MMS. This is what Twilio teaches us and they use a great illustration of what SouthWest Airlines does, showing a boring SMS text message side-by-side with the pretty MMS which looks like a colorful large boarding pass with SouthWest airlines typeface lettering, a nice big QR code for passing through the scanners and even a nice picture of clouds shot from the skies above to signal you’re about to fly. Lovely. Gary Schwartz (who is @ImpulseEconomy on TW) in his book Fast Shopper, Slow Store gives the measurements from Estee Lauder that ran the identical campaign on SMS and MMS, and they found MMS got three times better response rates than SMS. Same campaign same brands same timing same audience. Toss in a web link you get six times better response rates! Not Tomi with his fantastic promises. This is measured performance on A/B testing in real life, SMS vs MMS. (I told you MMS is Super-SMS, a Magical SMS).
Oh while I mentioned my dear friend Gary. Gary wrote quite cleverly in his book also about tablets. Gary said ‘tablets immobilize people’. Think about it. When you take out your tablet from the briefcase, you want to stop and sit and have a coffee. You want your WiFi hotspot. You want to sit down. You have to operate the tablet two-handedly. Its not really comfortable to use single-handedly but a mobile phone is happily used also single-handedly (for most tasks, not all). So for most users - and don’t write about how you can balance the tablet on your knee and dance the Macarena while juggling five sharp knives while composing tweets. I mean NORMAL people. Normal people can easily walk and use their mobile phones, but once they take out their tablet, they stop. And don’t move around. Tablets in fact, are a sort of ‘anti-mobile’. They are not mobiles, they do not ring in our pockets like my test of what is a mobile. You can’t sit in a moving taxi or bus (that doesn’t have WiFi) and that important message reach you about your uncle and his accident. But SMS reaches every pocket. Even if you’re stuck in the taxi in Sao Paulo’s traffic jams waiting to get to the airport. A tablet is not a sister to a smartphone even though it looks like a larger edition of one. It is a sister to a laptop yes. But only a distant cousin to smartphones. Smartphones are mobiles. Oh, and who told you so. Blah-blah-blah and increasingly all experts now join the view, that a tablet actually is somewhat different from mobile phones, and is more akin to a laptop and should be thought of as a different class of device. And obvously, tablets will never sell in numbers anything like mobile phones (as I said) and will not be adopted as widely as mobiles (as I said).
But lets get back to SMS. Just about all metrics on MMS score higher than SMS. Outspoken 2015 measurements found that MMS gets 20% higher opt-ins than SMS. Now, could anything be more valuable for you to read than this blog today, and these facts about ‘super SMS’ the ‘Magical SMS’ ie MMS? Its everything you ever hoped SMS could be, and consumers are loving messages that come via MMS, without even knowing it is so. They just think they received an SMS with a pretty picture. Do people open MMS messages? Duh. Exact same open rates as SMS because why? Consumers don’t know there even is a technical difference. Yes, 97% open rates and HIGHER response rates! Why are you not doing MMS today?
EARNED MEDIA
Do you really want the one killer stat that changes the whole world? Outspoken 2015 measurements MMS vs SMS finds that MMS messages get eight times higher rates of being shared on social media! You all use eMail. SMS is massively better than eMail. Now the facts are clear, MMS is even more massively better than SMS. You want your earned media, thats your earned media right there! Send clever smart well designed MMS messages to your opt-in loyal customer bases (don’t spy, don’t spam) and watch them going viral. This is the very essence of this blog, Communities Dominate Brands. This is the very essence of the book. MMS is everything we ever wanted SMS to be. A multimedia service that works exactly like SMS.
BUT NOBODY USES IT
Wrong. So so so wrong. We - you and I - hate MMS when we tried to use it for picture-sharing. That is the WRONG METRIC. It is not PMS. Get that out of your head. MMS is a media platform. How big? Well... it reaches (are you sitting down)... four... yes four... billion active users. What? Three Facebooks or one and a half eMails. Thats your MMS right there. Txtfeedback 2014 number. Four BILLION active users of MMS worldwide. Remember these are not primarily ‘sending picture messages’ although that is a well used function across the globe (34% of South African mobile phone owners use MMS says the MMA in 2014 for example) but the majority of MMS revenues is now from media content. Premium MMS in fact. The video highlights and secrets from ‘Pretty Little Liars’ the popular TV show in America. Or tomorrow’s headlines today, via MMS from branded newspapers in China. Remember that French SMS news headline stat? France is by no means the leader in mobile news consumption by messaging. In China 79% of the population consume news on their phones and this is mostly on MMS according to the 2012 Time Mobility survey. MMS is literally everywhere.
And boy is it big. I am sorry I don’t have a current stat for you, the latest we have is a 2012 number from Portio, which said 2012 MMS revenues were 34 Billion dollars globally. But MMS was still growing and Portio’s total messaging revenues have grown from 220 Billion dollars to 251 Billion from 2012 to 2014. If we only assign the same growth rate to MMS thats 39 Billion dollars in annual revenues for MMS. Yes. The fastest new business the planet has ever seen to go from zero dollars to ten billion dollars in annual revenues. MMS would be the wunderkind of the tech industry if it were not stuck in that massive shadow of the success of SMS. Yes MMS is growing at a faster pace than SMS even did. Four billion active users in twelve years is also faster growth than SMS did in its world-record in its first dozen years. Do not think of it as PMS. Its not a picture-sharing service. The vast majority of MMS revenues are content. Its what its says on the box. Its a MULTIMEDIA messaging service. It delivers media for us, in comfortable multimedia ways, videos, sounds, pictures, coupons, QR codes, weblinks and stories that are longer than 160 characters. Its everything you ever wanted SMS to be. Its faster than a locomotive and it can leap over tall buildings. Its.. Super-SMS. Its the Magical SMS. Its MMS. Get your marketing programs up on MMS today.
Do I need to tell you that smartphone apps are 5 years older as an industry and half the size of MMS. Do I need to tell you this. Or can you think for yourself just a little bit? SMS was - as I promised - the fastest industry ever to go from zero dollars to 100 Billion dollars in value. It is the most used data application on the planet. And the one thing that is growing even faster than SMS and whose business is even better, is not Facebook. Its not Whatsapp. Its not Twitter. Its MMS. Sorry. Yes. MMS. Multimedia Messaging Service. Not to share pictures. To deliver news, alerts, coupons, boarding passes, tickets, confirmations, advertising, video clips, sound clips and longer news messages than SMS. Get with the program. And again, have I told this story before. Yes. Literally from the beginning as I did, yes, chair the world’s first MMS conference in Vienna and have witnessed this modern mobile miracle through its amazing growth. But some silly West Coast geeks fell in love with apps and suddenly the tech industry thought that is where the gold is. It wasn’t. And it isn’t. The biggest gold is in SMS, the next gold is in MMS. And you have not missed this boat yet. But there is a gorilla in the room. Its my job to show you where it is and what it does. I don't want this gorilla to hurt you. I want you to benefit from this gorilla and unleash it to wreck the lives of your rivals haha.
RESPONSE IN 3 MINUTES
What can I say. SMS is the undisputed king kong of mobile. Its more used than voice calls (so don't call the device a mobile PHONE or cell PHONE anymore). Its the ultimate digital acrobat doing anything from saving lives to helping farmers to teaching kids to delivering our news to replacing cash to the more frivolous stuff like our advertsing and television voting and opening our toilet doors. We start and end our romantic relationships with mobile so if you're a business, you should learn to engage with your customers too, with a mobile first strategy. Don't spy. Don't spam. Go opt-in and permission based. Talk to your customers and ask them what they want rather than spying on them. Then, when the mobile strategy starts to work, move on to better and stronger means, MMS is your next step. When that is running, then start to look into the mobile web and QR codes, long before doing NFC and AR and smartphone apps. I am talking of course about real services to help your customers and create real business for your company, not winning some awards. Apps, especially AR right now, are wonderful for winning awards. Just don't mistake an app for a mobile strategy. Mobile first starts with SMS, Always.
And finally a quick response. How fast can you expect resposes when you use SMS? The FunMobility 2015 report on mobile engagement report that SMS text messages get responses on average within ... three minutes! eMails are opened within 24 to 48 hours but SMS not only is opened in 5 seconds, they get RESPONSES within thee minutes on average. There has never been anything like SMS. Gotta luv SMS. After SMS we will get even stronger mobile messaging solutions yes. SMS is not the 'end state'. Next comes MMS. Its time is now. Some day in the next DECADE will be the time for Whatsapp. Wake me when they reach 3 Billion users ie about half of SMS and closing in on MMS. The only gorilla in the room is SMS. There is a baby gorilla however already born, that is MMS. All the other tech solutions you can name are mere monkeys in this game.
Hey let me make one shout-out here as this is the 'definitive' article about SMS and text messaging from me for about the next two years. All through the years, my number one source for SMS text messaging related news, and increasingly all sorts of mobile news has been Emily Turrettini (who is @textually on TW) who runs the unparalleled Textually website and who Tweets the best weirdest funniest most heartwarming and just goofball mobile news on a consistent basis, day in and day out, year in and year out. I have tons of fave people I follow on Twitter but I read Emily's Textually religiously before I came to Twitter and now I read her Tweets meticulously and retweet them feverishly. Even among that cast of magnificent bastards that I call my Primus Inter Pares list of my top Twitter gurus, the most brilliant minds of mobile, Emily stands above all others. No. Shines above the others. You are my North Star, forever true to mobile. You are my muse. A true genius for finding the best stories in mobile. And as you can guess from the title of her website, she too is mad about SMS. I love you Emily please never ever stop that brilliant work you do and my best also to all who support you there at Textually,
@Tomi
"So last year, how big was the apps economy for smartphones? About 20 Billion dollars (remember we don’t count tablet apps revenues here because tablets are not mobile, they are only ultra-portable devices, that someone else has to study. But apps including tablets would be worth about $25B). So nice growth in revenues, from 7 Billion to 20 Billion about tripling in size over six years. That works out to an average growth rate of 20% per year, which is nice compared to the global economy but not impressive for this mobile industry."
Last year iOS app sales were about 15 Billion and from the numbers Apple has just released at WWDC, iOS app revenues will be about 20 Billion this year. Assuming that Android would be bigger than iOS we would get revenues more than 40 Billion for Android and iOS combined for 2015. Including tablets of course. It will be extremely interesting to see the actual growth rate for apps in 2015.
Posted by: Lullz | June 11, 2015 at 06:52 AM
Hi Lullz
haha you're the first who managed all through that long blog with enough energy to still post a comment. Haha, thanks. So yeah. Apps. That iOS number is true exactly to the numbers as I reported. It includes tablet revenue. For mobile ie smartphones, of that 15 Billion about 11 to 12 B were from smartphones the rest iPad revenues. This you think is good? This you think is great? There are a handful of lucky millionaires in the apps racket, who hit the lottery. Like Angry Birds owner Rovio. But thats gaming. The odds of winning in gaming apps is .. same as was with mobile games BEFORE the app store, about one in ten. Its like normal hits businesses, movies, books, music. The REST of apps is hopeless desperate and desolate wilderness with no hope of BREAKING EVEN. I think you've been here long enough to have read my last annual apps economy reality blog with all the apps economy numbers last summer? If not, go read that. I monitor all the numbers as they come in, and all the experts who talk about the industry economics. And the slowly growing consensus is - that the only area where revenues are likely in apps are what it was before the iPhone ie business apps, and gaming, and social media. Nothing else has even emerged as a commercially viable area in seven years of Apple magic which includes the last years of Steve Jobs still alive (god bless his name and all worship the Jobs forever, amen).
There is pitifully weak truly lame growth in apps. Its a tech bubble that will burst. The numbers are so clear now there is no future there (except if you like the odds of launching games, Rovio failed 51 times before Angry Birds). Now. This blog was about SMS. There are no guarantees but if you want to launch services in a new tech area, isn't it most logical to pursue the STRONGEST growth area, rather than the second WEAKEST growth area? I appreciate you have a passion for all things Apple but hey, take it from me, seriously. I did write THE book on apps 13 year ago. There is no money in that pit of despair.
PS don't worry, I will be doing once again the apps economy blog of all the existing public domain numbers and stats and analysis, collected into one place as every year... it will only get worse again, this year. More and more of the big experts are now agreeing with me on the apps hype and peak and bubble.
Would you like to comment on the SMS side of this blog which was like 95% of it haha..
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | June 11, 2015 at 07:17 AM
Tomi,
I did not make it completely through the post, yet. (Are you starting to post full books as single blog posts?).
But I think I get the grist of it.
My question is how you see the difference between SMS and Voice? Because the reach of SMS and Voice are comparable and voice calls are also used for marketing (human as well as robo-calls).
Why aren't we seeing the same "hype" for Voice as for SMS? What is it that makes SMS so much better than Voice. I can think of a lot of factors, but have no way of seeing which are relevant and which are not.
Posted by: Winter | June 11, 2015 at 08:31 AM
Hi Winter
Good question.. Voice still has surprisingly strong opportunities but most of SMS power is that its bidirectional but asynchronous. A voice call has to be immediate (a robocall is just a recording and not thus comparable to SMS) so both parties have to be available. But we can respond to an SMS 'in just a moment' or 'later' (or never). Same for both sides. And obviously its fully digital communications so text messages can be machine=read, rather than trying to do voice recognition accurately across all languages and dialects etc... But yeah, voice will still find plenty of new uses - and very relevantly in Africa and parts of poorest Latin America and Asia, there is the illiteracy issue where SMS won't reach but voice services (even robocalls and recordings such as music, news, advertising etc) can be used.
The India premium voice services 'personalized radio via cellular' is already financially bigger than FM radio. Some markets can do a lot with this, but over time I think voice will go like we've seen, shifting to SMS. That shifts to MMS. That shifts to mobile web. That shifts eventually to video etc... The other direction is not really a viable direction, nobody goes back from SMS to email, from email to fax, from fax to telegraphs haha...
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | June 11, 2015 at 09:42 AM
@Tomi
Great article.
While I agree that SMS beat apps. But comparing SMS to apps is like comparing Grape to Banana. It like saying that Wallmart, Carefour is the retail that made most money, therefore, you shouldn't open a dry cleaning store. SMS (as a provider) is only relevant for Li Ka Shing, Carlos Slim, Son Masayoshi. You're not recommending everyone here to open a carier, don't you?
Posted by: abdul muis | June 11, 2015 at 01:45 PM
@Tomi
"Android . . . . . . . . . . . 1,300 million (1.3 B) download Android apps (18% of humans)"
Is it correct that this includes Android tablets? If not, the number seems to be slightly too high. Speaking about Android also implies that tablets are included.
@abdul muis
True. What are the business opportunities for small companies or for those people who can now afford to make an app or two? What kind of SMS business would be possible for those people? Would it be easier for them to go with the apps first?
Posted by: Lullz | June 11, 2015 at 01:56 PM
Tomi,
that was an excellent article as always.
Maybe you could have spent a few words on USSD.
It's not very popular in the west, but serves well in developing countries for scenarios where SMS does not provide sufficient interactivity (mobile banking is the most prominent example).
Posted by: chithanh | June 11, 2015 at 02:47 PM
http://www.zdnet.com/article/microsoft-to-drop-modern-version-of-skype-for-windows/
It sure seems that the message from microsoft to developers is that "Universal Apps" cannot be made to work, even by Microsoft themselves. That's a pretty damming statement to be making to any remaining developers dumb enough to be even thinking of developing for Windows Mobile.
Everyone chant along with me...
NO ONE WANTS WINDOWS ON A PHONE!
Posted by: NO ONE WANTS WINDOWS | June 11, 2015 at 06:17 PM
This is great for Apple. That means the iPhone is compatible with the largest and most important service for mobile, which should mean that Apple is at little risk to be marginalised by services moving to apps.
Posted by: Maggan | June 11, 2015 at 06:18 PM
Speaking of the iPhone, the open sourcing of their Swift will lead to quite a few more Apps being developed for iOS. Apple just raised their chances for survival. A bit off topic for this blog post though...
Posted by: Per "wertigon" Ekström | June 11, 2015 at 11:06 PM
@Maggan:
"... by services moving to apps."
I really don't get the app obsession by the iFools.
Apps are a dead end, they present a barrier between a service and its users - something that needs to be installed before use. That's the absolute best way to lose a good percentage of potential customers right out of the gate.
Apps - aside from games and tools - are a classic 'hip' item, that will die as soon as something else can provide the same quality of service with less barriers.
Just look at the state of things on the desktop: Over the last 20 years more and more things have moved to the web. But now on mobile we see this insane reverse trend: Instead of generalizing a service's usability it gets that dreaded platform lock-in again, all fueled by stupid propaganda of the ecosystem providers whose sole agenda is to keep their users inside their walled prison.
Sooner or later this will all crumble.
Let's be clear here: If I see 'Download our app to...' on any website I switch away.
Posted by: RottenApple | June 11, 2015 at 11:16 PM
We get it, Tomi. Incorporate SMS and MMS into your marketing campaigns because they are cheap, ubiquitous, and people read them. However, if that's all, then why bother with smart phones at all? A cheap feature phone from 2003 works just as well. @RottenApple, apps are useful at actually using the computing power that we have in our pockets and purses. I don't want the Wall Street Journal sending me texts or MMS every time something happens. I'd rather get notifications from an app where I can read more detail, or turn them off if I'm not in the mood to be interrupted all the time.
Posted by: Catriona | June 12, 2015 at 02:38 AM
At the same time some people are saying how Apps are not really needed for almost anything except games. The same people are insisting how iPhone will fail because it will not get the apps first. This sounds extremely strange.
Posted by: Lullz | June 12, 2015 at 08:14 AM
Apps are not needed for anything. Period. What's needed is a better web standard that can handle those supposed 'advantages' of apps without actually having to install a separate piece of software for each service. And trust me, we'll get there once the app mania subsides.
Apps are merely a stopgap measure for better web implementations, they are not created because those services NEED them but because there's some bogus belief out there that apps were 'better' which of course is utter nonsense. It's funny that most of those services that need an app on mobile are doing perfectly fine with a web interface on desktop PCs so it can't just be that current web standards are too bad.
Over time most apps will gravitate back to the web and be made platform neutral - just like things should be. The economics even of sevice apps are far, far worse than web economics.
To update a web site you rewrite a few scripts, do some in-house testing and upload it to the server.
To update an app you need to have programmers carefully testing it, then submit it to the app store, praying that it'll go through without hiccup, if it doesn't rinse and repeat and behold: 3-4 weeks later your customers will get your upgrade. On a web site it could all be in one day while the web programmers can do other upgrades in the coming weeks.
Those crying for APPS! APPS!! APPS!!! are a small but unfortunately vocal minority who have a vested interest in those platform economics (a.k.a. ecosystems) to be kept stable.
Let's be blunt here: It's not Apps, but CrApps! :D
Agreed, though on the common opinion of SMS/MMS. They are a relic that still generates considerable traffic volume but I have little expectations for their long term viability. Over time, smartphones will become even more like today's PCs and you know what? PCs made do without SMS for how many decades? Of course a lot depends on which part of the world you are in, but at least in the US and Europe things will head elsewhere.
Posted by: RottenApple | June 12, 2015 at 08:50 AM
@RottenApple
"Apps are a dead end, they present a barrier between a service and its users - something that needs to be installed before use. That's the absolute best way to lose a good percentage of potential customers right out of the gate."
Yes and No. Apps are just one example of the eternal trade-off between local and server computing. That is, how much must be done on the phone because of network bandwidth and latency and how much can be done "in the cloud".
We see this trade-off move back and forth with the economy of the networks. There is no "Best solution".
But Tomi did not say apps are dead. He just tries to explain that you will not get rich from selling apps on an App store. You can still become extremely rich from offering a service by way of an App. See Whatsapp.
Btw, did you (plural) realize that the most valuable aspect of apps is the fact that they can link phone numbers to on-line identities? When you apply for a store card or any other plastic card, you are asked for your phone number. That phone number identifies your spending habits to a person and then links these spending habits to your on-line identity on Facebook, Twitter etc.. Big corporations buy these store card data and link them to your online identity so they know what ads they should serve you.
Now you know why Facebook paid $22B for Whatsapp. And you know why these companies will insist on their own apps. You cannot extract a phone number from a website visit.
Posted by: Winter | June 12, 2015 at 09:05 AM
Great discussion, thanks guys!
abdul - very valid point about apples and grapes. They are different. I have been saying if you like to do games, apps are a wonderful platform for you. Also if you are not concerned about making money on the app but rather, want it to solve some problem with some other tech your car, your home, your hotel, whatnot, the mobile phone is as Ajit Jaokar famously said, like a magic wand, and for those kinds of uses, apps are great. Apps are a far easier way to win a creative industry award in advertising or media etc, than SMS is. I am not here to talk about obscure uses, and gaming is only a very tiny slice of the overall mobile industry so I give it that relevant focus of about one or two blog articles per year. Beyond that, apps are pretty hopeless. And I still do the apps economy blog once per year.
Now, if you're a student and want to just enhance your CV to get a job, and you are a capable programmer, why not create an app and then put it up for the app stores to maybe make you some dollars. Now the app is actually a CV enhancement for an individual, not a mass media vehicle, even if it gets some tens of thousands of downloads in its first year. That is also great and mobile has again reduced that threshold of what it takes to get into the IT industry. And it works in any country. But thats not a MASS MEDIA.
As a mass media, apps are a hopeless proposition (excluding games where they are equally bad to other gaming platforms). But SMS is the STRONGEST media proposition in mobile. MMS is second best, HTML is third best but in poorest parts of the world, WAP is better than HTML. In some regions USSD is relevant (thanks Chithanh for reminding us) and also most regions voice services. There will be some exceptions, Facebook, Uber.. but that is really a lottery if you want to do that, and launching something like Uber could have been done just as easily on HTML but with a vastly larger addressable market.
But I do not disagree with you that these are separate opportunities and should be examined separately. This blog was about SMS, mentioning apps. I will of course write later my once-per-year story about apps (which will mention SMS you can be sure, as I have every time before).
Lullz - no, that is only smartphones but it is yes, an inflated number because with Android the forked Android paths are mostly not comparable and not part of the true ecosystem as an addressable media. You may have been thinking of that number. But yes, we're at 1.7B Android phones in use and if we say 25% don't download any apps, theoretically the maximum addressable market for Android smartphone users who might download an app from some related app store is 1.3B
Chithanh - thanks. I had a few USSD examples in an earlier draft of the story but left them out as this blog article just ballooned and ballooned into too many words. I have to do USSD at some point separately.
Maggan - of 'services moving to apps' it is actually the other way. Almost universally, when companies have gotten serious about mobile they notice that their mobile web - HTML - version outperforms the apps version BY REACH - and their SMS/MMS outperform both by reach and usage. Heaviest users will appreciate their apps and use them a lot. But those uses - not users, uses - in many cases are very 'peaky'. The measurement tools of the Home Depot app for example, that allow quick measurement of screw sizes, are used heavily when the homeowner has his/her few weeks of home reconstruction at the summer break or builds say an extension to the garage. Then that app is never used on that phone again, while it got a lot of use for two weeks. That is typical. The travel app, (for non-frequent fliers) is used once when planning the family vacation, and the next time it is used... is next year. Lots of apps get this kind of usage. Anyway, HTML gives one interface to get EVERY smartphone and half of dumbphones on the planet, 90% of all phones in the USA and 95% of all phones in Europe (100% in Singapore, Australia, UAE, Hong Kong etc). So HTML reaches more, does't need the various versions, and is FAR cheaper to build.
Then comes the update, for the next phone, do we need to go find that app again and download it. All this is unnecessary barriers to use, because in almost all cases, that company ALSO maintains a good website that offers the same experience. So most branded apps are finding disappointing use, but their parallel HTML versions surprisingly strong usage. And SMS and MMS by far the strongest. I was just talking again today with one colleage who remarked on this blog and said, Tomi you are right on the blog, we see this with our apps and SMS, the SMS versions get huge usage the apps minimal. What happens next? Its obvious, the emphasis goes to the HTML, SMS and MMS versions - the apps get ignored, not updated, become zombies. At least 80% of all apps in the app stores are already zombies.
THEN comes mobile-first for HTML. Now we go from that silly idea of responsive design and go native (or adaptive). As companies go to HTML pages that are designed from the ground-up to be mobile-first, in fact, go to a WEB principle that is mobile-first, then the mobile experience vastly improves, the customers stay longer, engage more and buy more. And the distinction between the disappointing but expensive series of apps vs the mobile web, becomes ever stronger in favor of HTML. Now, the one fly in this oitment is the measurement of apps usage in time. Because apps usage includes gaming - most apps based games have no HTML equivalent even - that distorts the numbers - giving an illusion that 'all apps' have heavy usage. I am hoping to include insights into this in my next iteration of the apps economy/myth blog article later this summer/fall. But yeah. The direction is starting to be the opposite direction, from apps to services. The iPhone App Store was a great wakeup for non-technology brands and companies to come to mobile but the apps are not the way to go. They will sooner or later discover HTML, SMS and MMS. And only then they will find their mobile strategy 'succeeding'. (Except if you're Angry Birds or Facebook)
Ok, will post this, more coming
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | June 12, 2015 at 09:08 AM
More..
(I removed a few comments again that had clearly not read the article)
Rotten - excellent point, thanks. Yeah this is a temporary phenomenon. For games and enterprise solutions, apps have a place. Those existed long before the iPhone and App Store and will continue. A few exceptions will emerge. But as an 'opportunity' apps are already a hopeless space. For most companies who took that knee-jerk reaction of 'hey we need a mobile strategy, lets create a cool iPhone app' - that time has passed and they will quietly retire that app in coming years while building their HTML version, supported with SMS and MMS. We are well past the tipping point on this already and on the 'better side' where the reality exists.
Catriona - hey, I said clearly that this is the start, after SMS come stronger ways to bring value to consumers, audiences, voters, patients, etc. It starts on SMS (today). Next after you have your SMS you add MMS (this is also today). After MMS it depends which market you are in, the industrialized world you do HTML, in the poorer parts of the world you do WAP. Thats it. Nothing else is mass market. You can do voice but as a media thats only really the emerging world. USSD is only a part of the emerging world. Apps are not a mass market anywhere, not even Singapore or UAE or Hong Kong where over 90% of phones in use are smartphones. After HTML the likely next step is video but QR codes, NFC and Augmented Reality are all strong candidates, we'll see, in GAMING you can do apps. Enterprise use you can do apps. Facebook? Comes preloaded on most smartphones right out of the box so it doesn't behave like an app you have to discover and buy, it behaves like a pre-installed feature (the optimal state to achieve, obviously, shows the power of FB).
As to SMS/MMS vs app for news. I quoted you the numbers from France (smartphone ownership roughly on par with USA, a laggard market of Europe). 20% use news via an app, 54% consume news via SMS/MMS. Which is the place to start if your newspaper has not yet gone mobile? Duh. I have NOTHING against doing apps AFTER you reach your mass market. Finnair, the example I wrote about in the Big Data blog, started with SMS but it does absolutely everything. It understands customer relations. If you want Finnair via QR code, you got it. If you want Finnair only via SMS/MMS you got it. If you want Finnair via voice IVR (are blind for example, remember this is Finland, very very oriented to inclusion) yes, you can do via IVR. If you want it via WAP? Yes. Via HTML? Yes (native design). If you want via an app? Yes. But how do they SELL those upgrades to business class? Because EVERY registered mobile user can be reached with SMS, they sell those with SMS. This is my point. Even if you have an app, you can ENHANCE it with SMS. Even if you already have your SMS, and want to launch your app - you can send the direct URL weblink to download the app - via MMS. This is what I mean. Mobile-first STARTS with SMS. I didn't say it ENDS with SMS.
Lullz - good observation (the contradiction). If you remember how I have been arguing this, I have always singled out games in apps (as the area of success). I also, if you remember, when discussing the Mac/Windows analogy have pointed out that the biggest area where Macs were always behind in PC era apps, were games. This will partly be the driver, when gamers see that cool games only exist on Android, then youth will start to desert the iPhones, as on usability, style, features, the differences between the top iPhone and top Android rivals is diminishing. For me, gaming is utterly irrelevant (I was once addicted to gaming and stopped cold turkey, come to think of it, thats just over 2 decades ago. For 20 years I've been clean! Yippee!! gosh I miss my gaming though...) and I would not lose one second of decision time on 'does it support my fave games' but equally, that is the PRIMARY criterion for may teenagers boys and girls. And no doubt, many youg adults too.
But good catch haha... Gosh you guys really do READ this stuff I write... :-)
Rotten - on the SMS/MMS argument you made. Did you mean to post that as just a 'commonly held view' that you yourself do not agree with (relic, traffic but not viable) or do you also agree with that view? I won't waste commenting if you don't hold that view, I do agree, there is a lot of that view around but it is slowly changing for the better, as SMS and MMS will reach a larger audience than HTML for at least several more years, likely close to 2020 before HTML reach matches SMS and MMS.
Winter - brilliant points and thanks for yes good reminder on the apps themselves. but yes, totally agree the ultimate power is the mobile phone number (which leads us once again to the Big Data blog from last month). On this local computing and distributed computing pendulum, excellent point and it swings kind of naturally between Moore's Law and upgraded network speeds, where the 'sweet spot' happens to be. What I don't like is the overhyping of any one area, like recently apps where I think clearly the economic opportunity is not. Some chances yes, and there will also be swings back and forth. But good analogy yes and its part of that pattern which goes back far into tech history haha.
Ok, great stuff, please keep the discussion going and if any of you have seen or found good SMS/MMS examples that I have not mentioned, please do contribute. I am so sick and tired of posting this same article every two years or so, I won't come back to this topic now for a long time again, but I would LOVE to hear of any ideas any of you have heard or seen or read about. You know that as a service, I love them (SMS and MMS) and as a business story. I just hate repeating myself haha so I don't like rewriting old stuff... :-)
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | June 12, 2015 at 09:42 AM
@Tomi,
"But yes, we're at 1.7B Android phones in use and if we say 25% don't download any apps"
Just FYI,
Google say there were billions (1B+) android phone/user that access google play store occasionally.
https://www.youtube.com/watch?v=7V-fIGMDsmE&t=407
Posted by: abdul muis | June 12, 2015 at 11:43 AM
There is a very interesting talk by Mikko Hypponen that explains how the link between off-line and on-line world with phone numbers works.
https://www.youtube.com/watch?t=771&v=pbF0sVdOjRw
(this links brings you to the time where he talks about targeted ads)
The talk was given at re:publica 15:
https://re-publica.de/en/session/our-online-future-worth-sacrificing-our-privacy-and-security
Both the complete talk by Mikko and the conference are extremely interesting.
Posted by: Winter | June 12, 2015 at 01:38 PM
@Winter
Thx you. Nice video.
I still wondering if the fall of symbian has something to do with .....
Posted by: abdul muis | June 12, 2015 at 04:19 PM