Capacity Media’s Messaging & SMS World conference took place in London earlier this week, bringing together industry experts and leaders from the messaging and SMS community. As attendees and panelists at the event we at Openmind wanted to delve into the main takeaways from the conference, highlighting the more interesting panel discussions and key topics covered over the two-day event.
The New Battleground Between SMS and OTT
One of the prominent themes observed throughout the discussion panels was the ongoing battle between SMS and over-the-top (OTT) operators. OTT platforms like Viber, WeChat and WhatsApp have surpassed SMS as the preferred peer-to-peer (P2P) communication channel. However, the future of messaging is expected to revolve around business messaging, as enterprises seek to engage with customers for customer support, sales, and other purposes. This shift sets the stage for the new battleground between SMS and OTT operators.
Currently, SMS still dominates business messaging due to its widespread availability on every phone and its existing relationships with mobile network operators. Engaging with SMS providers is often simpler for businesses, compared to the complex onboarding process required for OTT platforms like WhatsApp.
SMS is also expanding its capabilities with increased functionality around Rich Business Messaging (RBM). This allows businesses, for example, to display product ranges and offer in-app purchases directly within text messages. Advancements in artificial intelligence enable SMS to provide real-time customer support chatbots, further enhancing the business messaging experience. Although OTT platforms currently offer superior user interface capabilities, SMS is rapidly evolving to ensure it remains competitive in the business messaging and application-to-person (A2P) market, avoiding the fate it suffered in the P2P messaging realm a decade ago.
The Evolving Landscape of A2P and RCS
The landscape of A2P and Rich Communication Services (RCS) messaging is also evolving. The conference emphasized the importance of industry collaboration, involving mobile operators, device manufacturers, and technology providers, to the success of RCS. Taking a user-centric approach is crucial, catering to user needs and expectations by incorporating features like read receipts and rich media sharing.
Monetization opportunities offered by RCS were an exciting area of discussion. Brands are looking to explore revenue streams through chatbots and personalized marketing campaigns. The panel discussion on the potential of RCS indicated a shared belief in its growing momentum and increasing interest, emphasizing the need for global standardization to ensure widespread adoption and interoperability. The event provided an optimistic platform for unlocking the full capabilities of RCS through collaborative efforts.
Increased Focus on Verified SMS
A key finding from the conference was that although A2P SMS continues to experience growth, its growth rate may be slowing down due to increasing competition from OTT messaging platforms, with WhatsApp leading the way. Businesses are increasingly recognizing the potential of messaging as a powerful tool for customer engagement, presenting a significant 50x growth opportunity for business messaging.
A2P SMS pricing poses challenges for brands who feel they can’t predict where business messaging pricing will go, especially when delivering internationally as different territories have vastly different termination rates. OTT messaging offers more straightforward and stable pricing options, making it an appealing alternative.
The rise of RCS/RBM for A2P messaging can be attributed to the popularity of Verified SMS, which incorporates security measures, blue tick verification and branding elements. A use case was highlighted at the event stating that Verified SMS alone has delivered impressive traffic for brands, equivalent to an entire year’s worth in just eight weeks.
Security and trust are paramount for brands, as SMS fraud costs the industry a staggering $5 billion annually. RCS/RBM is perceived as a secure channel, providing a trusted environment for brands. Additionally, SMS serves as a fallback option for RBM, ensuring uninterrupted communication.
Tackling Artificially Inflated Traffic
A key threat facing the messaging industry is the rise of artificially inflated traffic (AIT), the theme of Day Two’s panel.
AIT is the term used to describe when bad actors take advantage of phone number fields on website forms or other locations to receive, for example, a one-time passcode (OTP) via SMS to generate revenue.
Richard Lemmers, CCO at Openmind Networks, joined the “How do you solve a problem like Artificially Inflated Traffic?” panel at the event, and along with his fellow panelists rejected the idea that MNOs and the A2P value chain profit from AIT, and are therefore disincentivized to solve the problem.
“While MNOs do have short-term targets to increase monetization of SMS and may be more lenient, increased AIT jeopardizes the integrity of the channel” said Lemmers.
AIT reduces the trust and revenue potential of SMS as a whole, and while it is a problem that is well-known in the industry, fixing it remains difficult. Brands can benefit from a perceived increase in subscriber numbers and mobile operators can profit from an increased number of terminated messages, all of which means that it is a complex issue that has no easy solution.
The experts on the panel agreed that this is a problem that needs to be tackled collectively, with agents from all corners of the industry presenting a united front against fraudulent activity, encouraging operators, aggregators and brands to implement and invest in comprehensive fraud prevention strategies.
Our feeling was that yet again Messaging & SMS World highlighted the dynamic nature of the messaging industry and the need for ongoing innovation and collaboration to meet evolving user expectations and business requirements.
To learn more about the topics covered in this article, or to learn more about Openmind Networks, please get in touch at sales@openmindnetworks.com or contact our team of experts online here.
