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“When you talk about open rates in text versus email and other methods, text wins out 99% of the time.”
Josh Holstein
Founder and CEO
CellaRide
01 INDUSTRY DIVERSIFICATION
You’ve got more options
According to the Cellular Telephone Industries Association (CTIA), consumers are exchanging more than 2.1 trillion text messages per year.1
Options are a good thing. And the messaging space has more options now than ever. In this chapter, we’ll cover two significant industry changes creating more options in 2024:
- Updates in the aggregator space
- Diversification and flexibility of channels
Options for Aggregation
The list of Direct Connect Aggregators (DCAs) are changing and diversifying.
1. More than one path to the carrier
For a while, Syniverse and Sinch were the only direct connect aggregators (DCAs) for 10DLC and person-to-person messaging. Likewise, all toll-free messages had to go through ZipWhip, which our astute readers likely know is owned by Twilio, although operated separately. Now, more providers are forming direct connections with carriers, and are/will be able to bypass the third-party aggregator step.
What’s that mean? More providers with DCA status means there will be more options to choose from if a direct path to the carrier is high on your buying list priorities.
2. More ways to work with The Campaign Registry
The Campaign Registry (TCR) is still the primary vendor for 10DLC campaign registration. For the last few years, carriers have trusted TCR to handle campaign registration. And the drive to register traffic has only become more formalized and reinforced as carriers started adding fees for non-registered traffic in 2022 and 2023.
Brands can choose to go straight to TCR, or partner with providers like Bandwidth for support with registering with the TCR. Often, going directly to TCR is still the most efficient method, but it’s not the only game in town anymore.
Channel Flipping
There are three channels for texting in the U.S. and Canada: Short codes, Toll-free, and 10DLC. Often, companies choose which channels to use arbitrarily, and then stick with their decision. But each has its pros and cons:
Where businesses are planning to spend the most in 2024?²
- 36% 10DLC
- 18.6% Alphanumeric
- 18.1% Toll-free
- 16.3% Short codes
- 11.0% OTT
1. Choose your channel, change your channel
More and more, we’re seeing companies using all three channels for different use cases across one customer journey. It’s beautiful to see businesses seamlessly flowing between two-factor authentication messages on Short Codes, helpful updates on toll-free, and two-way conversations with sales reps on 10DLC.
| Short Code | Toll-free | 10DLC | |
|---|---|---|---|
| Orthodontics Practice | Two-factor authentication Use code 654321 to reset your portal password | Appointment confirmations Your braces removal is scheduled for Tuesday, April 1st at 1:00 PM Reply “C” to confirm or call us to reschedule | |
| School Updates Platform | System-wide updates All classes cancelled tomorrow due to weather. | Local updates Stars Hollow preschool curriculum night is next Tuesday. Reply with your questions. | |
| Retail Fashion Brand | Nationwide sales alerts Black Friday starts now. Get 15% off and free shipping. | Opt-in confirmation Reply YES to confirm you want messages from LUXEATHLETE | Regional promotions A heat wave is hitting Wake County this weekend. Save 20% on swimwear. |
| Car Dealership | Announcements Our newest import dealership is now open on Wade Avenue! | Service Alerts It’s time to get your winter tires on. Call now to schedule your appointment. | Delivery notifications Hi Caitlin, Your Bronco will be ready for pickup today at 5:00. I’ll meet you at the dealership entrance with your keys! |
Not only does mixing and matching your channels give you flexibility across the customer journey, it also adds a layer of redundancy and resilience. You can make sure that you have campaigns registered on all three channels so that if, goodness forbid, one channel has an outage, the issue that one doesn’t halt your existing business on other channels.
Consumer preferences are shifting as more channels become available, too. Here are some consumer preferences to keep in mind when developing a communication strategy your customers’ use case and business type:
Consumers’ Communication Preferences
Consumers’ preferred channel for receiving communication from businesses³
- 43.2% Email
- 24% In-app
- 18.1% SMS
- 14.7% OTT platforms like WhatsApp
2. Choosing your primary channels
As we said earlier, we often see businesses make arbitrary decisions about what channels to pursue first. This can result in poor use/case fit, so if you’re wondering about this too, we’ve got some guidelines for you.
Messaging Lingo: A2P
A2P = Application-to-Person, and it refers to SMS or MMS messages sent from a business to a person. A2P is preferred for business messaging over P2P (Person-to-Person/Peer-to-Peer) messaging—see the glossary for more information.
The OG of text channels, Short codes, are available in the US and Canada and allow for MMS video messages as well as basic SMS messages.
PROS
- Most reliable delivery rates
- Typically offers the highest throughput rates
- Sometimes considered the Cadillac of texting
CONS
- Longest time to market
- Higher startup cost than 10DLC or toll-free
- Not voice-enabled
Now that you’ve gotten an overview of the three most common channels for the U.S. and Canada, let’s see how they fit into the larger messaging landscape.
The Ultimate Messaging Channel Feature Guide
Notifications
| Feature | Short Codes | Toll-free | Alphanumeric SMS |
|---|---|---|---|
| Geographic availability | Globally with country-specific codes | US/CAN | 180+ Countries not including U.S. |
| Voice-Capable | No | Yes | No |
| SMS 2-Way | Yes | Yes | No |
| Multimedia Capable | Yes | Yes | No |
| Expected Time to Market | 8 Weeks | 3-4 Weeks | Varies |
| Expense | $$$ | $$ | $$ |
Conversations
| Feature | 10DLC | Global 2-Way SMS | RCS | Over-the-top (Ex: WhatsApp) |
|---|---|---|---|---|
| Geographic availability | US (CAN as P2P) | Globally | Globally on wifi or cellular data | Globally on wifi or cellular data |
| Voice-Capable | Yes | Yes | Yes | No |
| SMS 2-Way | Yes | Yes | Yes | Yes |
| Multimedia Capable | Yes | No | Yes | Yes |
| Expected Time to Market | 1 Week | Varies | Varies | As soon as same-day |
| Expense | $ | $$$ | $$ | $$ |
It’s about time
Your mileage may vary, but these are the times we’re seeing businesses face for the three main U.S. messaging channels:
How long does it take, on average, for your short code campaigns to be approved?²
- 58.5% A couple of weeks
- 33.7% About a month
- 7.8% More than a month
MEA Financial still runs into new customers who’ve been using outdated short codes, so updating their customers messaging strategy is important. MEA likes having all three U.S. messaging channels in their pocket to serve the unique needs of each local bank.
Factors include:
- Which numbers the bank already has
- What use cases they’re considering
- Their local customers’ preferences
- Cost vs. reliability
By having a provider for 10DLC, Short Codes, and Toll-free, MEA develops a unique messaging plan for each customer.
Options that go beyond SMS
We’re not being dramatic about the future of over-the-top
Billions of users turn to apps like Apple Business Chat, Facebook Messenger, and WhatsApp to chat with friends and communicate with businesses, bypassing their phone’s built-in text inbox.
These messaging applications are known as over-the-top, or OTT, and allow for voice, text, photo, and video messages. Since they’re sent over the internet instead of via phone networks, they’re ideal for international peer-to-peer communication. But, you can’t use them when you’re in an area that doesn’t get internet service.
WhatsApp is the go-to messaging platform for social texting in many countries, supplanting even native Apple and Android text inboxes. WhatsApp Business is also a hit in many regions. “If I hired a local electrician to fix something in my home, he’d send me a WhatsApp message,” said one of our team members in Spain.
OTT isn’t a panacea though. The drawbacks include the requirement for wifi, which still isn’t available in all rural areas. And of course, the recipient has to have that specific app installed on their devices.
More benefits of OTT messaging:
- Wide reach (WhatsApp has 2.7 billion users worldwide)⁴
- Like SMS, these apps are used on a daily basis so you can trust that people will see your messages
- Competitive pricing in an expensive global messaging space
- You don’t have to go through aggregators and carriers-it’s a straighter line to your recipients
Speaking of a rich new world
Rich Communication Services (RCS) is a type of messaging that originated with Android devices, which make up 69.67% of global mobile users.⁵ Apple, however, announced that it would adopt the RCS messaging standard in 2024, adding another 29.65% of global mobile users to the potential RCS audience.
99.32% of global mobile users
use RCS messaging
It’s an alternative to SMS and MMS and has some features you’d typically get with OTT messages, like read receipts and an indicator when the recipient is typing a reply. RCS messages are also free from the media size restrictions of SMS and MMS. Some carriers support up to 100MB attachments vs. the current 500KB constraints for MMS. Another perk: the chance to build trust as a verified sender with a logo for instant brand recognition. Early experiments show that RCS and SMS can play well together as a part of a multi-channel strategy.
You’ve (still) got mail
We’re obviously big fans of text messaging. We love that it gets higher open rates and better ROI than email. But, we’re not ready to break up with email altogether.
We use email for our own business–in marketing, customer survey collection, etc. In fact, you may have heard about this very report through one of our emails.
What we hear from our messaging platform customers over and over is that it’s best to maintain as many diverse channels in your arsenal as possible. Because when it comes to communicating with humans, you need repetition, and you need redundancy.
Mo’ options, mo’ problems?
If you’ve been feeling frustrated with messaging this year, you’re not alone. Increasing requirements like 10DLC campaign registration, increasing carrier surcharges and inconsistent rules and content flagging can make messaging in 2024 feel like a minefield.
“This has been a very interesting and at times frustrating two years… [keeping up with verification] is almost an additional full-time job.”
Andre Prudhomme
Group Product Manager
Fivestars by SumUp
The fact is, companies are still getting remarkably high ROI on messaging. It still beats social media and email for reach:
- It’s still simpler than developing your own app, getting people to download it, and maintaining it.
- It’s much more user friendly than calling with alerts and reminders.
- Text messages still get open rates above 98% where business emails hover around 20%⁶ and organic social reach is typically well under 10%⁷ and paid social prices continue to climb.
Which channel gives you the highest ROI?²
- 44.8% SMS/MMS
- 33.1% Social media
- 22.1% Email
In short, messaging will continue to pay dividends to companies which invest in smart messaging strategies in 2024. So don’t give up if you hit a few snags along the way.
“SMS is the most powerful marketing channel and I think we all have a shared responsibility to keep it that way.”
Andre Prudhomme
Group Product Manager
Fivestars by SumUp
Warning, changes ahead
The messaging space is not without hazards, threats, and significant shifts. To keep your balance, make sure you’re on the lookout for these challenges:
We hate to break it to ya, but you probably already know, the fees on messaging have increased. And they aren’t going anywhere soon. Across the industry, carriers are using surcharges to drive change and improve the health of messaging traffic on their networks, with the ultimate goal of maintaining trust and confidence in texting.
- T-Mobile increased their surcharge for unregistered 10DLC traffic on a bi-monthly basis through the end of 2023
- AT&T is increasing their rates across every messaging channel, in addition to increasing their surcharge for unregistered 10DLC traffic
- Verizon implemented a surcharge for unregistered 10DLC traffic for the first time in 2023
49% of respondents reported facing higher costs due to changes in messaging regulations
Not convinced? Ok get another cup of coffee and a consolation cookie and keep reading. Because while there are certainly challenges, there are a lot of new opportunities in messaging right now.
1. CTIA, “2023 Annual Highlights”
2. Bandwidth business survey
3. Bandwidth consumer survey
4. DemandSage, “WhatsApp Statistics of 2023”
5. Statscounter GlobalStats, “Mobile Operating System Market Share Worldwide”
6. Gartner, “The Future of Sales Follow-Ups: Text Messages”
7. RivalIQ, “2023 Instagram Stories Benchmark Report” and “2023 LinkedIn Benchmark Report”