22nd - Mar - 2017
Exploring the brand opportunity of RCS Business Messaging
You’d be forgiven for thinking that the re-launch of the Nokia 3310 was the most significant announcement to come out of Mobile World Congress this year. However, while the world was obsessing about a handset from the past, Google was redefining the future, extending the reach of its Rich Communications Service (RCS) to brands and businesses.
Google first announced the launch of its RCS initiative for consumers last year and has since signed agreements with numerous operators and handset manufacturers to help make RCS a reality. However, this year its focus was on brands and businesses, launching an Early Access Program, designed to bring together selected brands such as Sky, Virgin Trains, and Subway, as well as messaging partners (including CLX), to test and evolve this exciting new messaging standard.
What’s the RCS message?
Often billed as SMS 2.0, RCS represents a major upgrade to today’s A2P (application-to-person) business messaging experience. Delivered through a new, native Android messaging app, Android Messages, RCS is essentially Google’s response to Apple iMessage, WhatsApp and the various OTT messaging apps that have challenged SMS in recent years, to become the preferred channel for person-to-person (P2P) communication.
However, the use of SMS for business or A2P messaging has been surging in recent years. Analyst firm mobileSquared has forecast a market value of $17bn (£13.8bn) this year alone. While it delivers unrivalled ubiquity and reliability, SMS has offered little in the way of innovation to excite marketers looking for rich consumer engagement. This was something that MMS promised, but failed, to deliver due to technical complexity, fragmentation and cost.
This is where RCS wins, enabling brands to engage with consumers using colour, images, audio and video content. RCS also offers OTT-like features and functionality such as real-time and group chat and the ability to automate responses, as with a chatbot. Marketers can also see when and how a person has engaged with their message, providing a trove of data through which to better understand customer behaviour and help optimize their communications.
For example, a message from your airline reminding you to check in for a flight can now take advantage of rich media and interactivity to provide a full check-in experience, complete with a boarding pass, visual flight updates, and terminal maps on demand, all directly within the messaging experience. It’s important to understand, however, that while RCS handset penetration remains relatively low, brands and enterprises will need to use a combination of RCS Business Messaging and SMS to reach their entire customer base.
Here’s an example of how RCS Business Messaging would work in practice.
While consumers on networks supporting RCS can download the RCS app, Gallup estimates that it will take around two years for 42 per cent of Android customers on Sprint to upgrade their handsets to those containing Android Messages as the default messaging app. Furthermore, while it’s difficult to predict, many analysts believe it’s only a matter of time until Apple supports RCS on iOS.
Where does this leave SMS?
Since the start of the decade, the mobile industry has observed the rise of OTT messaging apps, with many falsely predicting the death of SMS. Since then, A2P messaging use has sky-rocketed, but with RCS Business Messaging is about to enter the fray, the long-term future of the SMS has once again been called into question.
There’s an assumption that if brands pour marketing budgets into RCS campaigns, it will, therefore, start to cannibalise SMS revenues. But these predictions are wide of the mark. What’s more likely to happen is that the volume of A2P messaging will, in line with analyst predictions, continue to rise for many years to come.
At the end of the day, RCS Business Messaging is only going to grow the size of the mobile messaging pie, and the bigger the pie gets, the greater SMS volumes will get. This is because SMS will be needed to deliver RCS-like messages to networks and handsets which don’t support the standard, or to RCS users that don’t have a data connection at the moment that an urgent message needs to be delivered.
Revenue and usage patterns are more likely to grow at the expense of app marketing budgets. That’s because when a messaging app behaves and looks like a branded app in every sense, yet can be delivered to the consumer at a fraction of the cost and complexity, then you have a strong case for diverting funds away from apps.
There’s also another significant advantage for using RCS messaging over an app. A message is a response to a need that is generally felt in the moment. It can be delivered on that basis instantaneously, as a branded experience. Apps, on the other hand, rely on the consumer overcoming friction in a stepped process. Do I want the app on my device? When it’s on my device will I remember to use it? etc. This is a particularly important question for small to medium sized brands that simply don’t have the marketing budgets to get their customers to download their app in the first instance and then be front and centre in the mind of their customer all the time to ensure they remember to use it.
For a long time, SMS has been the best option for direct engagement with consumers. Amazing open-rates testify to that fact. And while the OTT players like WhatsApp have had features and functionality on their side, they haven’t made any significant inroads into the market at any significant scale. RCS Business Messaging brings that functionality to marketers in a way that is rich and engaging. It might be overdue, but marketers should welcome its arrival.
Author: Rob Malcolm, VP Marketing & Online Sales at CLX Communications
Article first appeared in Mobile Marketing Magazine.