U.S. SMS Marketing Market To Hit Value .6 Billion By 2025 |Grand View Researc

Posted by Mrudula Anil Karmarkar on June 7th, 2021

The U.S. SMS marketing market size is expected to reach USD 12.6 billion by 2025, expanding at a CAGR of 20.3%, according to a study conducted by Grand View Research, Inc. Use of text messages for promotion and advertisement is gaining popularity owing to increasing number of mobile phone users in the country. U.S. is one of the leading country in terms of adoption of smart phones, aiding the marketers in reaching the target customer. Moreover, cost effectiveness and convenience of reaching the target is anticipated to propel the demand for text message marketing over the forecast period.

The use of Rich Communication Service (RCS) protocol is enhancing the text message system by allowing sending and receiving of high-resolution media files via messages. It allows marketers to make promotional messages more interactive and creative in order to attract customers. The advent of RCS, coupled with technologically advanced smartphones that support advanced messaging features is expected to drive the market growth.

Companies are largely focusing on improving customer relationships and engagement by providing special discounts and offers, tailor-made for customers. The use of SMS for sending such offers helps them to customize messages according to the individual customer. Thus, increasing competition has led to the increased usage of text messages, and the trend is expected to influence market growth over the forecast period.

Click Through Rate (CTR) is an effective performance metric used to understand the effectiveness of a marketing campaign. It helps organizations to gauge the success of a campaign by measuring the number of times a particular advertisement is viewed. According to a report published by Burst SMS, a global online messaging platform provider, SMS has a better average CTR in comparison to any other leading marketing tool. Additionally, text messages also fall better in other parameters such as higher open rate and a lesser number of customer complaints. These benefits, coupled with the better CTR are anticipated to drive the demand for text message marketing over the next six years.

The market is expected to experience considerable growth owing to proliferation of smartphones and increased internet penetration in the country. According to statistics published by the Internet Innovation Alliance, the total number of smartphones in the U.S. in 2016 was 208.2 million and is expected to increase to 270.7 million by 2021. Similarly, as per U.S. Pew Research Center, as of February 2019, 96% of adults in the U.S. own a cell phone, and 81% of them own a smartphone. Studies suggest that text messages have a higher open rate because people always carry their smartphones and tend to open a message as soon as it is received.

U.S. SMS Marketing Market Report Highlights

• SMS marketing market is gaining traction owing to the fact that it eliminates the use of paper used by other means of marketing
• The SMEs segment is anticipated to record substantial growth from 2019 to 2025 owing to increasing use of text messages by small retailers and businesses to send promotional coupons and other offers
• In an attempt to sustain competition, banks are introducing several services. The use of texts for marketing these services is expected to augment the growth of the BFSI segment over the forecast period
• The U.S. SMS marketing market is characterized by intense competition with several players such as Infobip Ltd.; InMobi; Marketo; Amobee, Inc.; Chartboost; Slick Innovations, LLC.; and IBM Corporation offering similar solutions. Pricing and product differentiation is the key to sustain competition.

In addition to a high open rate, text messages offer numerous benefits to the marketers such as affordability, no dependency on the internet, and immediate results through 2-way messages. Additionally, text message allows personalizing promotional offers as per target customers. Marketers can include the name of the customer in the beginning or provide offers on particular products that are frequently purchased by a customer. Personalization of marketing content increases the chances of converting a potential customer into an actual customer.

The demand for SMS marketing is also anticipated to gain momentum owing to introduction of AI for analyzing and using customer data to create personalized promotional messages. AI is used for content creation, optimizing content delivery, improving customer engagement, and reducing response time and expenditure. Although AI-enabled tools are not used extensively as of now, certain companies do have AI support for their applications. For instance, Watson Marketing tool by IBM Corporation uses an AI-powered content management system to enhance communication experience of its customers.

One of the prominent factors inhibiting the market growth is the limitation on the number of characters that can be sent in a single text message. According to the U.S. messaging regulation, the standard length for all text messages is 160 characters. Thus, creating content with limited characters while making a strong impact on the viewers can be a challenging task for SMS marketers. In addition to character limitation, dependency on a service provider to receive text messages is another challenge hampering market growth.

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Key participants operating in the market include Infobip Ltd.; InMobi, Marketo; Amobee, Inc.; Chartboost; Slick Innovations, LLC; EZ Texting; and IBM Corporation. Rising number of domestic players in the country has led to an increased threat to the leading players. However, key players are adopting mergers, acquisitions, and strategic partnerships with an aim to increase their market share and enhance product offerings. For instance, in November 2018, Infobip Ltd. announced a partnership with Teckst in order to simplify the implementation of two-way messaging for enterprises. In order to sustain growing competition in the market, major players are offering innovative solutions to attract customers. For instance, TextMagic Ltd. offers customers an SMS API that integrates text messaging with the customer’s existing business application or software. This helps customers to send messages without accessing the vendor’s portal. Innovation in products and improvement in services coupled with optimized prices are anticipated to intensify the competition in the market.

Grand View Research has segmented the U.S. SMS marketing market based on enterprise size and end use:

U.S. SMS Marketing Enterprise Size Outlook (Revenue, USD Million, 2014 - 2025)

• SMEs
• Large Enterprises

U.S. SMS Marketing End-use Outlook (Revenue, USD Million, 2014 - 2025)

• Retail
• Media & Entertainment
• Travel
• Automotive
• Healthcare
• IT & Telecom
• BFSI
• Others

About Grand View Research

Grand View Research, Inc. is a U.S. based market research and consulting company, registered in the State of California and headquartered in San Francisco. The company provides syndicated research reports, customized research reports, and consulting services. To help clients make informed business decisions, we offer market intelligence studies ensuring relevant and fact-based research across a range of industries, from technology to chemicals, materials and healthcare.

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