This episode shares some great information about text messaging campaigns. Derek Johnson, Founder and CEO of Tatango is today's guest.
We'll let Derek tell us more about Tatango, but it's safe to say that his company Tatango is one of the best known text messaging companies out there today. And a big reason why Tatango is well known is Derek's blogging and conent marketing. He's an absolute thought leader in the space and he's very respected by people in the industry.
I can't say enough about the content that Derek is putting out there. Right now he's focused on video, so be sure to check out their Youtube channel. Just go to youtube and search for Tatango.
If you prefer to read, go to the Tatango blog. It's possible they've written about every single topic in text messaging.
Sick, busy and baby. So this podcast is short. Actually have some very interesting guests coming up, so stay tuned. Today I’m doing a short overview of the top advantages that Facebook Messenger has over SMS. These are the simple simple basics.
For the last few episodes we’ve been talking through SMS- how it works, FAQs etc. We’re going to make a shift in the solo series and talk about Facebook Messenger. We already discussed a little bit about how messaging apps came into being. I just thought of a new analogy that is applicable.
If you’re old enough, you remember AOL in the late 90s. It basically was the internet or at least indistinguishable from the idea of the internet. At some point the walled garden broke down, people figured out how to use URLs and we all realized wow, there’s a whole lot more here than just aol. Messaging is sort of the same. SMS was all there was for a while - like a decade. Now we’re seeing this shift where there is an entirely new space called messaging and SMS is simply a part of that -- but it’s a big big world of messaging.
OK so Facebook messenger. There are downsides and we’ll get into them, but let’s talk about 3 positives first.
Number 1: It’s Free. Yes, you heard that right. Sending a message over Facebook Messenger does not have a cost. You might need a platform to send the message or a developer to build some technology or you need to hire someone to respond manually within Facebook, but… Facebook does not charge for messages the way that carriers do via SMS.
Cost can play a big deal for organizations that are scaled up. Having a million people on an email list is not rare. The fact that sending an email is virtually free has lead to its ubiquity as a marketing channel. 1 Million person SMS lists are rarer, but it can be expensive. If you’re paying 1 penny per text sending 1 million messages to that list will cost at least $10k. It’s just a factor that comes into play.
Number 2: Facebook Messenger is worldwide. We talked about SMS having this amazing ubiquity because it’s installed on every single phone. That’s great, but the market is fragmented. The suppliers of SMS are different in every country. Costs are different and more importantly the setup is different and needs to happen in every country where SMS campaigns are launching.
If you’re a brand that wants to message people in US, Canada, Mexico and the UK. That means 4 different SMS setups, 4 different cost structures and potentially more than 1 aggregator (remember them). If you launch on FB Messengers, it’s one launch and of course 1 cost structure, free, and the build is to a single API.
Combining worldwide and free is a multiplier. One perfect example of these two benefits is messaging for podcasts - go figure. I launched SMS campaigns with podcasts and it went great. The only two problems were - if enough people messaged in to the podcast to actually make a difference, it became too expensive. We could see tens of thousands of people messaging in over the course of a month or so. It’s great response, but podcasts don’t have huge budgets and it’s tough to experiment when the costs are rising a little bit with each message. Also, a penny per text is low…. At high volumes. Almost all campaigns doing thousands of messages, not millions are paying more per text.
Also, podcasts can be worldwide. When a podcast tells listeners to text in, it’s great but the call to action will only work for one country. Doing multiple calls to action isn’t realistic.
So FBM being free and worldwide takes care of these issues and aligns really nicely for podcasts.
Number 3: This is the biggest advantage. Facebook Messenger is connected to Facebook!!
This is probably a 10 hour conversation, but high-level, this connection is a multiplier. Anything that an organization might want to do via messaging can be multiplied by Facebook. One example is a the Facebook Share action. So if my company wants people to take a survey for some type of incentive, at the end of the survey I can ask the person to share on FB and the social aspect means that some of their friends might see it and then click and take the survey.
This isn’t a groundbreaking process - it’s what socials all about. But the multiplying idea comes into play if we can make it easier to share via Messenger (than through the web) then Messenger is multiplying all of the social aspects.
It also works the other way. The first example is Facebook amplifying what the brand does via messaging. The opposite way is that Messenger amplifies what the brand is doing on social. The idea here is that the brand is buying Facebook Ads, can we increase the conversion rates, and value we are getting from the ad by sending the clicker into Messenger rather than a landing page.
This is where I get really excited. With SMS it was always tricky. People wanted to use the channel, but in order to get started they needed marketing to make a TV commercial to drive opt ins. With FB Messenger, marketing can actually get excited about messaging - hey, this will increase ad conversions AND build the messaging channel at the same time.
This is a big deal and it’s just getting started. We’ll be talking a lot more about all of this soon. So if you haven’t subscribed yet, please do so at itunes or wherever you get your podcasts. You can search for us - just type in The Chat Bubble.
Of course if you have questions or feedback, message us on Facebook - eh - we are The Chat Bubble there as well.
We’ll be back soon with more, thanks for listening.
SMS, Facebook Messenger, WhatsApp or iMessage?
This answer is evolving. It’s now October of 2017 and I think this answer might be different in the future. The short answer is SMS is the dominant channel right now, but in the future one of the messaging apps might be a better choice.
The question really boils down to SMS broadcast vs. Messenger Apps, and right now it’s only really Facebook. Let’s go through the SMS positives.
First, it’s ubiquitous. It’s installed on every phone.
The other big positive for SMS is there is a well established ecosystem of vendors and case studies and use cases. It’s possible to copy what other people are doing… and start to do it for your organization.
It’s sort of the place to start in messaging.
The list of cons for SMS is growing. A few years ago there might not have been any cons at all and now there are cons… Although a few years ago I worked for an SMS company so maybe that’s why I didn’t see any cons.
First, SMS is expensive. There is just no way of getting around the per message cost. Even on the super low end we’re talking a penny or two per message. It doesn’t seem like much, but sending 10k messages costs $200-$300. All this means is that you have to have a plan to make each text worth more than a few pennies. It’s not hard, but it does rule out some use cases.
Second, SMS might have different limitations in different countries. If you’re doing international campaigns, SMS is tough. If you’re working in a single country that isn’t America it’s good to understand if people use SMS in that country.
My bigger worry for SMS is that there are very capable companies encroaching on the messaging territory. Specifically Facebook, iMessage and potentially Google. SMS will always be on the phone, but I’m worried that the channel will seem old soon. It’s the default, but the best companies in the world are trying to displace it.
The iMessage move is incredibly deft. They step in front of the text message and almost consume it, without the user knowing. I guess the takeaway on this point is that SMS is no longer a sure thing. In the past it was the only/best option, now the door has been opened to competition.
There is an interesting advantage for Facebook Messenger. It’s the only messaging app that’s connected to an ad network. With SMS a brand needs to find a way to build a list. Maybe that’s the web, maybe that’s a TV commercial or live event. But the brand needs some type of campaign to drive the list building. With Facebook Messenger, it’s obvious, you can drive messages from the ad network.
Of course Facebook has it’s own disadvantages, most notably that you don’t own your list and cannot do certain types of marketing messages. We’ll get into all of this soon. Facebook is the next messaging channel that we’ll be digging in to.
OK next FAQ.
SMS - broadcast or peer to peer?
This is not a tough decision. Broadcast messaging and peer 2 peer are completely different things and they are not mutually exclusive, so this isn’t really an either or situation.
Peer to is sort of like advertising on steroids and broadcast SMS is like email on steroids. I say that peer to peer is like advertising because it’s not permission based and it’s interruptive. Peer to peer is like an advertisement that happens via SMS and then is followed with a personal conversation. The best analogy is telemarketing - the consumer’s phone rings and then someone wants to talk with them.
First let’s talk about the benefits of P2P. It can be highly targetable. The organization launching the P2P campaign brings their own list of numbers, so they can use any data vendor or their own lists to target and reach the right people.
P2P is also really engaging. SMS is a very personal and powerful channel and the campaign is powered with a real person talking to the target users. I guess a one on one conversation would be more engaging, but this is as close as you can get - and texting scales much better than calls, because one operator can be talking to more than one target person at a time.
The other advantage of P2P is that an organization will see results really quickly. As soon as P2P texting starts, we’d expect to see results coming in.
Now the downside of P2P. First, it can be very expensive. You’ll have the vendor costs, but then there is also a cost for a person to do the P2P texting. This concept of P2P launched during the presidential campaign where there are plenty of volunteers, but the dynamics change when those volunteers need to be compensated.
The other downside of P2P is that the organization is not necessarily building an asset. So maybe a political campaign can pay $1,000 and do P2P texting and find 100 volunteers for the event. But if the same organization wants to do another event, they’ll need to do P2P again and find more volunteers. There is no inherent opt-in or list building built in.
Less quantifiable, I think there is a real concern about texting people that haven’t opted in. It’s ok when it’s a presidential election and almost everyone in the country is paying attention. But it is ok , when it’s a non profit asking for a donation? What happen when it’s a business letting you know about their new car insurance options? It’s always a little risky when an organization is intruding in people’s lives.
Onto broadcast messaging and let’s talk about the pluses.
An SMS list is the strongest list that an organization can build. These are people that are interested enough to give the brand or organization their phone number. And then the organization can communicate with the person over SMS on an ongoing basis. The organization is building a list which is an asset - just like an email list.
With broadcast SMS if you incorporate calls to action from media, the SMS call to action can increase all of your results from the media campaigns.
The other big plus is that the SMS list will route people to other assets - SMS is a great way to collect other data and information. So the first best practice of broadcast SMS is that you should ask for the user to reply with their email address.
The big downside of broadcast SMS is that when a company launches, they are starting with a list of 0. For broadcast SMS the brand is building out this channel, given that people need to opt in, there is just no short cut - the organization needs to spend time and effort to build the list. It’s obvious, but this can be a hurdle.
I sold SMS technologies for a long time and there was a lot of selling this dream of the channel. We would eventually get to this point where the buyer would ask, OK where do we get the list? The answer is… well you need to find a way to get people to opt in, here are our ideas. It forces the buyer, who might be in the communications department to now go talk to marketing, because they need to find a way to promote an SMS call to action.
So overall with this question of peer to peer vs. broadcast messaging. It’s not a valid question. It’s kind of like saying, should we do Twitter or should we build our email list? Other than both being on the SMS channel, they are basically unrelated. I wouldn’t consider them substitutes in any respect.
Broadcast messaging is definitely a bigger, more long term initiative. The longer you do it, the bigger the asset and more valuable the initiative. P2P can show results faster, but campaigns are not cumulative. They don’t build towards anything necessarily.
Short code or long code? Unique short code or shared? Vanity or random Short code?
Finally a simple one.
Peer to Peer messaging forces a long code. Mobile Donations force a short code.
If you’re a small business doing reminder type messaging, it’s fine to use a long code from the local area code.
Anyone that has calls to action in media - text JOIN to join the list should be using a short code. It looks really shitty when text calls to action are based on a long code.
For anyone doing any type of volume - 1 or 2 thousand messages per day, I would recommend a short code.
So I guess all of this breaks down to broadcast messaging means short code and P2P and reminder messaging means long code.
For the question of shared or unique. First off, if you’re getting your own short code, get a vanity code and make it something easy to remember. It doesn’t matter what the code spells because it’s never promoted that way. PEPSI if they have a short code, it’s probably 73785 because that spells pepsi on the keypad. But they would never advertise text CONTEST to P-E-P-S-I. They would spell out the number. And it’s an ugly number. It’s better to get 222333 or something that’s just easy.
Along the same lines, if you’re going through the process of getting a number, it’s best to get a vanity short code. It’s worth it to get a number that you like, vs a randomly assigned number that won’t be as easy to recognize or remember.
But back to the question, should you get a shared short code or get your own number? It all comes down to cost and timeline. If you’re a bigger organization and can afford the $15k per year for the short code, it’s worth it.
All organizations should start with a shared short code. Even if you are getting your own short code, I recommend starting early with the shared short code during the three month setup period. It’s always best to get going with the promotional aspects especially on this new channel where it’s going to take a little time to understand how to promote SMS and generate optins.
How do I pick a vendor?
There are a lot of SMS vendors out there. If you are going to build the technology yourself or integrate into an existing system that you’ve built - like uber would, then just start with Twilio. They are by far the most reliable, fastest and most flexible way to start if you’re looking for an API. It’s possible that you might have special needs and go to a different aggregator, but Twilio is far ahead of the game, basically everywhere I can think of.
More people will have questions about how to choose an ASP, and this is tougher. Like choosing any system, it’s probably best to start by finding a vendor that focuses on the space. The biggest advantage to having a vendor that works in the space is integrations with the other systems that work in the space. Just like email and the website really need to work together, SMS is in the same mix. It needs to work with other systems especially scheduling and CRM.
Any ASP vendor should be able to answer tough questions about short codes and know some of the terms that we’ve used on previous podcast episodes. It’s not that hard to build a platform that sends a text message. The harder part is knowing how to run mobile campaigns effectively.
On that note, I think that vendors that provide strong account management or customer success services are essential. Text messaging is a new channel. It’s different than email, different than web, apps etc. It’s really worth it to get experience and help along with the platform. The cheapest ASPs out there are going to start in the $30-50 range. They are going to be hard to set up, they won’t have a lot of features and the charges will increase with every addition - like adding a keyword will cost money. Or for a few hundred dollars a month you can find a system that’s solid, has a lot of features, and when you need to talk over a campaign, there is someone you can call.
How do I make money with messaging?
As far as I’ve seen, SMS needs to support a business model. SMS hasn’t been successful as the business model. If you’re an oil change business, messaging can help you make money, by reminding people to get their oil changed at the 3 month mark, upselling people etc. It’s not really possible to make money charging people to receive text messages or with sponsorship of messages.
I’ve recently noticed some attempts at trying to do this - so there is a monthly charge to get messages on a topic. It’s interesting and I hope someone figures it out. Generally in 2017, we think about media being free - music, TV, newspaper articles etc. Messaging would be hard to share and not worth it. I think this will get figured out.
Sponsorship of SMS campaigns will be harder. I have worked with media companies doing SMS and the idea of “this text is brought to you by a sponsor” just never worked. Messaging is just not an eyeball business. If the sponsor is extremely integrated, there are options, but it doesn’t make sense to just append a sponsor name at the end of a message.
How much does a text cost?
I haven’t checked recently, but I believe that Twilio charges one penny per message. If you’re using an ASP the cost per text will probably be higher than that. Most ASPs will have a monthly fee that includes a certain amount of texts.
If the cost per month is low, the ASP may charge for every text and it could be sizable - that’s how they get you. As the monthly cost is more for the software, it will usually also include more messages. As requirements get really high - like into the millions of messages per month, the cost per message can come down under a penny, depending on the negotiating power.
Also, as you’re investigating price it’s important to understand if the vendor is charging for incoming messages, outgoing messages or both
Should we do messaging?
Yes, absolutely. Messaging works today and there’s a strong chance that messaging becomes a more dominant channel in the future. Launching messaging today is like launching email 15 years ago or social 10 years ago.
We’re going to talk a lot more about how to start, and some exciting stuff about Facebook Messenger. If you’re listening to this podcast, and aren’t already doing messaging - it’s something to get on the list for 2018.