The U.S. SMS marketing market was valued at USD 4.95 billion in 2020 and is projected to expand at a CAGR of 20.2% during the forecast period, 2021 – 2028. The growth of the market is attributed to the rising penetration of SMS marketing across several industries to draw the attention of consumers regarding products and services available.
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The SMS marketing is a type of marketing method for promoting products and sharing information about certain service benefits using text messages (SMS) to consumers. These messages are meant to attract the attention of consumers regarding product offers and other benefits. A wide range of business enterprises use this SMS marketing method as it ensure high engagement rates to the information as compared to other modes such as email. The SMS marketing offers services that reduces the paperwork and its costs as well as allows to easily connect with the target customers.
Rising use of smartphones and low cost SMS service from telecom companies pave a quick and convenient way to engage with consumers. As per a report, over 81% of the total adult population in the U.S. use smartphone in 2019. To understand the efficiency of a phone marketing method, the click through rate (CTR) is an effective way to measure the performance. SMS (short message service) holds a better CTR or engaging rate as compared to any other marketing tools, says the report by Burst SMS, one of the global online messaging platform suppliers. Text messages also comprise of some other benefits such as less customer complaints and higher open rate as people generally reach to their smartphones to open an instant message.
Market Trends, Drivers, Restraints, and Opportunities
- Increasing number of smartphone users and rising preference for short message as compared to email is expected to fuel the market growth of the country.
- Rapid growth of the e-commerce, rising online shopping, and wide adoption of the SMS method for transactional purposes with consumers are estimated to boost the market in the coming years.
- Introduction to artificial intelligence (AI) enabled SMS marketing tools, which improves the text messaging services and consumer interaction is offering a key aspect for the market growth.
- Growing adoption of SMS marketing to create personalized promotional messages to influence the targeted consumers is projected to expand the market during the analysis period.
- Limited length of text message up to 160 characters in a single text as per the U.S. regulations is a major restraining factor that may hamper the market growth.
- Several enterprises are largely concentrating on developing systems to ease customer relationship and offering special discounts are presenting numerous opportunities for the expansion of market.
U.S. SMS Marketing Market Segment Insights
Large enterprises segment is anticipated to dominate the market
Based on enterprises sizes, the market is bifurcated into large enterprises and SMEs. The large enterprises segment held a dominated market share in 2020 and is projected to represent a high CAGR in the coming years owing to the wide use of SMS marketing from big organizations. Rising investment from large enterprises to improve their products advertising through SMS and provide easy interactive interface with the support of smartphones are key factors driving the segment growth.
Retail segment is anticipated to account for a large revenue share
Based on end-users, the U.S. SMS marketing market is divided into automotive, healthcare, IT & telecom, media & entertainment, retail, and travel. The retail segment is anticipated to account for a large revenue share of the market during the forecast period owing to the increasing number of e-commerce retailers which are using test messages to update their customers about their upcoming events, launch of new products, latest offers, and other brand activities. In the retail industry, the application of location-based services is growing rapidly to provide a well-established customers’ shopping experience by offering them promotional SMS regarding attractive offers based on their existing location.
Competitive Landscape
Some major players competing in the U.S. SMS marketing market include IBM Corporation; Amobee, Inc.; Infobip Ltd.; Chartboost; InMobi, Marketo; Slick Innovations, LLC; and EZ Texting. These players are actively adopting several business strategies such as mergers, acquisitions, partnerships, and others aiming to improve their product offerings and to grow their market share. The rapid development of services and several inventions of the products along with optimized costs are expected to increase the market.
For instance, in November 2018, Infobip Ltd announced its strategic partnership with Teckst intending to simplify the application of two-way messaging for both companies. Additionally, TextMagic Ltd. announced to provide its customers an SMS API, which integrates text messaging along with the customer’s current business software or application. This helps the customers to send text messages without accessing the portal of seller.
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