Supercharged SMS

Rob Malcolm, VP of online sales and marketing at CLX, considers whether the rich content that RCS can deliver to consumers’ phones is enough to make brands think twice about the need to develop more apps.

Rob Malcolm CLXJust before Mobile World Congress this year, Google announced that more than 40 carriers and device manufacturers now use its RCS platform (up from 27 this time last year).

It also used the event to talk up some of its early applications. In the US, household names including and Subway are already sending RCS messages to Sprint customers, while in the UK, Barclays, Hermes, British Gas, Pizza Hut Delivery and Foxtons are using RCS on Vodafone.

What is RCS? Imagine you’re on the way to the airport. Your phone pings. You have a message from your airline. Inside the message is your boarding pass with name, barcode, departure time, map to the departure gate and seat number. You don’t fancy a window seat, but it’s OK, you can click the ‘change seat’ button.

Seems like you’re all sorted. But you still have questions. Fine, just start a text conversation with the airline agent (or maybe a chatbot) and ask away. After all, this is a message.

Well, yes, it is a message. Really, though, this experience has delivered all the information, utility and convenience that typically requires a native app. But with none of the expense required for the brand to develop one. And none of the faff demanded of the customer to download one.

This is why many believe a new kind of rich media message format could be the long-term replacement for the app. In fact, such a format is already here. It’s called RCS.

Rich content
The Rich Communication Services (RCS) Universal Profile 2.0 standard delivers messages that contain rich content features such as images, videos and reply buttons that can link to further menus and functions.

It is essentially SMS 2.0. Now, the world’s operators, in partnership with Google, are building out the infrastructure to put RCS on every phone in the world. They are making progress. Late last year, the operator body GSMA confirmed that 50 mobile operators have already launched RCS and that it currently has 138m monthly active users worldwide.

At the time of writing, RCS is available on Android devices only since Apple has yet to sign up. But long-term, it’s possible that many hundreds of millions of people will use RCS as their default messaging service. Indeed, the GSMA projects over a billion monthly active users by 2019. That would be equivalent to the three most popular person-to-person messaging apps used globally (Whatsapp, Facebook Messenger and WeChat).

Of course, many readers will be wondering if there’s a need to replace apps. After all, studies suggest the market for apps has never been healthier. This is true – to a point. Analyst Sensor Tower reported that all-time global app downloads hit 23.4bn in Q3 2017 – up 14 per cent year on year. However, it also revealed that Facebook’s four primary apps – Facebook, WhatsApp, Messenger, and Instagram – captured 582m downloads in the quarter. That’s almost half.

Development costs
The take-away is obvious. Consumers love apps, but most use just a dozen or so. They simply don’t have the headspace or the phone memory for more. Indeed, research by ComScore in 2017 showed 49 per cent of US smartphone users download zero apps in a typical month.

This is alarming for enterprises, especially given the budget required to build an app. Experts say development costs for eCommerce/transactional apps start at $200,000 (£145,000) and can reach $1m. Brands know this. They’ve been casting around for an alternative to apps for a while.

They’ve looked into HTML5 mobile sites, which offer many app-like features inside a mobile web experience. However, web apps can cost tens of thousands of dollars – and they still demand that a user fires up a browser and (in some cases) saves the page to his or her mobile homescreen.

Rich messaging seems far more viable given that handsets would ship with this functionality setup by default. Enterprises can log into a dashboard that lets them easily send messages to an opted-in database of users from a cloud-based system. The cost of these messages is still to be decided, but many analysts predict that the cost will be comparable to SMS today and possibly cheaper per message for lengthy two-way conversations.

And self-evidently, any campaign that uses messaging will be interactive. RCS includes read receipts so marketers can perform A/B testing, gauge the success of campaigns and make changes on the fly to improve responses.

Perhaps the most compelling aspect of the ‘messaging-as-a-platform’ idea is that most brands are already engaging in this kind of activity, but with SMS. They are using text to send delivery alerts, PIN codes etc. According to analyst Ovum, businesses sent 1.16 trillion so-called A2P (application-to-person) text messages in 2016 and will send 1.28 trillion by 2019.

So migrating A2P from plain text to rich RCS makes perfect sense. Needless to say, the industry is now working hard to encourage enterprises to experiment. In February 2017, Google launched an Early Access Program with selected partners to let brands try what it calls Rich Business Messaging.

The elephant in the room is how Enterprises can deliver seamless app-like communications when not every person has an RCS-enabled device.  (Some might point to the current lack of support from Apple as another – Ed). To make this experimentation easier, brands can now use ‘SMS fall-back’. This guarantees the message will always arrive (as plain text with a link) if an RCS client is not present on the device.

The aforementioned Ovum research suggests enterprises are intrigued. It found that 36 per cent are planning to adopt RCS for enterprise messaging. 89 per cent are interested in using RCS to have chatbot-based conversations with customers. And 61 per cent said RCS support for payment platforms was a significant draw.

For some time now, OTT messaging apps have been on a steep growth curve. Consumers love them because they deliver a rich experience and can include functions like sending money to friends. Enterprises can see all sorts of benefits, but as yet have struggled to add that functionality to their own communication efforts. Now RCS promises to open the market up and force them to ask the question – why devote so much budget to apps when RCS can improve engagement for a fraction of the cost?