SMS marketing- excruciatingly irritating

A couple of years back when tariffs for cell phones was falling off a cliff although not as much as 1 paise per second, we had irritating calls selling us credit cards, loans, insurance products and mutual funds. The matter was taken up in court and we had the ‘Do not disturb’ registration made mandatory by the apex court for all telecom service providers. Now this calling has been replaced by SMSes. The purpose? The same. Selling you everything (from every manner of business: insurance companies, realtors, bars and restaurants, neighbourhood grocers, stockbrokers, gyms, and schools) that can be sold under the sun, right from apparels costing a few hundred to houses running in crores. It is supposed to be not as irritating as calls. But does it make a difference to an end customer. For him, sitting in do-or-die meeting with a client, receiving a message selling you a watch which is 40 percent off is frustrating to say the least.

I am just wondering whether the concept of target market still exists. Because the nature of these messages targeting people who are nowhere close to the prospective candidate is alarming. Imagine a BPO employee receiving a message to buy property worth a couple of crores in central Mumbai would be blasphemous. However the reason put forth by media planners, if there is any planning done for this, is the cost attached to reach a sizeable amount of people.

When we compare other media vehicles, according to Lodestar UM, a media buying agency, the cost to reach 1,000 people via print is, on average, Rs180 for an ad sized 100 column cm. Via a 30-second television advertisement, reaching 1,000 people costs Rs25. whereas to reach a 1000 people via these SMSes is roughly Rs. 30. The average response rate to these SMSes is roughly 1%, and even less for realtors—low, but acceptable for such inexpensive advertising, and higher than an Internet banner ad’s average of 0.5% for click-throughs.

There are not many companies who specialize in this. The sheer ease of sending these messages and a per-SMS price that has plummeted in near-suicidal manner over the last two years, have combined to yank this industry into overdrive.

The largest sender of such SMSes is ValueFirst Messaging Pvt. Ltd, and its chief executive officer estimates that 150 million marketing messages—of both spam and non-spam variety- is sent every day in India. Around 30% of these are promotional SMSes. The remaining would then be service messages—SMSes that the receiver has opted to get, such as bank account activity alerts.

Nowadays, the margins are very thin which will soon result in consolidation. From an SMS costing Rs1.50; the margin, per SMS, is now often a solitary paisa, and sometimes less. Economies of scale are the reason for survival of some of these companies like ValueFirst Messaging.

As this marketing becomes old, the regulators will come into focus and a do not disturb registry would soon spring up here. And people are not going to buy a home or take a loan for a car or buy a mutual fund based on an SMS. It isn’t impulsive buying. Although it’s just an informative medium, it would do more harm than gain.