The Rise of Chat Apps is making SMS seem LOL
The interwebs are abuzz on news of a new tipping point, even if the implications are still a little fuzzy for marketers; web chat apps sent 19 billion msg’s per day in 2012, beating out long time Telco money tree SMS at 17.6 billion msgs daily. While I still prefer jumping on a call (not literally, that would be dangerous) for a conversation the younger generation has embraced talk to type, on average the 18-29 crowd in the US churns out 88 txt msgs a day and 17 phone calls. Keep in mind that even in the 65 and over group, daily texting still edges calling 4.7 to 3.8, and 32% of all respondents (in TIME Magazines Mobility Poll) said they would rather communicate by text than phone, even with people they know very well.
There’s plenty of sociological debate going on about what is driving the overall trend to talk and type (never having to say your sorry) and its implications (never having to say your sorry). Chat apps are popular because they are free to the end user unlike the SMS racket which enjoys a more than healthy margin In 2007, one suggested markup was 7,314 percent. In 2009, a markup of 4,900% was calculated. In 2010, in an article titled “America’s Biggest Ripoff,” the markup was believed to be around 6,500%. Global messaging revenue for Telcos was $200 Billion in 2011. Most damning of all is there is minimal opportunity cost to Telcos for providing SMS, which uses ”otherwise unused space in a control channel used for network maintenance.” This is not what is driving customers away, what they don’t know is hurting them; its the reality of shelling out $5/ month or $0.10-0.25 per text. Doubtless the popularity of Twitter, a free web based text message platform, has helped shine a light on the efficiency of web texting.
Facebook has targeted web messaging as an important part of its long term strategy to control the internet and keep Wall St happy with more mobile monetization. In previous months there have been some curious announcements from them, notably its ‘pay to message’ system which includes the ability for the low fee of $100 to send the CEO a direct message to his Facebook account. One wonders what the typical missive is about, beyond VC’s, job seekers and big game hunters.
Recently Facebook has introduced a more invasive version of its mobile app, called ‘Home’, and to lukewarm reviews; its the ever present message bubbles known as ‘chat heads’ which adorn your Android system that are the real focus of attention. When one of your pals pings you on FB a small round icon of their profile photo pops up on your home phone screen, just like the example above. Since Facebook assumes you will automatically love their new features the little ‘chat heads’ hang around until you manually removed them or opt out.
What are the implications for marketers with this trend towards the younger generation shifting to bespoke (hello London readers!) messaging applications? Typically email is the presumed default victim of the shift to real time digital communication however that’s a misplaced assumption as the chart above illustrates. One to one communication is considered a form of social media, be it IM, SMS or email; A study by The Atlantic refers to these interactions as ‘dark social’ and points out how significant this traffic is in driving social referrals on the web- in the case of Atlantics website over 60% of social referrals, as seen below:
So we are talking big numbers here either way you slice it; email is proven to be an evergreen marketing opportunity that delivers winning metrics. Chat apps are a different challenge in that they are closed off to third party contribution- nobody wants to see a 100×50 banner pushing diet cola when your talking in private about getting in beach shape for the summer. Somehow this is acceptable in email although its likely its ambient enough that we ignore its presence. Pehub.com has an interesting take on whats driving uptake in chat apps and no surprise Facebook is a prominent protagonist, something that does not bode well for its long term user engagement growth:
Josh Elman, a principal at Greylock Partners, has also taken note of changing user behavior, saying that seemingly “everyone between the ages of 14 and 20 who maybe didn’t have a smartphone does for the first time, and they’re communicating in very different ways than previous, older smartphone users have.”
While Elman believes that Facebook and Instagram “aren’t going away,” he observes that there’s “something about status updates and photos [on Facebook] that feels very much like you have to paint the very best picture of yourself. Instagram is the same; it’s not necessarily about what’s going on, but whether you can present a moment perfectly, with just the right filter and everyone looking their best. Kids worry: ‘Will my friends not like me or give me enough likes if this doesn’t come out right?’ So you’re going from these platforms that are public to more semiprivate and much more personal platforms that are enabling a different scale and where going back and forth feels more natural.”
And before you concur with the usual suspects that “this stuff is hard to monetize, will never last etc etc’ guess what, Taco Bell has already jumped in feet first with a promotion on snapchat via their twitter feed.
Taco Bell is one of the few brands that can risk trialing bleeding edge marketing opportunities like Snapchat; most of its store traffic does not remember what they ate the night before so if they are the victim of inappropriate tomfoolery on Snapchat well heck that’s totally kewl and funny LOL I heart loco tacos etc etc.. For now best to take a front row seat if your a B2C brand with a youthful following, chat apps are white hot right now so no need to get burned, let marketers with nothing to lose don the over gloves and put their (chat) head in the oven.
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