One of the predictors of the future success of mobile marketing and advertising is the adoption rate of the mobile messaging platforms through which advertisements may be delivered. The diffusion, adoption and use of SMS (Short Message Service), MMS (Multimedia Messaging Service) and Wireless Data plans (as measured by annual wireless data revenues) is an indicator of the future potential of mobile marketing success.
Using data gathered from a variety of CTIA sources, the following growth charts are presented for the period 2005-2009: U.S. Annual SMS Messages, U.S. Annual MMS Messages and U.S. Annual Wireless Data Revenues. All three graphs indicate positive continuous growth for the period examined.
SMS use is expanding at a compound annual growth rate (CAGR) of 109.5 percent. At year end 2005, 81 billion SMS messages were sent in the U.S. market. This grew to 1.56 trillion by the end of 2009. Use of SMS was once was considered to be an accurate predictor of age (young versus mature). No longer is this assumption true: SMS adoption has bridged the generational gap. Based on its broad-based acceptance and use, SMS provides solid prospects for those considering mobile marketing and advertising.
In the period examined, MMS use in the U.S. experienced a CAGR of 117.02 percent, the largest growth of the three variables examined. The increase in MMS use is most likely correlated with the increase in wireless data plan use and the proliferation of smartphones. At the end of 2005, 1.1 billion MMS messages were sent in the U.S, compared to 24.4 billion by the end of 2009. MMS provides the most exciting prospect for mobile advertising, especially in the delivery of short video ads to targeted mobile users.
To make mobile marketing and advertising acceptable, especially in the U.S. where customers pay for incoming and outgoing SMS and MMS messages, requires growth in the adoption of unlimited wireless data plans. As we transition from 3G to 4G access, mobile providers are beginning to examine the amount of data that individuals use with an eye towards charging heavy users of data more in an effort to keep bandwidth available for the masses. While this move may seem logical to the providers, it may inhibit the long-term growth of mobile marketing and advertising. U.S. wireless data revenues grew at a CAGR of 48.21 percent for the 2005-2009 period, starting at $8.6 billion and ending at $41.5 billion.
Clearly the diffusion and adoption of SMS, MMS and wireless data access bodes well for the mobile marketing and advertising industry. The acceptance and use of SMS and MMS by consumers of all ages provides a platform on which to build campaigns that are targeted, focused and customized. Consumers are positively predisposed to receiving information via SMS and MMS. The only remaining barriers, from a behavioral perspective, are the diffusion of unlimited wireless data plans and smartphones. Paying individually for incoming and outgoing SMS and MMS messages turns off consumers. Once reasonably priced unlimited data plans become the norm, instead of the exception, mobile marketing and advertising is destined to grow exponentially.