U.S. SMS Marketing Market Size, Share & Trends Analysis Report By Enterprise Size (SMEs, Large Enterprises), By End Use (Retail, Travel, Automotive, Healthcare, IT & Telecom, Media & Entertainment), And Segment Forecasts, 2019 - 2025

Report Overview

The U.S. SMS marketing market size to be valued at USD 12.6 billion by 2025 and is expected to grow at a compound annual growth rate (CAGR) of 20.3% during the forecast period. SMS marketing helps organizations eliminate paper costs and denote a fast and convenient means to interact with target customers. Thus, increasing the penetration of SMS marketing across all industries is anticipated to drive the growth over the forecast period. Additionally, the advent of AI-enabled SMS marketing tools that enhance text messaging services is expected to positively influence the growth in the near future.

Click Through Rate (CTR) is an effective performance metric used to understand the effectiveness of a marketing campaign. It helps organizations to gauge the success of a campaign by measuring the number of times a particular advertisement is viewed. According to a report published by Burst SMS, a global online messaging platform provider, SMS has a better average CTR in comparison to any other leading marketing tool. Additionally, text messages also fall better in other parameters such as higher open rate and a lesser number of customer complaints. These benefits, coupled with the better CTR are anticipated to drive the demand for text message marketing over the next six years.

The market is expected to experience considerable growth owing to proliferation of smartphones and increased internet penetration in the country. According to statistics published by the Internet Innovation Alliance, the total number of smartphones in the U.S. in 2016 was 208.2 million and is expected to increase to 270.7 million by 2021. Similarly, as per U.S. Pew Research Center, as of February 2019, 96% of adults in the U.S. own a cell phone, and 81% of them own a smartphone. Studies suggest that text messages have a higher open rate because people always carry their smartphones and tend to open a message as soon as it is received.

In addition to a high open rate, text messages offer numerous benefits to the marketers such as affordability, no dependency on the internet, and immediate results through 2-way messages. Additionally, text message allows personalizing promotional offers as per target customers. Marketers can include the name of the customer in the beginning or provide offers on particular products that are frequently purchased by a customer. Personalization of marketing content increases the chances of converting a potential customer into an actual customer.

The demand for SMS marketing is also anticipated to gain momentum owing to introduction of AI for analyzing and using customer data to create personalized promotional messages. AI is used for content creation, optimizing content delivery, improving customer engagement, and reducing response time and expenditure. Although AI-enabled tools are not used extensively as of now, certain companies do have AI support for their applications. For instance, Watson Marketing tool by IBM Corporation uses an AI-powered content management system to enhance communication experience of its customers.

One of the prominent factors inhibiting the market growth is the limitation on the number of characters that can be sent in a single text message. According to the U.S. messaging regulation, the standard length for all text messages is 160 characters. Thus, creating content with limited characters while making a strong impact on the viewers can be a challenging task for SMS marketers. In addition to character limitation, dependency on a service provider to receive text messages is another challenge hampering market growth.

U.S. SMS Marketing Market Trends

Text messaging has many advantages, including fast results via two-way communications, without internet dependency, and low cost for advertising campaigns. Enterprises employ personalized promotional offers in text messages to attract targeted customers. This form of personalized marketing technique aids in the conversion of a prospective consumer into a paying customer. Furthermore, AI-based SMS marketing technologies are helping to increase consumer interaction, optimize content delivery, and a reduce response time. All these factors are expected to supplement the market growth.

However, the market growth is restricted mostly by the lack of available messaging space for sending messages. Since the available length is restricted to 160 characters, the SMS must be brief, concise, and exact. When long messages exceed the character limit, it is broken up into multiple smaller pieces. This has a lesser impact on the customer because it becomes irritating rather than appealing to them.

Market growth is also aided by organizations that maintain track of the health sector and provide services for drug producers to reach out to healthcare practitioners and doctors. Thus the rising healthcare and pharmaceutical sector is anticipated to offer lucrative opportunities for this market. Over the forecast period, market growth is likely to be driven by expansion in the e-commerce industry, availability of low-cost smartphones, and increasing internet penetration, mobile payments, and mobile banking adoption.

End-use Insights

Based on end-use, the market is segmented into retail, media and entertainment, travel, automotive, healthcare, IT and telecom, BFSI, and others. In 2018, the retail segment captured more than 23% revenue share of the market. The high value share of the segment is attributed to rising number of e-commerce retailers that use text messages to inform customers about new offers, upcoming events, order details and status, and the launch of new products. Additionally, increasing implementation of location-based services in the retail industry to deliver an enhanced consumer shopping experience by providing them promotional SMS of offers based on their current location is also expected to positively impact the CAGR over the forecast period.

The media and entertainment segment is anticipated to exhibit a CAGR of 22% from 2019 to 2025. The use of messaging for the promotion of movies, TV shows, events, and others is a primary reason contributing to the growth of the segment. Additionally, growing popularity of two-way messages for SMS voting and SMS polls is also driving the segment. Furthermore, rising adoption of in-app marketing in banks to provide tailored products and service-related content directly to consumers’ mobile devices is expected to boost the growth of the BFSI segment over the forecast period.

Enterprise Size Insights

Based on enterprise size, the U.S. SMS marketing market has been segmented into Small and Medium Enterprises (SMEs) and large enterprises. The SMEs segment is expected to witness a CAGR exceeding 23% as small enterprises are increasingly adopting text messages for promotion owing to cost-effectiveness. The large enterprises segment accounted for the largest share in the market in 2018. The substantial share is attributed to the fact that large companies are increasingly investing in SMS marketing campaigns owing to their benefit of reaching a large audience instantaneously.

Another factor contributing to the high value share of the segment is the use of SMSs in increasing customer engagement. Large brands are increasingly using SMS marketing strategies to keep their customers informed about offers, updates, and other brand activities. Subway, for instance, began its SMS campaign in 2015 and reached over 5 million subscribers by 2018. The effective results of text message promotions are encouraging more and more companies to adopt SMS marketing, which is expected to drive segment growth over the next six years.

While the large enterprises segment accounted for the dominant share of the market in 2018, the SMEs segment is expected to register the highest CAGR over the forecast period. SMEs have also started to invest in SMS marketing activities owing to their affordable yet effective nature. Moreover, SMS prove to be an effective tool for the customer service department to get customer feedback and reviews, which helps improve customer satisfaction. Thus, the affordability and effectiveness of SMS marketing are anticipated to drive the growth of the SMEs segment over the forecast period.

Key Companies & Market Share Insights

Key participants operating in the market include Infobip Ltd.; InMobi, Marketo; Amobee, Inc.; Chartboost; Slick Innovations, LLC; EZ Texting; and IBM Corporation. Rising number of domestic players in the country has led to an increased threat to the leading players. However, key players are adopting mergers, acquisitions, and strategic partnerships with an aim to increase their market share and enhance product offerings. For instance, in November 2018, Infobip Ltd. announced a partnership with Teckst in order to simplify the implementation of two-way messaging for enterprises.

Recent Developments

• In February 2021, SimplyCast a leading provider of interactive and multi-channel communication software for organizations announced the partnership with RANS. SimplyCast and RANS have partnered to provide a technological solution that will minimize restaurant staff workload while also increasing consistency in communication across the enterprises

• In March 2021, Avochato has announced the availability of a HIPAA-compliant SMS messaging service. It adds further layers of protection, allowing healthcare organizations to communicate with patients via SMS while still adhering to HIPAA requirements

In March 2022, Infobip, a global cloud communications business, has enabled SMS and WhatsApp messaging for Adobe Commerce clients, allowing them to communicate with customers via their chosen channels at critical points in the purchasing process. The integration is part of Infobip's commitment to delivering valuable features to the market as an Adobe Exchange Partner Program Accelerate Partner

In order to sustain growing competition in the market, major players are offering innovative solutions to attract customers. For instance, TextMagic Ltd. offers customers an SMS API that integrates text messaging with the customer’s existing business application or software. This helps customers to send messages without accessing the vendor’s portal. Innovation in products and improvement in services coupled with optimized prices are anticipated to intensify the competition in the market.

U.S. SMS Marketing Market Report Scope

U.S. SMS Marketing Market Segmentation

The report forecasts revenue growth at country level and provides an analysis of the latest industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the U.S. SMS marketing market report based on enterprise size and end use:

• Enterprise Size Outlook (Revenue, USD Million, 2014 - 2025)

  • SMEs

  • Large Enterprises

• End-use Outlook (Revenue, USD Million, 2014 - 2025)

  • Retail

  • Media & Entertainment

  • Travel

  • Automotive

  • Healthcare

  • IT & Telecom

  • BFSI

  • Others