SMS Marketing: What Affiliate Leaders Need to Know

As marketing channels blur and become more interconnected, Martech Record is creating a growing pool of content to help affiliate leaders understand and maximize synergy with other channels.

(Which SMS Marketing Platform are right for my brand?  Read our Martech Matrix to help guide you)

Over the past year, we’ve been asked to cover SMS marketing and how it complements affiliate initiatives. This post will give you a compact rundown of the space and why you should have this tactic on your radar as you work to fully integrate partnerships into your brand’s go-to-market plans. 

Key Takeaways:

• SMS is a highly effective and efficient channel, rivaling affiliate for many brands’ top spot in the ROAS ranking. That said, it faces the same questions about incrementality as does affiliate. 

• Messages come in two types: informational SMS, which provides customers with helpful updates on purchase confirmation, shipping status, etc., and promotional SMS, which offers customers messages on new items, special offers, exclusive discounts, and other popular merchandising tools. 

• Promotional SMS is most popular with larger brands, though that is changing as its efficiency becomes better known and tools to deliver programs become more affordable. Many brands are becoming more active with SMS marketing as email open and engagement rates have dropped significantly. 

• Affiliate and SMS marketing can be natural complements, and brands enormously benefit when these teams work together to coordinate programs. However, SMS has the same attribution challenges as affiliate when measured on last-click.

What is SMS Marketing?

SMS – short for short message service – is shorthand for text messages delivered to mobile phones and tablets. SMS marketing can be a potent weapon in the performance marketing arsenal. It empowers businesses to communicate directly with customers and prospects through engaging text messages. 

Typically, SMS campaigns are fielded to opted-in house subscriber lists. Brands use third-party platforms to field these messages, which charge a small fee per delivered text message.

What Types of SMS Messages Are There?

SMS marketing messages fall into two broad “camps”:

Informational/Transactional: SMS messages are a great way to deliver critical information to shoppers and customers. Informational SMS marketing keeps customers up-to-date and engaged throughout the shopping, buying, and fulfillment cycle. They offer value to the customer by providing timely updates, instructions, and other information. 

For example, informational SMS messages can alert users to a confirmed payment, shipping date, estimated arrival date, and tracking numbers. 

Promotional SMS Messages: Like emails, traditional ads, or affiliate text links and offers, promotional SMS messages can be tailored to almost any marketing objective. They can be mass-delivered or highly customized and can promote products, services, offers, or events.

Promotional SMS messages often contain enticing offers, exclusive discounts, limited-time promotions, or announcements about new products or services. They are valuable for driving awareness and immediate response by including short links. 

Promotional SMS messages often aim to create a sense of urgency, persuade recipients to take action immediately, and ultimately increase sales and customer engagement. 

What are the Rules and Best Practices About Customer Permission?

In the early days of SMS marketing, some brands chose to blast users with messages as soon as they acquired phone numbers, either through order forms or buying them from brokers. But phones are highly personal devices, and consumer backlash was enormous. At that time, many customers were also charged a fee for each text sent or received, fomenting additional anger.

In the US, the Telephone Consumer Protection Act (TCPA) requires marketers to receive express written consent before sending promotional messages to customers. That consent can come from filling out a form or texting a request to a shortcode. In EMEA, SMS is covered by GDPR and additional nation-specific regulations. Specific markets in Asia also have strict laws governing promotional SMS. 

How Large is the SMS Marketing Channel?

Juniper research estimates that 45.9B in retail sales are directly the result of SMS marketing. Data from Shopify for their customer base show that larger companies are far more likely to use SMS marketing than smaller brands. 

Real estate is the top industry for SMS marketing usage. Of the core affiliate segments, Travel, Entertainment, and B2B are the heaviest users of the core affiliate segments. Still, Retail is showing strong growth as merchants look to mitigate the business impact of declining email open rates. 

What are the Strengths and Weaknesses of SMS Marketing?

SMS brings a variety of benefits to marketers. First, the potential scale is enormous. Virtually any mobile phone can send and receive text messages, and there are almost 7B mobile phones worldwide. US mobile penetration is among the world’s highest, at 82%. 

Second, open rates for SMS are astronomical compared to email. While commercial email open rates often range near 20%, SMS marketing messages frequently fall in the 80-95% range. 

Third, SMS messages are also more likely to drive an immediate response. According to Broadvoice, the typical response time for SMS is within 90 seconds of sending versus 90+ minutes for emails. That makes SMS more relevant for time-sensitive initiatives like flash and one-day sales. It can also be an effective way to give preferred customers early access to limited opportunities and inventory. 

Finally, SMS messages delivered to house lists are highly economical. Like email, the cost to deliver them is tiny compared to the ROI they drive.

On the downside, SMS faces the same questions as affiliate on the measurement front. SMS companies are quick to take credit for sales as the last click in a marketing journey. Like search and traditional deal-oriented affiliate publishers, they tend to capture that last click. But most marketers are skeptical that SMS deserves credit for every sale it touches.

Second, SMS messages are text-only and must be short to drive desired response rates.  While some companies have experimented with “MMS” messages that can include imagery, they are far less common and consume customer data, which many find an unwelcome cost in a brand relationship. This makes SMS less valuable for brand enhancement. You can communicate 30% off far more easily than the essence of a luxury brand in a text.

Additionally, fewer people are likely to opt-in to receiving text messages versus emails, likely because of their high noticing value and immediacy. Nevertheless, as more and more companies offer rewards for SMS sign-up, many companies are building sizable databases. 

Existing customers are also far more likely to opt in to text marketing than new customer prospects. While data are sketchy here, younger audiences appear more likely to opt in than older customers.

Why Should Affiliate Marketers Care About SMS Marketing?

As with any channel, SMS marketing is a topic that affiliate leaders need to understand if they want to have their partnership programs fully integrated into their brands’ go-to-market programs. 

Promo snipe: Mike, I need more info on what resource you have created so we can promote it here and later in the post. 

It is an important and growing element of the mix that can complement and benefit from integration with affiliate. Here are some conclusions and implications to consider as you work to incorporate SMS marketing into your thinking:

1. A powerful marketing layer: SMS significantly enhances a brand’s presence on mobile devices and delivers messages that attract immediate attention and response. It creates incremental touchpoints that significantly impact brand decisions and conversion rates.

1. Many relevant marketing use cases: Besides informational uses such as purchase and shipping notifications, SMS messages can serve many promotional uses. They can make opted-in customers and prospects aware of new items and offers, mitigate cart abandonment, communicate time-sensitive offers, drive second site visits and repurchases, and almost any other purpose. While SMS marketing tends to be more relevant for retention than acquisition, that is slowly changing as brands increase efforts to acquire SMS marketing permission when customers first visit sites, just as they do email addresses. 

1. High engagement and noticing value: While email interaction rates have been in long-term decline, SMS enjoys several times higher open and engagement rates. Further, most recipients interested in an offer will respond immediately after receipt.

1. Partner, don’t compete: While theoretically, an SMS marketing program might compete with the affiliate channel for funding, the costs of SMS marketing to house lists are meager, so the threat is tiny. By contrast, the potential brand benefits of a synergistic affiliate and SMS program are immense. SMS is very effective for abandoned cart programs, so working closely with the SMS team will have substantial brand benefits. 

1. Explore SMS opportunities with publishers that offer them. SMS messages are affiliate tag and shortened URL friendly and might prove an effective tool to drive customer interest in special offers and items. 

1. SMS marketing has reporting and attribution challenges similar to affiliate. SMS captures a disproportionate share of conversions when given full credit for a sale under last-click. Savvy brands will apply more complex and accurate attribution to these conversions, just as they are moving towards in affiliate.

As two of the most effective and efficient vehicles for digital marketing, SMS and affiliate are natural complements. Both are outstanding at closing sales while providing influential touchpoints for brand discovery and favorable consideration throughout the buying funnel. Together, they can be a marketing powerhouse for brands. 

Which SMS Marketing Platform are right for my brand?  Read our Martech Matrix to help guide you