/ WhatsApp

SMS vs WhatsApp

With the recent announcement of the WhatsApp for Business API, a valid question that comes up often is how it compares to Bulk SMS as a customer engagement channel. In this article, we'll take a look at both channels to see which comes out on top.

Background

Businesses already send billions of SMS daily in the form of Marketing Messages and Application to Person (A2P) messages. This industry has come to be known as Bulk SMS and it has proven to be one of the most effective forms of direct marketing. Businesses that have a customer list of phone numbers can send them periodic updates of offers and promotions that they are running. A2P messages are transactional messages generated after a customer activity, e.g. a transaction notification from your bank whenever you use your debit card.

Ever since Facebook acquired WhatsApp for $19 billion in 2014, businesses have been eyeing it as a new channel to use to engage their customers. WhatsApp is the largest online messaging network in the world with 1.5 billion users monthly from 180 countries. 1 billion of those users use the service daily sending over 60 billion messages everyday.

Why WhatsApp is better

WhatsApp messages can be viewed as SMS on steroids. They offer the same simplicity and direct reach with the following additional benefits:

More Text

SMS is currently limited to 160 characters in a single message. With WhatsApp you can send up-to 4096 characters in a single message.

Ensured deliverability

One of the challenges facing the Bulk SMS industry is ensuring deliverability. The race to the bottom in terms of pricing, and the complexity of dealing with different GSM networks around the world has led to unscrupulous providers who cannot guarantee that an intended recipient ever receives the message. With WhatsApp since they are the only intermediary, they can guarantee 100% delivery, as long as the user has internet access.

Rich Media Support

Unlike SMS, with WhatsApp it is possible to send not only text, but audio, images, video or even file attachments up-to 64MB. MMS (Multimedia Messaging Service) - an extension to standard SMS that allowed it sending of multimedia over the cellular network, has never been universally adopted by both handset manufacturers and mobile network operators.

End to End Encryption

WhatsApp employs end-to-end encryption to secure messages. This means that no third party (including WhatsApp & Faceboo) can see the content of messages because they are encrypted on the sending device and encrypted on the recipient. This makes this channel more secure.

Seamless two-way communication

Bulk SMS largely operates in a two-step fashion. Most outbound messages from a business usually bear a Sender ID (an alphanumeric identifier for a business). The Sender ID helps to build trust from the consumer end, however, you cannot reply directly to such a message. For example, if your bank sends you a notification of your card being used, you cannot reply to that message. The only way to do this is if they use a Short Code - a 5-6 digit number. This allows two way messaging but loses the trust benefits of a Sender ID.

WhatsApp eliminates this problem by using the same number for inbound and outbound messages. They have the additional benefit of verifying some businesses so consumers can trust that they are contacting the business they expected.

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Why SMS instead of WhatsApp

Here are a few reasons why you would consider sticking to SMS instead of WhatsApp.

Almost universal reach

Whereas WhatsApp has over 1.5 billion users, the number of mobile users who can receive SMS is 4.57 billion and continues to grow. Furthermore, WhatsApp is restricted to smartphone users, leaving a key demographic out. WhatsApp is also dependant on internet access. This means users in rural areas with low internet data penetration or where data is expensive may not find this an optimal option.

Higher opt-in requirements

Despite national data privacy restrictions, Bulk SMS has a low barrier of entry. It is possible to get customer contact lists and spam users, or extract customer information based on their transactions with you (e.g. if they pay via mobile money) and use that information to populate your contact database. With WhatsApp the users will have to explicitly opt-in (even if you already have opt-in secured elsewhere) and can block your contact without requiring intervention from a 3rd party.

Cost

The price of SMS continues to drop, and it's possible to get discounts when you purchase in bulk. The pricing shared by WhatsApp seems to be more expensive than SMS at this point.

Institutional Risk

WhatsApp is wholly owned by Facebook and is therefore subject to their terms and conditions as well as their shareholders. SMS is an open standard adopted by mobile network operators and its pricing is generally sensitive to market forces.

Conclusion

SMS will be here to stay for the foreseeable future. The fact that it is an open standard and not dictated by a single corporate entity means it'll always have a place in person to person or application to person communication. WhatsApp for Business API is a high fidelity experience for customer engagement and presents a great opportunity for brands who's target demographic this would appeal to.