Dec 29 2008
Be Grateful for Our Industry’s Transparency
As 2008 comes to a close, I’ve done some thinking on the myriad of issues facing the mobile channel compared to email, at least here in the USA: largely sub-par devices are tied to a single carrier, carrier networks operate independently from one another, consumers are locked into year(s)-long contracts and are penalized for terminating them early, all of the carriers seem largely the same, and no one can clearly explain the myriad of charges that appear on your everyday phone bill.
The New York Times recently ran a particularly damning piece on this last point, entitled What Carriers Aren’t Eager to Tell You About Texting, and it is well worth looking at. The article poses a number of pointed questions (arising from a simple inquiry from Wisconsin Sen. Herb Kohl) that none of the mobile carriers seem eager to answer. The main issue at hand: why does text messaging cost so much?
Think about it. Your marketing emails are what, 15-45KB in size? Standard text messages are only 160 characters in length (less than 1KB). How much does each ISP charge you to send an email to a recipient at their domain? Zero. How much does it cost your customers to open your email marketing campaigns? Zero. How much does it cost them to open your mobile SMS campaigns? 2-25 cents, usually.
Why does texting cost so much? Is there some hidden but necessary cost in SMS that the general public is simply unaware of? Is a rise in texting costs due to increased volume?
Professor Keshav said that once a carrier invests in the centralized storage equipment — storing a terabyte now costs only $100 and is dropping — and the staff to maintain it, its costs are basically covered. “Operating costs are relatively insensitive to volume,” he said. “It doesn’t cost the carrier much more to transmit a hundred million messages than a million.”
UNTIL Mr. Kohl began his inquiries, the public had no reason to think of the text-messaging business as anything but an ordinary one, whose operational costs rose in tandem with message volume. The carriers had no reason to correct such an impression.
Every now and again a news story like this pops up that makes me realize how lucky our industry is. There is a certain degree of openness, commonality, and democratic fairness that pervades the Internet unlike any other media. There is no single person, business, or government secretly pulling the levers of the Internet behind a dark curtain, and as former Sen. Ted Stevens once taught us, it’s also ”not a big truck.” (“It’s a series of tubes!”) As email marketers, these tubes help us reach more people, keep costs down, and give more control to the end user.
If we can keep consumer costs down, then perhaps mobile marketing can reach it’s full potential, working in perfect syncopation with integrated email, print, and mass-media marketing campaigns. But in order to do that, someone is first going to have to pull back the curtain and explain a few things to the public.
…And if you want to get a taste of what else lies behind the curtain of mobile carriers, I highly recommend another older article from The Times, Are U.S. Cellphone Carriers Calcified? It is an absolute revelation, providing some hope for the future while also confirming some of your worst fears about the mobile industry:
As longtime Pogue’s Posts readers know, my biggest cellular pet peeve is the endless recording you hear when you reach someone’s voicemail: “To page this person, press 2 now. You may leave a message at the tone. When you finish recording, you may hang up. Or press 5 for more options”—and so on.
At the conference, I asked one cellular executive if that message is deliberately recorded slowly and with as many words as possible, to eat up your airtime and make more ARPU for the cell carrier. I was half kidding—but he wasn’t fooling around in his reply: “Yes.”
The horror!
