Factors that Significantly Influence the Cost of SMS Marketing
In the digital age, SMS marketing has become a powerful tool for businesses to engage with their customers. However, managing the costs associated with these campaigns is crucial for a successful marketing strategy. Here are some key factors that influence the cost of SMS marketing:
Carrier Costs
Fees paid directly to mobile network operators per SMS segment vary by carrier agreements and country. These costs can significantly impact the total spend on an SMS marketing campaign.
Message Length and Encoding
Standard SMS has a 160-character GSM-7 limit. Exceeding this limit splits messages into multiple billable segments, increasing costs. Using Unicode or emojis lowers the character limit per segment and raises costs.
Pricing Models
Costs depend on whether you pay per message, subscribe monthly for preset volumes, or commit to annual usage, with discounts available for higher volumes.
Aggregation Mark-ups
SMS aggregators add fees on top of carrier costs.
Compliance and Registration Fees
Regulatory costs such as brand registration (e.g., US 10DLC) add to expenses.
Routing Quality
Using direct routes lowers costs and avoids resending caused by unreliable "grey route" messaging, which can inflate expenses due to delivery failures.
Geographical Reach
International SMS costs vary, often 2-3 times higher than domestic messages due to differing carrier fees and regulations.
Message Content Complexity
While SMS is text-based, richer messaging types that include multimedia or interactive features incur higher fees due to increased data usage and backend processing.
Maintenance Costs
Operator fees related to uptime guarantees and service levels (e.g., for OTP messages) also factor in.
Fraud and Bot Traffic
Artificial traffic increases usage and costs if not controlled.
Optimization Practices
Shortening messages and URLs, improving recipient list hygiene, and targeting reduce wasted sendings and keep costs down.
When evaluating SMS marketing platforms, it's important to consider hidden charges, minimum fees, or required subscriptions. Toll-free numbers may lack the same delivery speed as other types of numbers. A standard SMS includes 160 characters. Longer messages may be split into multiple segments, each of which counts as a separate message.
Short codes are faster and more reliable but cost more upfront. Each platform has its own pricing structure for SMS services, with some charging by message, others by contact count, or based on advanced features. Simpler formats are often sufficient for one-way notifications or flash sales.
The cost of SMS marketing is not solely based on the number of messages sent. The type of number used (shared extended code, dedicated long code, toll-free number, or short code) affects the cost of SMS marketing. Two-way texting increases message volume. Choosing the correct type of number is about balancing the budget with the performance expected.
Managing carrier relationships and message design efficiently is critical to controlling expenses. Reviewing your SMS marketing provider's rate sheet is advisable when targeting a global audience. Deciding which interactions are truly necessary can help manage costs. A platform that offers value without charging for every extra feature can make a significant difference in cost management. Frequency of message sending impacts total spend, with more messages leading to higher costs but also increased visibility. However, sending messages too often may lead to audience unsubscription, while sending too few may hurt engagement.
[1] "SMS Marketing: Costs and How to Optimize" (Source) [3] "International SMS Pricing: A Comprehensive Guide" (Source) [5] "Rich Communication Services (RCS): The Future of Mobile Messaging" (Source)
- The type of number used for SMS marketing, such as shared extended code, dedicated long code, toll-free number, or short code, can significantly impact the cost of SMS marketing.
- To manage expenses effectively, businesses should review their SMS marketing provider's rate sheet when targeting a global audience, as carrier costs and regulations vary internationally.
