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Brands set to spend $18.04bn on RCS business messaging by 2023, says Mobilesquared

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A new study by Mobilesquared suggests that Rich Communications Service (RCS) – Google’s attempt to revamp text messaging – is set for exponential growth, driven by  brands and businesses changing the way they communicate with their mobile customers.

Despite slow initial uptake, the research into industry views towards RCS reveals that the messaging platform will gain significant momentum over the next few years as more mobile operators launch RCS, and more brands and businesses leverage its revenue-increasing potential.

The report forecasts a total of 1.01 billion RCS monthly active users (MAUs) across 168 mobile operators by the end of 2019, rising to 3.23 billion MAUs across and 486 mobile operators by the end of 2023.

Furthermore, while just 5.7% of brands and businesses said they would launch RCS business messaging (RBM) immediately, this number is set to increase to a majority of 65.8% three years after the launch of RBM – with content sharing, branded experiences and 1-2-1 chat being the main drivers.

In addition, Mobilesquared reveals the market opportunity with 57.5% of mobile users inclined to use RBM if the experience is at least as good as existing OTT channels such as Whatsapp, Facebook Messenger, WeChat or Line.

The firm disclosed that total spend by brands and businesses on RBM is forecast at just $184.14 million in 2019. However, this number is set to increase to $18.04 billion by 2023 as more brands and businesses utilise the platform and consumer adoption increases.

Mobilesquared’s report also provides insight into the global opportunities available for brands and businesses looking to utilise RBM, with Western Europe averaging spend of $1.37 per user per month in 2023 followed by Oceania ($1.11) and Eastern Europe ($0.63). Alternatively, the cheapest markets to target will be the Caribbean with an average spend of $0.25 per user per month, followed by North America ($0.26) and the Middle East ($0.27).

Commenting on the research, Mobilesquared chief data analyst, Gavin Patterson, says: “Although a number of questions remain about specific pricing models, the RCS business messaging platform has almost universally proven to show an increase in consumer opt-ins, click-through rates, satisfaction, engagement and conversion for brands and businesses.”

He continues: “This, coupled with the expected increase in messaging volumes due to the use of chat sessions which encourage a conversational flow between brand and customer, means that the entire ecosystem – from mobile operator to aggregator, brand and consumer – can benefit from RBM.”

Nick Lane chief insight analyst of Mobilesquared, adds: “Our research shows adoption and usage of RCS and rich business messaging will enjoy steady growth for the next couple of years, before accelerating from 2020. That growth will be driven by brands recognising that RCS will combine the effectiveness of SMS, with the functionality of WhatsApp, and the richness of an app.“

Lane continues: “There is still very little understanding around RCS within the industry despite the noticeable buzz around all of this year’s Mobile World Congress’ in Barcelona, Shanghai, and LA. With Subway reporting a 50-60% lift in conversion rate as a result of using RBM, and as other brands come forward to talk about their own successes, now is the time for brands to look to RCS to reap the rewards.”

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