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$4 of $5 spent on CPaaS messages ‘is one-way only’

Nick Lane Mobilesquared.jpg

Four dollars of every $5 spent on messaging linked to communications platforms is not designed to generate responses.

A new report today from Mobilesquared, a business messaging intelligence research company, says that 80.1% of money spent on communications platform as a service (CPaaS) is one way only – not designed to allow responses.

“CPaaS is not the engagement platform everyone believes it to be … yet,” said Nick Lane (pictured), chief insight analyst at Mobilesquared, and author of the report.

“Right now $1 in every $5 spent on CPaaS by a brand in 2022 had the potential of generating engagement activity with the consumer,” he said.

But he pointed out that $4 in every $5 is spent on non-interactive, one-way channels.

These one-way channels are SMS, MMS, email, in-app push notifications and video, says the report, that will not drive interaction with the consumer.

Just 19.9% of CPaaS spend was on two-way engagement channels, says Mobilesquared, including voice, social media, rich messaging channels and WebRTC.

These create “a potential engagement opportunity with the consumer”.

However, Mobilesquared has some good news for CPaaS companies. The proportion of money spent on two-way channels will be 31.2% of total spend by 2026, says Lane’s report.

“But this shows that brands are playing safe and spending the mainstay of their CPaaS budget on reliable and robust one-way channels, like email, SMS and in-app notifications, that will not generate a truly interactive experience with the consumer,” he added.

In reality brands’ existing CPaaS investment strategy will generate, on average, only one engagement opportunity with a consumer per day in 2022. This will increase to twice a day in 2023, and will be 3.6 times a day by 2026.

“It’s all relative, and the more a brand invests in their CPaaS strategy in engagement channels, the more engagement they will potentially drive with the consumer,” Lane added.

“There has been so much hype associated with CPaaS in recent years, that we think expectations need to be revised in the short- to medium-term as brands’ evolution to truly engaging strategies will be a slower-than-expected process,” he said.

“On average, brands spent 20% of their CPaaS on engagement channels, and this will only increase to 30% by 2026. CPaaS remains hugely under-utilised by brands.”