Mobile operators on track to make $52.2bn from RCS by 2028

Mobile operators on track to make $52.2bn from RCS by 2028

19 November 2020 | Natalie Bannerman

Cover

Mobile operators are set to earn more than $52.2 billion from RCS by 2028, according to the findings of a report by business messaging intelligence company, Mobilesquared.

The report entitled, RCS: The game changer the industry has been waiting for, published by Mobilesquared in association with Out There Media, highlights the poor return on investment achieved by ineffective digital banner advertising to mobile operator-led RCS campaigns.

According to figures, for every $1 million invested, just 0.1%, or $1,000 creates value for brands resulting in $999,000 being wasted. However, If brands fail to divert budget to more impactful digital platforms like RCS, they stand to waste approximately $70.7 billion on digital banner advertising in 2020 and a further $917.2 billion by 2028.

“Brands are waking up to the chronic waste that surrounds the average digital advertising campaign. Consumers are growing increasingly tired of Facebook, Google and other digital platforms due to concerns over data privacy, and inaction regarding hate speech, ad fraud and disinformation,” said Kerstin Trikalitis, CEO and Co-Founder, Out There Media.

“This is being reflected by the poor levels of brand engagement and ROI their platforms offer brands. The digital advertising world is desperate for a compelling alternative to the Facebook and Google duopoly. RCS is it; it is the alternative for brands that are no longer willing to spend millions on digital advertising and see poor returns.”

This creates an opportunity for mobile operators to increase revenue from digital advertising as RCS gives brands a new channel of engagement which combines messaging, the richness of an app and the same levels of interaction offered by existing messaging apps such as WhatsApp.

There is expected to be 700 million RCS users by the end of 2020, before increasing to five billion over the next eight years to reach 61% of total smartphone users ‘this will make RCS the single biggest medium in the world,’ states the report.

“We start seeing brands diverting media spend to RCS this year and this will increase dramatically in 2021 and beyond. This is great news for mobile operators who are pivotal in the delivery of successful RCS campaigns for brands—they have the reach, the scale, and first-party deterministic data to really ensure maximum ROI from campaigns,” added Trikalitis.

“As operators view to monetise their 5G investments and race to create new streams of revenue amidst a backdrop of flattening ARPU and increasingly squeezed bottom lines, ensuring they are able to benefit from this migration in digital spend could be key to their future success.”

Further by 2022, RCS will generate $1.5 billion as a result of the evolution of brand spend from SMS to RCS. In turn by 2024, RCS revenue will increase to $11 billion as brands also adopt the channel for P2A customer care, starting to supplement, and eventually replace, call centre voice solutions with RCS chat bots. Overall, RCS revenue for mobile operators will reach $52.5 billion by 2028.

“RCS is a really exciting opportunity for consumers, brands, agencies and mobile operators. Brands can no longer waste vast swathes of their digital budget on ineffective channels,” added Nick Lane, chief insight analyst, Mobilesquared.  

“And mobile operators need to deliver a rich messaging experience to their subscribers and remain a central in the messaging landscape, otherwise they face the risk of losing this massive opportunity to the likes of WhatsApp and other challenger messaging apps.”