How Conversion Works

For over 10 years, we served some of the most prestigious brands in the world, and saw first hand all sorts of mobile marketing strategies, the good, the bad and the ugly of promoting a brand. By now, we know the Business Messaging industry pretty well. In fact, we even pioneered parts of it. So we can confidently say one thing..."conversion matters more than cost", and here is why.

Mobile marketers are often confused on what really matters and what is just hype. And for years, there has been a lot of hype around advertising on Instagram feeds or Facebook. While it seems like a great idea for brands, and it is, to a certain extent, for brand awareness, when it comes down to making (or saving) money with your ads, then it is another story.

Let's look at numbers.

The average Click-Through Rate (CTR) on Instagram is about 0.5%, and on Facebook, it varies between 0.47% to 1.65% depending on your industry with legal, retail, apparel and beauty being the strongest. But let’s say, for argument’s sake, that it is 1%.

The average Cost Per Mille (CPM) on both Instagram and Facebook is about $6, give or take.

What does it mean?

It means that if you spend $6 on Facebook to reach 1000 people, 1% of these people will click on your link to continue the engagement with your brand. So $6 buys you 10 people clicking on your link, in a nutshell.

On Instagram, with just 0.5% of these 1000 people clicking on your link, $6 only buys you 5 people clicking. You would then logically have to spend $12 to get the same 10 people clicking as in the Facebook example.

In short, 10 people = $12 on Instagram and $6 on Facebook

But now let’s look at the highest converter in the market. I am talking of course about MMS. That is where we separate the hype from the reality.

We sell MMS in Hong Kong for $0.10, and we see a Click-Through Rate (CTR) of 25% on average (with peaks to well over 30% when ads are impactful).

So, as above, in order to reach 10 people clicking, at a 25% CTR, you would need to send 40 MMS messages, which means spending $0.10x40=$4

This makes MMS cheaper than Facebook and half the price of Instagram in order to get the same 10 people to click.

That's where the perception of cost is deceptive. If we look at the cost per mille (CPM) for example. Let's say that MMS has a CPM (which it doesn’t), it would be considered huge ($100) in comparison to Instagram or Facebook ($6). However, because of its significantly higher CTR, the real cost to reach the same amount of people is actually much lower.

It is cheaper to reach 10 people with MMS than it is with Instagram or Facebook. That is a fact, demonstrated over and over.

Let’s try to with bigger numbers and see if it still works. Let’s try to get 1000 people to click on our link in our ad.

On Facebook, it would mean reaching 100000 people to get the 1% CTR = 1000. So 100000 means 100 x CPM, which means spending $6 x 100 = $600

On Instagram, it would mean double, so reaching 200000 people to get the 0.5% CTR = 1000. so 200000 means 200 x CPM, which means spending $6 x 200 = $1200

Using MMS, it would mean reaching only 4000 people at a CTR of 25% =1000, which means spending $0.10x4000 = $400

So if you spent the same money that you spend on Instagram on MMS instead, you would reach nearly 3 times more clicks for the same price.

Conversion matters more than cost

So the logical question becomes "how is that high level of conversion achieved by MMS?"

There are a few factors:

• Firstly, most phones would notify of a new message received (SMS or MMS). This leads to a high opening rate of more than 90% within minutes. That is half the battle of engagement, as people actually see your ad.
• The second factor is that MMS arrives in a folder on the phone (in the messaging app), as opposed to Social media, where your ad appears in a feed. It is hit and miss. If I see an ad that I like on Instagram, and leave my phone for a few minutes, then when I come back, the ad is gone because my feed refreshed.
• Also because of the message being saved, MMS allows you to drive footfall to retail stores or events by asking to show the message at the door in order to redeem an offer. This is impossible on Instagram or Facebook.

Get started!

If you want to find out more about how to use MMS for your brand, get in touch with us [email protected]

Pick our brain, get in touch, and let's see together how we can help you achieve better engagement and save money.