Many observers think communication service providers have got to create new revenue streams in partnership with business partners, rather than basing 100 percent of revenue on end users who pay for communication capabilities.
As always is the case for a developing business based on partnerships, partners will differ about the relative values they are bringing to the relationships, as well as relative revenue splits. Ad-supported text messaging campaigns are no different.
“For advertising-supported SMS, the net revenue per message is $0.004, and the carriers dispute this, but that’s the reality of the business,” says David Oberholzer, Limbo VP. “The model isn’t completely solid, and it’s unrealistic to think the CPMs (cost per thousand) we’ll be able to charge will go up dramatically, so it’s unrealistic for carriers trying to impose these types of per-message fees.
“Even relatively small carrier fees will drive out innovation to other platforms, and that’s already happening—look at all the advertising in iPhone apps,” he says. “If carriers raise costs, then that will be exacerbated.”
All of this will get worked out over time, but the issue illustrates the problem: a new and somewhat experimental new business requires nurturing and some degree of give and take between ecosystem partners.
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