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Raising the Bar for SMS
The document highlights the advantages and challenges of using SMS for business communications, noting a high engagement and read rate but potential delays and security risks from the legacy telco infrastructure. It discusses the impact of routing models and emphasizes the benefits of direct-to-carrier connections for improved deliverability and reduced latency. Case studies provided demonstrate successful implementations using Nexmo's solutions, showcasing significant improvements in message deliverability and user experience.
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Raising the Bar for SMS
- 1. Raising The BarFor SMS Tony Jamous
- 2. So You WantTo Use SMS For Business Critical Communications? 2
- 3. SMS Has TheReach Businesses Want 3 6 billion people reached 6B 92% engagement rate 92% 95% read rate 95% SMS is read within 90 seconds of delivery 90sec.
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- 5. The SMS InfrastructureIs Prone To Delays DEPARTURE CONNECTION IT’S A BIT LIKE TRAVELING INTERNATIONALLY. There are two basic models: hub and spoke and direct. Regardless of which one you pick, your concern is arriving on-time. Just like getting to your intended destination, sending SMS messages globally can be a volatile process where the risk grows with every connection. Connecting Flights Delays Customs X LUGGAGE ✓ ARRIVAL
- 6. Industry Fragmentation DrivesComplexity And Lowers Quality Of Service 6 • Latency • Security • Deliverability • Filtering Infrastructure IssuesLegacy Telco Services SMS CARRIER 4 AGGREGATOR 3 AGGREGATOR 2 AGGREGATOR 1 AGGREGATOR SMS • Legal Compliance • Carrier Compliance • Character set limitations Content Issues • Status • Credit • Roaming • Port Handset Issues • Network performance • Deliverability • Troubleshooting Visibility Constraints App
- 7. Latency Is AByproduct Of The Legacy Telco Model Delayed Message Delivery = Legacy Telco Services Lowest cost routing + + + Multi-hub transmission Message queuing A2P vs P2P Infrastructure SMS CARRIER 4 AGGREGATOR 3 AGGREGATOR 2 AGGREGATOR 1 AGGREGATOR App SMS SMS SMS SMS SMS
- 8. Store-and-forward Model IncreasesSecurity Risks 8 The more hops, the more copies of your business critical communication The more copies of your communications, the higher the chances that someone might view them Legacy Telco Services SMS CARRIER 4 AGGREGATOR 3 AGGREGATOR 2 AGGREGATOR 1 AGGREGATOR App SMS SMS SMS SMS SMS Security Risk SMS SMS SMS SMS SMS SMS
- 9. Multiple Points-of-failure ImpactDeliverability 9 Legacy Telco Services Failed delivery Lowest cost routing Network connectivity Compliance issues Message time-outsSMS CARRIER 4 AGGREGATOR 3 AGGREGATOR 2 AGGREGATOR 1 AGGREGATOR App SMS Filtering = + + + +
- 10. Carriers May FilterMessages Indiscriminately 10 Legacy Telco Services They can also send false delivery confirmations back to the sender With aggregators, your messages might be filtered out and you'll think they were delivered Carriers have the ability to arbitrarily filter messages and prevent delivery SMS CARRIER 4 AGGREGATOR 3 AGGREGATOR 2 AGGREGATOR 1 AGGREGATOR SMS App
- 11. Compliance Issues ExistAt Multiple Levels 11 • Encoding languages • Carrier policy • Block specific words, phrases Country Specific Compliance Carrier Specific Compliance • Privacy • Send hours • Illegal content • Identity issues
- 12. Legacy Telco StructuresDo Not Provide Actionable Insights 12 Legacy Telco Services Did the message get delivered? With legacy telco structures, you don’t know what you don’t know If it got delayed, why? If it didn’t get delivered, why? Did it get delivered on time? SMS CARRIER 4 AGGREGATOR 3 AGGREGATOR 2 AGGREGATOR 1 AGGREGATOR SMS App ?
- 13. Quality Is ChallengingWith Traditional Infrastructure 13 Messages are sent through multi-hub routes that can significantly impact the delivery time of a message 1 Business sensitive material is copied at each hub and can be viewed by anyone who has access to those copies 2 You might not know that the content you are sending is illegal in some countries 4 Each hop your message takes creates a potential point-of-failure and could prevent your message from being delivered 3 Customer care is next to impossible because you have limited visibility that is often inaccurate or fake 5 Latency Security Compliance Deliverability Visibility
- 14. 14 Direct-to-Carrier Adaptive RoutingReal-timeAnalytics Key Requirements to Solve SMS Quality Challenges Enhance SecurityImprove Deliverability Ensure Compliance Provide VisibilityReduce Latency
- 15. Direct-to-Carrier Connections DramaticallyIncrease Deliverability 15 • Decreased latency due to fewer hops • Increased security due to lack of intermediaries • Increased deliverability due to multiple routing options Specific Value Direct-to-Carrier Connectivity - One Hop Max / Typically Zero Hops SMS 3 CARRIER HOP 1 CARRIER HOP 2 CARRIER HOP API App
- 16. Real-Time Analytics EnableReal-Time Troubleshooting 16 Specific Value • Increased ability to identify issues and improve performance • Continual monitoring of key metrics Real-Time Analytics – Record 500 million Data Points Per Month SMS API 3 CARRIER 2 CARRIER 1 CARRIER App
- 17. Adaptive Routing FacilitatesProactive Management of Quality 17 Specific Value • Decreased latency and increased deliverability due optimized route selection • Intelligent selection of routes Adaptive Routing - Predict Failure and Automatically Reroute API ✓ 1 CARRIER 2 CARRIER X ✓ SMS App
- 18. Nexmo’s API EnablesBusiness Critical Experiences Ubiquitous, multi-channel reach Right info, right time End-to-end, integrate and simple Data driven, actionable Global reach, local specificities Secure and private Nexmo Provides
- 19. Case Study: MakingGet-Togethers Easier over all Social Networks THE SOLUTION THE RESULTS THE CHALLENGE • WePopp relies on SMS for its users to communicate with people who don’t have the app or social networks • High message deliverability is critical • Nexmo’s direct-to-carrier approach and adaptive routing ensure maximum deliverability • With Nexmo, WePopp SMS delivery success increased from 80% to 95% globally • In France, where WePopp is based, deliverability improved from 95% to 99% “We tested many different SMS implementations. Not only does Nexmo provide high delivery rates, but it also provides excellent tools to measure success.” — Julien Hobeika, CEO WePopp
- 20. Case Study: WhenQuality of Service Really Matters THE SOLUTION THE RESULTS THE CHALLENGE • Validate new user devices without delay, anywhere in the world • Provide a high quality user experience during registration • Nexmo provides rapid, highly reliable message delivery anywhere in the world • The Nexmo dashboard enables Fring to see deliverability, network bottlenecks, and more • A confidence-building user experience from the start • Elimination of fraudulent device use • Improved conversions and service sign-up “What’s the main reason we chose Nexmo? It has an excellent conversion rate. That’s critical for us.” — Omer Cohen, Operations Manager, fring
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Editor's Notes
- #2 Hello, my name is... Thanks for taking the time to discuss your needs related to SMS and Nexmo’s capabilities. We are really excited about the possibly of helping you raise the bar of your SMS based business critical communications. <Click>
- #3 Most of you here know how effective SMS is as a business communication tool. <Click>
- #4 It has the broadest reach – 6 billion people can be reached with SMS. It has the highest read rate at 95%. SMS is read within 90 seconds of delivery making it the fastest channel for customer interactions. Most importantly, its engagement rate of 92% is three times the engagement rate of email. That being said, when we work with enterprises from all over the world, they ask us some critical questions that are difficult to answer: What is your current SMS deliverability rate? What is the end-to-end latency? How long does it take for messages to be delivered? How many intermediaries can view my messages before they reach the subscribers’ handsets? And finally they ask us for data. Do we have actionable analytics that we can provide them to control and monitor their business critical messages? As we have realized in the last four years in this industry, the main reason why these questions are difficult to answer is inherently linked to why SMS was invented in the first place and how the messaging value chain has been designed. So let’s look at that. <Click>
- #5 SMS was designed 20-25 years ago as a signaling channel; not as a data channel. The original use of the signaling channels was to send messages to control or update user handsets. These messages were sent during off-peak hours and were never seen by users. So by design, SMS and its infrastructure were not built to be a communication channel let alone a business critical communication channel. SMS lacks fundamental Quality-of-Service algorithms that other communication protocols such as TCP/IP have. T – This creates side effects on the quality of SMS communication. Now let’s illustrate the problem with an analogy that you might be familiar with. <Click>
- #6 Sending SMS is a bit like traveling internationally. Say you want to go from Los Angeles to London on United Airlines. United will decide to route you through their Chicago Hub. This Hub-and-Spoke model that United uses allows them to achieve global reach. However, the Hub-and-spoke model has a side effect in that it creates delays due to knock-on effect. For instance, if the weather in Chicago is bad, you get delayed in Chicago and then you’re further delayed in reaching your final destination. You also encounter local customs that are country specific and are subject to change. You may even encounter airline-specific regulations that affect your travel experience. Finally, the airline industry is driven by Least Cost Routing, where the “carrier” or the vendor is focused on margin optimization rather than quality of service. So they will decide to route you based on what is best for their bottom line. As you can see, the hub-and-spoke model in the airline industry achieves global reach but generates negative side effects on quality. This is similar to how the SMS industry works and how its chain is designed. Networks send messages through geographical areas that are profitable for them. In order to get global with SMS you have to build a massive web of network-to-network hops. T – These hops pass through aggregators that are chained together to give you reach but come at the cost of quality. <Click>
- #7 Now if you look at how the industry is structured, you will find that the Legacy Telco Services are fragmented (there are a thousand carriers across the world), which increases complexity and causes a host of issues. You want to get your messages to your customers around the world. In a typical situation, your messages are sent to an aggregator that is local. That aggregator then passes the message along to another aggregator and so on and so forth until it reaches an aggregator connected to the carrier of the phone you are trying to reach. At each step there are a number of potential issues that may come into play. These issues can be related to – Infrastructure such as latency, deliverability, and security. Message content in terms of local compliance, carrier compliance, and character set Individual handsets – phone is off, out of reach, or out of credit Visibility constraints on data related to individual message performance or network performance. We can’t do anything about handset issues because there is no way to deliver a message to a phone that is off or to a customer who hasn’t paid phone bills. But we can do something about the other issues. T – So lets look at the infrastructure and content issues that might cause issues when delivering a business critical message. <Click>
- #8 Similar to the Airline industry, the first issue with the Legacy Telco Services is latency. Most Aggregators route their SMS traffic based on Least Cost Routing. They change where they route messages based on how much it will cost them. This results in multiple aggregators routing through the same place to get from point A to point B. Lets say 4 different aggregators are all passing their messages through the Aggregator 2 in this diagram, this can build up a massive message queue that takes time to work through. So your messages go through Aggregator 1 quickly, but get stuck at Aggregator 2 for hours. At each one of these points you might have massive message congestion that increases the amount of time it takes to deliver your message. You might care about quality and speed of message delivery but this conflicts with how the value chain is driven – by margin maximization. T – The second issue with the legacy messaging value chain is security <Click>
- #9 SMS technology is built on a store-and-forward protocol, which means that each network copies your message before it is passed along. On each hop, there is a risk that someone might read your messages. And every time a message gets copied onto a new network that risks increases dramatically. Now some companies are compliant and ensure that messages are not viewed, but if banking information or password reset communications are being sent, it is key to secure the full chain from your app to the final handset. T - Lets see now how regulation and compliances might might affect quality. <Click>
- #10 By definition, introducing more and more hops increases the number of points of failure. Since aggregators are driven by cost optimization, your message might bounce around into a few different countries before it ends up at its final destination. Similar to the airline industry, countries or carriers might have their own regulations. If it passes through a country that has a unique SMS content law, for example, you cannot send URL’s via SMS in Japan, the message could be blocked without notice despite the fact that the content is legal in the final destination. Another example is encoding support. Let’s say you want to send a message encoded in unicode, e.g., an Arabic or Chinese message. If one of the hops that your message arrives at does not support unicode, your message will be blocked without notice. T- Filtering is another key issue that has multiple layers and can cause frustrations for businesses using SMS. <Click>
- #11 Now, let’s take a step back and see why filtering exists in the SMS industry. In developed countries, carriers rely on regulation to protect subscribers from spam and it works relatively well. However, in emerging countries, where regulation is difficult to enforce, carriers actually use technology to protect their consumers. This is similar to spam email filtering technology. While it may prevent spam, it has its drawbacks and imperfections. Carriers may block messages indiscriminately if your message contains certain words. For example, the carrier Orange in Romania will block any message with the word “orange” in its body of text to prevent scam campaigns that use the company name to trick customers. Even though your messages might be legitimate, they can get caught in a carrier’s spam filters. And worryingly, you will still receive a positive handset delivery confirmation. T – Filtering is just one aspect of a greater issue in the legacy telco structure: compliance is one of the hardest things to maintain. <Click>
- #12 Similar to the Airline industry, compliance really exists at two levels. The country level, where there are legal requirements that your messages must adhere to, The carrier level, where they have individual policies dictating what they will allow through their network. With over 200 countries and hundreds of carriers globally, it is extremely difficult for any company to understand and stay current on these requirements that change frequently. A lot of our customers, when they first come to us, have applications specific to each country. This requires dedicated resources to read through 200 pages of regulations per country and to build country specific apps. What our customers are asking for is the capability to simplify this compliance landscape. T – The last issue resulting from the legacy Telco design is the inability to see what is really happening with your messages. <Click>
- #13 We’ve spoken at length about how this multi hop system impacts quality and delivery. In addition, it impacts the ability to measure quality and delivery because the further you are from the final carriers, the more your data gets lost in translation. Not to mention that it can be faked from the handset delivery confirmation as in the case of filtering. Carriers have different sets of error codes and delivery status. Each aggregator attempts to translate and simplify this set of 200+ error codes into a manageable set of say 20. So it really depends on how good the final aggregator in the chain, Aggregator 4 in this example, is at translating and categorizing the final carrier’s error code set to make it useable. Now if Aggregator 2 changes the route to maximize its margin, well, you will get different set of error codes from the new route provider that uses a different translation map. If the error codes keep changing with the change in routes, it becomes very complicated over time to track and measure quality. The lack of actionable data leaves businesses with more questions and very limited ability to answer them. T – To sum it up, quality is challenging with traditional infrastructure. <click>
- #14 The multi-hop structure creates latency. Each additional hop increases the security risk. Each additional hop increases the possibility of delivery failure. Compliance must be maintained at both country and carrier levels. And, the lack of actionable data makes it difficult for businesses to measure and benchmark their performance. <Click>
- #15 Nexmo was founded four years ago to raise the bar for SMS. We looked at the problem as one caused by the industry structure and we adopted an approach that we believe is the right one to address the pain points businesses face with SMS. Our solution is built on the three unique pillars. Direct-to-Carrier Relationships –getting as close as possible to carriers Real-time Analytics – collecting data and making it actionable Adaptive Routing – sustaining a high quality of service for customers using proprietary algorithms T – Lets begin with how a direct-to-carrier model is better than the traditional hub and spoke model. <Click>
- #16 Let’s draw a parallel with the airline industry again. We’ve seen the emergence of carriers that employ a point-to-point model such as EasyJet in Europe and SouthWest in the US. These airlines do not employ a hub and spoke model, and thereby eliminate all the associated problems to create more value for their customers. Similarly in the SMS industry, we at Nexmo have spent the last 4 years building a “one hop max” to any carrier network. It is either 0 hop or 1 hop max. When you send a message it goes from your application to our API and we get it directly to the carriers to reach your customers. No hops. No handoffs. No aggregator queues. No lowest cost routing. You get decreased latency and increased deliverability because of our direct-to-carrier connections. This approach also increases the security of your communications as well as the message does not get copied at multiple hubs. T – The other benefit of this direct to carrier model, is that we get actionable data that feeds our real-time analytics engine. <Click>
- #17 Today we collect more than 20 million data points per day. These include Delivery Status, Delivery Confirmations, and Delivery failures. We use this information to build two key measurements of quality, R1 and R2, that are based on real, empirical data.. R1 Data: “Success Ratio” is the percentage of messages received by the handset. R2 Data: “DLR Ratio” is the percentage of messages with a delivery status, regardless of the success. In addition we gather data on why the message was not delivered. Because of our direct-to-carrier approach removes the hops, our R1 and R2 data are more accurate and actionable. But this is not enough because of faked handset DLR for e.g., in case of filtering. Therefore, Nexmo introduced a third quality measure called Conversion that is unique to the way we operate. Conversion Data: We know if the message resulted in a user action, say click on a link or entry of a pass code. This feedback loop we believe is the ultimate measure of quality, complemented by the first two. Looking at these three ratios in real-time provides a holistic view of the network performance. These three ratios allow us to track our overall delivery rates on specific carriers in specific areas. It gives us actionable insight into which messages are being delivered and which are not allowing us to track in real time how networks are performing globally. All of this data is publicly available on our Dashboard real time so you can see how carriers and routes are performing for Nexmo as a whole. You can also benchmark your own data against the Nexmo network averages. T - With this data we can spot filtering and identify carrier or network issues and actively reroute messages with our adaptive routing technology to ensure delivery. <Click>
- #18 With legacy network design, you need to rely on customer complaints to notify you when your messages aren’t arriving. We have a developed a better way that is proactive, adaptive and agile. Our adaptive routing algorithm intelligently influences the way we route messages based on the actionable data that we are gathering in real time. Based on the feedback loop we can adjust the route in real time to ensure messages are delivered and thereby sustain a high quality of service for our customers. <Click>
- #19 In summary, you can raise the bar of your business critical communications with Nexmo. Easily integrate our Cloud API Gain multi-channel reach anywhere you want to expand your business. Scale globally without having to pause and learn new local regulations Deliver messages to the right customers at the right time Use the most secure, private method for SMS communication Get the data you need to measure your success and drive growth T – Lets now look at how some of our customers are benefited from our approach to quality. <Click>
- #20 This is an example of our customer WePopp. WePopp provides a simple way to coordinate social events allowing you to send invitations via email, SMS, and messaging systems within social networks. WePopp users found that invitations via SMS garnered a very quick response. As a result, SMS deliverability became very important for WePopp. As WePopp text message use increased, certain challenges became apparent. WePopp’s SMS provider did not have carrier relationships outside France and an increasing number of messages from international users were not reaching intended recipients. WePopp plugged in to Nexmo’s APIs and transparently benefitted from Nexmo’s global direct to carrier network and adaptive routing technology. When they looked at the results, they saw an increase from 80% to 95% in SMS delivery globally. Even in France, where WePopp had a direct connection, their deliverability improved from 95% to 99%. This is because carriers are not perfect and experience downtime from planned maintenance, backed up queues from big campaigns etc. With Nexmo, we not only have direct connections to carriers in France, but also have multiple other routes to reach carriers in France. So even if a carrier is backed up, we can send the message through our other routes to ensure message delivery.
- #21 Fring is a mobile app that allows it users to call, text, and video chat with other users for free. Fring uses Nexmo to authenticate users with a one-time-password during user acquisition. This is a business-critical use case where they could be paying $3-$5 (industry avg.) to acquire customers and it is critical at this juncture that the passcode be delivered to a user. Fring plugged in to Nexmo APIs and increased their conversion across the board. This not only decreased their user acquisition costs but also created incremental value with each additional user acquired. As they use Nexmo’s Conversion API, we are able to show them their conversion data in real time to measure their performance and benchmark with the Nexmo average conversion on any carrier.