SMS marketing vs. email marketing: Which offers the best ROI for business?

Both SMS and email marketing have carved out their own niches in recent years. In a relatively short period of time they’ve gone from being marketing tools that businesses approached with trepidation and reserve, to something which many organisations simply refuse to go without.

Whilst they can work very effectively alongside one another (sometimes adding up to more than the sum of their parts) many businesses are faced with a decision between the two that is based solely on their finances. With the prospect of paying out for both sometimes not an option, a decision has to be made on which to go for. Of course, in the metrics and results based world of marketing, there’s one variable that trumps all others, ROI.

A good return on investment will not only offset the initial cost but also help a business grow and even produce more opportunities to invest in other forms of marketing. So with this in mind, as a straight, two-way fight between SMS and email, which comes out on top for ROI?

Capital expenditure and operating expenditure

As most people will be already aware, text messages cost to send, whereas emails are free. As such, many think that email is much less costly to get up and running, whereas texts require a notable chunk of investment. This is to ignore the aspects of capital and operating expenditure, though, which can often prompt rather different results.

Certainly, capital expenditure will be higher for SMS campaigns, as there are a certain number of messages that need to be paid for before they reach users’ devices, but the same isn’t quite true for operating expenditure.

With email, marketers often have to keep up with costly subscriptions to keep the management system or CRM. On top of this, designers and copywriters are needed if firms want to ensure their messages are engaging and don’t rely on lower quality email templates. Conversely, these concerns are nowhere near as prevalent for text marketing, thus bringing operating expenditure down.

Round one: Tie


For many Brits, email seems almost ubiquitous. Since emerging as a rather colloquial, informal mailing service, it has gone on to become much more commonplace, with people now using it not only for writing to relatives, but also the much more formal viewing of bank statements and receiving event tickets.

What may come as a surprise, though, is that figures recorded by Ofcom in 2013 discovered that only 78 per cent of Brits use email for communication. For SMS, meanwhile, the total was 81 per cent.

Elsewhere (and worded just slightly differently), Ofcom found that 73 per cent of Brits send and receive emails every week, while 13 per cent do so ‘less often’ – thus providing a total of 86 per cent. For mobile phones (both of the ‘smart’ and ‘feature’ varieties), the usage figure is up at 94 per cent.

All of the above should attest that, if you want to reach a larger percentage of your audience, targeting phones and not inboxes is likely to be the most successful option.

Round two: SMS


Of course, reaching consumers is just half the battle. What really makes the difference is getting them to engage, which could be anything from simply replying to sharing the message among their peers or acting upon the call to action. Thankfully, there are plenty of statistics on just how effective this can be for both emails and SMS.

Silverpop is just one company which has monitored open rates for email addresses, which it has thankfully broken down into mean and median averages. For note, the mean average is calculated by adding up the results then dividing them by the number of numbers (the total which were added together). The median, however, is discovered by arranging all the numbers in ascending order and choosing the middle one.

Silverpop found the global mean average for unique email open rates to be 19.7 per cent. The median average was 17.1 per cent.

When turning to SMS messages, meanwhile, the difference could hardly be starker. The open rate for texts is nearer 99 per cent, according to figures from Single Point. As messages simply pop up on a user’s phone – and sometimes even send continual reminders until they are read – the open rate is staggeringly large by comparison.

Not only that, SMS messages are often read much sooner after being received – for the above reason. Whilst emails can stagnate in an inbox (or junk folder) until the user comes across them, text messages pop up with all the relevant alerts, bells and whistles. When considering this for ROI, such benefits enable marketers to act quickly and get in touch with users straight away, opening up the chance to send messages whilst they’re in a shop, for example, or even as they’re on the approach.

Round three: SMS


So for all of the above, what method offers the greatest return on investment? SMS certainly has the upper hand where reach and engagement are concerned, but may require more money up front to get started. Email, on the other hand, will typically cost less to get going, but falls down somewhat in the day-to-day stakes. For this reason, it’s easy to see why some small companies or start-ups may turn to email, but those with a little more cash behind them may prefer the superior options that SMS could produce.

Round four: Tie

And the winner is…

After a strong start from email, SMS produced a strong comeback with big hits in both the reach and engagement stakes. Attractive figures for SMS usage and open rates gave it a lead in round two that, once it had established, didn’t ever look like giving up.

Of course, there are benefits to both options and may reach their best when deployed symbiotically. In isolation, though, it was SMS which looked more likely to deliver a knockout blow.