A new report by DecisionTelecom reveals that SMS marketing is now a core part of marketing strategy, and AI is rapidly enhancing its impact.
Based on insights from 546 marketing professionals, The State of SMS Marketing: Adoption, AI Integration, and Future Outlook reveals key trends, strategies, and challenges shaping SMS marketing today.
According to the study, some 80.4% of businesses are actively using SMS marketing, with an average SMS marketing budget of around 18.76% of the total budget. The adoption rate of SMS marketing differs by company size. With medium-sized companies (51–250 employees) leading at 35.8%, followed by small businesses (1–50 employees) at 32.8%, and large enterprises (251+ employees) at 31.4%. It is clear that SMS marketing extends to all business sizes, and organizations are favoring immediate reach.
Retail companies have established themselves as the leaders in SMS marketing adoption as they require both fast promotions and effective customer interactions, driving a 19.8% adoption rate. The technology industry stands as the second biggest industry using SMS marketing, with 17.5%, followed by finance with 12.3%, education with 11.6%, along with e-commerce at 8.9%, and healthcare with 8.7%.
AI everywhere
Of these many users of SMS marketing, one in every six companies (60.4%) is actively using AI in their SMS campaigns, with ChatGPT leading the market for chatbot integration in large-scale SMS interactions, with 69.8% of companies reporting its use.
The report also shows that more than half of the companies (64.5%) are planning to increase their budget for SMS marketing in the next year, with 78.5% of them allocating a heavier investment in AI integration.
Personalisation and optimisation are the top aspects for AI implementation. The most common use cases are automated segmentation and targeting (31.3%), content personalisation (27.2%), and handling customer replies (26.4%).
AI has successfully produced substantial results:
- Conversion rates increased by an average of 26.6%
- Engagement metrics rose by 25.8%
- Cost efficiency improved by 24.6%
The most common gain is around the 11-25% range, leaving room for even bigger improvement in the future. Some of the outliers (13.2%) report over a 50% increase in conversion, while a considerable number of businesses (25.7%) are experiencing around a 26-50% boost.
However, around 5.3-5.7% of the participants are not witnessing any changes, revealing some potential misalignment between the user and the technology
Barriers to SMS marketing adoption
Even though it has achieved popularity recently, SMS marketing is still facing fierce competition from email and social media, which have proven their effectiveness over a long period, accounting for 72.9% of non-adopters’ choice of alternative platforms. These traditional digital marketing tools continue to dominate marketing campaigns, as many industries require comprehensive content types that are not accessible with SMS marketing technology, says the report.
