Authored by Jon Arnold from J Arnold & Associates
When we think about communications – especially for business – it’s natural to be telephony-centric, especially for those of us who pre-date the Internet. Much has changed since that time, and now both text and video-based modes rival telephony for how we communicate. Telephony remains as popular as ever, however, largely due to technology innovation that makes it very accessible and affordable. With those barriers removed, the telephony pie has become bigger as the use cases continue to grow.
Conversely, those low barriers have also made telephony a big, easy target for bad actors. Telecom fraud takes many forms – mainly variations around spam and scams – and we all know what those look like. Whether or not you’ve fallen for any of these schemes, they keep coming, and we’ve now trained ourselves to only answer calls from those who we know. Telephony is no longer a trusted channel, and to address this, initiatives like STIR/SHAKEN have emerged. To varying degrees, they are helping restore trust and safety to telephony, but we still have a long way to go.
Looking beyond telephony into the broader communications realm, the same scenario has been playing out in the messaging space. With the advent of smartphones, messaging has grown exponentially, with a multitude of use cases both for business and consumers. The nexus for all this is A2P messaging – Application to Person – where this has become a vital channel for businesses to market their brands to consumers.
Messaging applications, however, are vulnerable to the same fraud schemes as telephony, so the above safety-first mantra applies equally well to A2P. Without it, marketers stand to lose a channel that has become incredibly important for how they drive sales, build brands, and engage consumers.
Solutions have not yet emerged to fully restore trust and safety for any communications channel, but there is a new approach in place for messaging, and A2P in particular. Mobile Network Operators (MNOs) have not been known to work cooperatively, but in the U.S. they have found common cause around this problem set.
Under the auspices of The Campaign Registry (TCR), they have created a centralized registry with which all U.S. messaging campaigns must comply. This positions TCR as a reputation authority for all the various players in the A2P messaging space. A set of standards has been developed to vet campaigns and ultimately raise the bar for safety and trust with A2P messaging.
These standards are built around opt-in and opt-out requirements to show that brands have proper consent from consumers to receive their SMS messages. TCR also requires campaigns to follow industry-based best practices as developed by CTIA. Requirements are also in place to verify that A2P campaigns are originating from legitimate businesses and not fronts for fraudsters. Another element is the requirement to use 10DLC (10 Digit Long Code). Short code messaging has been predominant, as it is easier for marketers to create catchy branding messages that are spelled out as words when viewed on screen, but they are also highly susceptible to being labeled as spam, and then blocked by carriers. Also worth noting is that 10DLC supports both voice and text messaging, providing greater reach for brands.
These new requirements may seem onerous and will add cost for brands and their A2P marketing campaigns, but if safety is restored, consumers will be more receptive to this type of messaging, and A2P will continue being a cost effective marketing channel for brands.
The main message here is to explain a bit about TCRs, and that these mandatory requirements are in place for all new A2P campaigns effective November 17, 2022. This can only come about because a large number of North American MNOs – including majors such as Verizon, AT&T, T-Mobile and US Cellular – have self-regulated to create standards and processes that flow through TCR.
Campaigns that aren’t registered or comply with TCR requirements will be blocked by the MNOs, so this has now become a must-have for brands conducting A2P campaigns. There are even provisions for MNOs to levy fines for non-compliance, so there is also a cost for brands that don’t meet these standards and still try to run campaigns through MNOs.
This approach may seem coercive given how the carriers have banded together, and collectively control access to mobile subscribers. However, these MNOs are acting beyond self-interest in that this approach ultimately benefits all parties here. Most importantly, consumers are protected knowing that these vetted campaigns are legitimate and safe.
Marketers also benefit by gaining more control over their brands, blocking out campaigns from fraudsters impersonating – and ultimately damaging their brands. And of course, MNOs benefit from the healthy revenues attached to A2P campaigns – which might otherwise dry up if trust and safety erodes too far.
The graphic below illustrates the ecosystem for the various parties that are behind A2P campaigns. Each is impacted by the new requirements, so it’s important to see the overall picture.
As with any form of marketing, the ultimate goal is for brands to connect with consumers, but there are many steps involved along the way. For A2P campaigns, MNOs are the channel for delivering messages to consumers, and TCR is the mechanism through which carriers can safely do this. At the front end, they need to know that the campaigns are coming from real brands – not imposters – otherwise, their subscribers will become unwitting targets for fraud.
Then, at the back end, carriers must ensure that their subscribers have knowingly opted-in to receive communications from the brand. Otherwise, the brand’s reputation is damaged by sending unsolicited and/or unwanted offers to subscribers, and the carrier can face a range of regulatory responses that can become very costly.
In this context, it’s easier to understand the rationale behind TCR, as it’s intended to protect the entire ecosystem. Perhaps less clear is the role played by the CSP – Campaign Service Provider – as they serve as the critical intermediary between the brand creating the campaign, and the MNO delivering that campaign to consumers.
CSPs need to understand how to meet TCR requirements for all parties, as their role is to register the brand’s campaign with TCR. Not only are there various requirements to meet – and have them formally vetted - but there are new costs involved to register campaigns with TCR.
The most important message here for brands is to understand what TCR is, along with the current requirements, which only came into effect recently. At its core, TCR is trying to raise the bar for A2P campaigns, and maintain messaging as a high-value channel for marketers to use.
Without this, fraud will only proliferate and further dilute the value of messaging as both a safe and trusted channel. While TCR has more onerous requirements that add cost to A2P campaigns, the benefits should still be worthwhile for brands who view messaging as a key marketing channel. To date, TCR applies just to the US market, so it’s not a global standard at this time. As we track developments in this space, our coverage will be updated, especially if TCR expands to include other markets such as Canada or the EU.
The second takeaway is to spotlight the role of CSPs. They are the prime ecosystem player to register campaigns with TCR, and must manage an extensive process to ensure both brands and MNOs are in line with TCR requirements. With over 100 CSPs in TCR’s ecosystem, brands have a lot of choice for partners.
Making a good partnering decision won’t be easy, since the range of capabilities among CSPs is quite broad. Equally important – given the associated costs with TCR – is that CSPs do not have standardized pricing models. TCR has eight types of fees, with some being one-time or fixed, and others being ongoing, charged on a monthly basis. Some CSPs will charge a la carte for these fees – leading to a potentially higher overall spend, especially if there are add-on costs – whereas others will have all-in-one pricing, which could result in a lower overall spend.
As Principal of J Arnold & Associates, Jon is an independent research analyst providing thought leadership and go-to-market counsel with a focus on the business-level impact of disruptive communications technologies.
