With a 98% open rate—that’s right, 98%—SMS marketing can be incredibly effective, but deliverability is key, and AI can help here.
Today we’re going to explore the transformative role of AI in SMS marketing strategies. Joining us is John Wright, CEO of TrueDialog, to discuss how AI-driven tools are enhancing SMS deliverability and overall marketing effectiveness.
About John Wright
John has served as CEO of TrueDialog Inc. since 2014. Prior to his role at TrueDialog, John held senior leadership positions with Flonetwork, (acquired by DoubleClick) and DoubleClick (acquired by Google), Fortiva (acquired by Proofpoint), and Digital Impact (acquired by Acxiom).
John is considered a subject matter expert in online and offline data, database marketing, and marketing automation and high growth management, having spent much of his career connecting online and offline audiences with retailers through ad-tech, eCommerce, and CRM platforms.
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Transcript
Note: This was AI-generated and only lightly edited.
Greg Kihlstrom:
With a 98% open rate, that’s right, 98%, SMS marketing can be incredibly effective, but deliverability is key, and AI can help here. Today, we’re going to explore the transformative role of AI in SMS marketing strategies. Joining us is John Wright, CEO of TrueDialog, to discuss how AI-driven tools are enhancing SMS deliverability and overall marketing effectiveness. John, welcome to the show.
John Wright: Thank you for having us on your pod today.
Greg Kihlstrom: Yeah, yeah, looking forward to talking about this with you. And you know, before we dive in, why don’t you get started by telling us a little bit about your background and true dialogue and you know, what led your team to focus on leveraging AI to tackle SMS deliverability challenges?
John Wright: Well, thanks so much. A little about me. My background is I’ve been in technology, specifically messaging technologies, for the last 20 years. The first startup I was involved with was an email marketing company called Flow Network out of Canada. We were later acquired by DoubleClick, which is now part of the Google portfolio. True Dialog is an enterprise CPaaS platform. CPaaS, for those maybe not familiar, is called Communications Platform as a Service, and we provide software for our customers that gives them the ability to connect with their customers prospects and employees via our enterprise UI or one of our native integrations. In the last seven or eight months or seven or eight years rather you know our fastest growing channel for connectivity and messaging has been SMS and specifically 10 DLC and for those unfamiliar with the vernacular of SMS and messaging, there’s really three types of codes that customers have been using in the last 10 years. First is the short code, which is that five to six-digit code that you probably get your two-factor authentications from companies like Salesforce and Google. We also have long codes, which are your traditional phone number, like what mobile phones you and I talk with using our Verizon or AT&T or T-Mobile connection. And then there are 10-digit long codes, which is a relatively new application that the carriers have implemented over the last two to three years in an effort into reducing spam. In the early years of SMS, numbers were issued without a lot of visibility into who they were being issued to, and it caused a problem with spam. And over the last Two and a half, three years, the carriers have implemented a system called the 10 DLC and campaign registry, which customers are now forced to go through, register their brand, how they’re going to be using SMS. So if there are problems, they know to who go, they know who to go speak with, with regards to, you know, any issues with regards to a number, particular number that has been sending messages that their user base has said, Hey, this is spam. And specifically, that’s what True Delivery is helping overcome, which is anytime the carriers implement these technologies, there’s also filtering involved. And along the way, all of our clients who are Fortune 500 and large sports teams, education and health care, all different types of verticals, but they get caught in the filtering that 10 DLC provides and trying to protect their customers.
Greg Kihlstrom: Great, well, yeah, let’s dive in here. So start by talking about the role of AI in enhancing SMS deliverability. Again, as the open rates are so high, it’s deliverability here is key. Let’s talk a little bit first by what exactly are the stakes involved in SMS deliverability?
John Wright: Well, I mean, the most obvious one kind of off the starting line is that if a message is not delivered, meaning that an application or a company like ours, which is initiating messages on behalf of our customers into the carrier networks, if it’s not delivered and it’s flagged erroneously or falsely by the carriers as spam, the customer can never get it. If you’re doing marketing efforts to close a sale or to get another sale or to get a customer to take action, obviously they’re not able to because they never get the message. So really the stakes are pretty high in that there could be potential lost revenue if you’re communicating with a customer along, like for instance, our education clients. If they are trying to enroll and they don’t get a message saying your financial aid application is due next Friday and they don’t complete it on time, it’s not only a poor user experience, but that university is losing tuition revenue and, you know, just generally lost opportunities. Our customers, you know, that can cause, you know, customer attrition, added strain, you know, inside of our business, you know, and for our customers who are using it, you know, this lost productivity, but by their customer service or call center agents who are, are using this and causing higher support costs because all of a sudden they’re like, I sent you this message and they’re like, I didn’t get it, trying to figure out what happened to it. And kind of along with that, all of the same stakes that are, you know, lost revenue, poor user experience and overall missed opportunities are the same for our customers as well.
Greg Kihlstrom: Yeah. Yeah. Well, and for those marketers out there that are, you know, whether it’s increasingly relying on SMS or just, you know, rely on it because of its high open rates and things like that. You know, I’d imagine this is, this, this affects the potential reach of, of their marketing campaigns as well. So, you know, how, how should marketers be looking at, you know, deliverability and ensuring deliverability?
John Wright: Well, that’s a great question. And I, I really kind of look at this industry and it’s very similar to what happened on the email world that I was involved with for a long time. And if you remember in the early days of email, several years after that, there were several companies that came along, Return Path, Email on Acid, Pivotal Veracity, that helped companies understand the overall deliverability as email spam engines started filtering legitimate messages from marketers. And the same thing’s happening here. And I think that the statistic that you use, 98%, which is what Pew Research produced on an open rate, if it gets delivered to the handset, they’re seeing 98% opens. If you don’t get it to the handset because it’s being blocked, you’re missing out on a significant amount of opportunity for your consumers to interact with you.
Greg Kihlstrom: Yeah, yeah. And so, you know, with with the introduction of true delivery, which which you briefly mentioned, you know, your team has reported up to an 85% reduction in messages being falsely flagged as spam. So, you know, can you elaborate? There’s some AI behind this, you know, how does AI contribute to achieving such significant improvements in deliverability there?
John Wright: Again, this is something that came out of, you know, really our own needs internally, which was as 10 DLC continued to grow. And really, it’s not even grow, it was something that was being forced by the carriers. And that if you want to be able to play in their sandbox, you need to go through and register, much like, you know, in the banking regulations and know your customer, the carriers want a very similar thing in place. And they do not want what happened in email to happen inside of the carrier networks. And we, as they started implementing 10 DLC and implementing filtering across the 10 digit long codes, We started seeing an increase inside of our customer service department with customer inquiries saying, hey, my customer said they never got this message. And we started doing our own internal research and we deliver hundreds and hundreds of millions of messages on behalf of our clients. And as you can imagine, with the vast volume of data that we’re dealing with, it’s finding a needle in a haystack. What’s causing it? What’s causing it to happen? And we started seeing this at the, you know, right as ChatGPT and other AI tools started hitting the market. And one of the challenges that we face specifically was is that, you know, we deal with a lot of higher education. Our data and our customers’ data, we can’t let that outside of our ecosystem. We’ve got a responsibility to protect that data. So we started going down the path of using AI to look at all messages being sent that our clients were sending, and then looking at the return codes that the carriers provide us with, saying it was delivered, it was not delivered, this message was not delivered because the number no longer exists, or the cell phone is out of minutes, it’s a prepaid cell phone, or there’s a code that comes back and saying block spam likely. We started doing evaluations of different AI tools. We ended up settling up on Microsoft’s AI tool inside of Azure, which is our entire TechStack is inside of Microsoft Azure, and we started testing. Along the way, we started using AI and machine learning to basically run through and build algorithms that determined, here’s what was delivered, here’s what was not delivered, and here’s what was not delivered because of spam, and assigning scores and building algorithms and models built off of that. From that, the way AI works is it goes through and it looks at every individual word, assigns a score, and it starts looking at similarities across those. And because of our large volumes, that gives us a really good read as far as what is and what is not likely to get screened at the carriers. We also started breaking it down by carrier because every carrier has different filtering rules that are in place. And that allowed us to deliver a a product that our customers can use prior to delivery. So unlike email, where you would get a list of domains and email accounts that you would send to to see what your deliverability into Gmail or into Hotmail or into these different mailboxes and tell you what is and what is not going into these mailboxes, ours looks at things prior to delivery. Also, with our ongoing generative AI learning, because they’re changing the rules every day, what is and what is not likely to get filtered. Our system is easily able to update and give our customers a preview as far as the likelihood of it getting blocked or getting delivered by carrier.
Greg Kihlstrom: I think I know the answer to this, or at least part of the answer to this, but just to confirm, it really is the volume of messages that makes this this so powerful, right? So you know, in other words, a company that sends, you know, a few 1000, or even, you know, in the low, low millions of messages could probably do some analysis, but you’re the breadth and depth that you have. And the ability to do this really helps that the AI have make better predictions and all that stuff is when you say that’s true.
John Wright: Without question, you’re right on point. And, you know, I think that the second thing is, is that, you know, we the other kind of side benefit in that, you know, having the customers and health care and government and higher education and our dependencies in that we don’t let our our information outside of our own network and share it with a public AI like check GPT is is that we get smarter and smarter and smarter. And it also is very proprietary to us and allowing us The law of large numbers allows us to not only identify trends very quickly, but also, as they’re adjusting things inside of the carrier networks, for us to identify those as they happen.
Greg Kihlstrom: Digital marketers, this one’s for you. I’ve got 30 seconds to tell you about Wix Studio, the web platform for agencies and enterprises. So here are a few things you can do in 30 seconds or less when you manage projects on Wix Studio. Work in sync with your team on one canvas, reuse templates, widgets, and sections across sites, create a client kit for seamless handovers, and leverage best-in-class SEO defaults across all your Wix sites. Time’s up, but the list keeps going. Step into Wix Studio to see more. So I want to talk a little bit about integration of AI and marketing strategies here. And, you know, a recent Forrester report indicated that businesses attribute almost 13 percent of their online revenue to SMS marketing. So, you know, given given this, you know, that’s a that’s a pretty large share for some pretty large companies. How should companies be looking at integrating AI tools like yours and others to protect and increase this revenue stream?
John Wright: Well, I think it’s paramount, right? And I think that we’ve seen over the last six months, a significant decline as Google and Microsoft and others have really turned the filters up on email. And we’ve seen, I think that number is actually growing. because of the filtering that’s happening at the carriers, or I’m sorry, at the ISPs with regards to email deliverability. We’ve seen a sharp decline in the overall effectiveness of email, which has been constant since I got in the game back in the late 90s when email was kind of in its infancy. And seeing how it grew, you know, today as email becomes a more difficult mechanism to use profitably, text is really increasing. And as the carriers continue to streamline their detection tools, the landscape is just changing daily. Multiply that by, let’s just say there’s five main carriers in the U.S. T-Mobile, Verizon, AT&T, U.S. Cellular, and Dish Network. They each manage their own networks. apply their own rules, you know, it’s not easy. And, you know, getting around, you know, and building what, you know, in the email world, we’re static models, in order trying to determine deliverability, ours are in real time and generative. So they’re, they’re updating in real time, if you, you know, if you’re a large retailer, and you’re sending out a message to a million people who purchased from you in the last 90 days, and you’re doing a you know, let’s just say a 4th of July sale since we just passed 4th of July recently. a decrease in that of two, three, 4% of your overall response rate is a significant amount of lost revenue. And it’s using tools like this to ensure deliverability of your message, not only that your messages are getting sent, but getting delivered to the inbox, I think is paramount to the overall success of any company who’s engaging with their customers or students or whatever via SMS.
Greg Kihlstrom: Yeah. Yeah. And, and so, you know, not only is it, um, SMS marketing, you know, again, about 13% of, of online revenue currently, you know, the, the market itself is estimated to reach almost 90 billion, but 89.2 billion by 2030, you know, as you kind of mentioned with email, you know, the lots of, it’s a popular medium and therefore there’s a lot of people trying to exploit it. SMS, as it continues to grow, is AI the key to evolving and meeting not only the increasing demands of a growing medium and channel, but also in just the complexities of, you know, if there’s more SMS messages going out, then there’s gonna probably be more potential fraud and more things to mitigate against. So, you know, is AI the key here?
John Wright: Yeah, I think that the AI is definitely one of the keys to success here. I think that the carriers are doing a really good job as far as narrowing and mitigating risk as far as people who are trying to gain access to their infrastructure and send messages, whether it’s smishing or phishing campaigns that they’re trying to run. And 10DLC has knocked out a big chunk of that. I think they’re going to continue on their end. They’re applying AI in their own infrastructure networks. And, you know, we work very hard. I think one of the things that I’m very proud of as a business that we do is we turn down I don’t know, of our overall people who are trying to register and come in and try to use our system. You know, we maybe accept 20 to 30 percent of our customers that are 20 percent of the traffic that’s coming in because we’re using tools to not only, you know, help deliverability. That’s a powerful tool. We don’t want that getting in the wrong hands of bad actors. But, you know, we see that it’s not only A2P messaging, but P2P messaging is getting blocked as well. and using tools like, you know, how we’ve deployed it for our customers. You know, I think that with the volume of data that the carriers are dealing with, that companies like True Dialogue are dealing with, I don’t know that there’s any other way other than to use AI in order to deploy it to handle the voluminous amount of data, as well as the constant changing and tweaking that the carriers are doing. And that’s each individual carrier. So again, multiply by five because they all have different settings and being able to identify those quickly is paramount to the overall success of our customers.
Greg Kihlstrom: Yeah. Yeah. And real quick, like terminology check, you use the term A2P and P2P. Do you mind just explaining for those less familiar? Not at all.
John Wright: P2P messaging is if you and I were to communicate, it’s called person to person. And that’s like if you and I were having a one to one communication. And that is not governed by the carriers. They don’t require a 10 DLC registration for that. A2P, or application to person, is business to person communication. So a business or a government entity or a higher education institution that wants to communicate with their end users, that, by the carrier’s definition, is called application to person, and that’s what requires the 10 DLC registration and that’s where the filtering starts, if you will.
Greg Kihlstrom: Yeah, yeah, got it. No, that’s, that’s helpful. Well, um, I want to, as we kind of wrap up here, I want to talk about a few, you know, future, future leaning things. For those listening out there, you know, have a lot of marketing leaders and aspiring leaders listening out here, you know, what, what strategic considerations should companies keep in mind when thinking about how to, you know, adopt AI enhanced SMS tools and, you know, knowing that this market is it’s already big, but it’s continuing to grow. You know, what are some of the strategic considerations?
John Wright: Well, I think, you know, I’ve mentioned a couple of times during your podcast, but I think, you know, the first one that entities should consider is, you know, where do you want your data to end up? And I know that’s a bit of a, you know, you know, a stumbling block for a lot of people. But what I mean by that is, is that it by, you know, incorporating things like a chat GPT, great application, I think it’s a terrific company. But you have to remember that as you submit data into an application like chat GPT, that data can be used by anybody who’s inside of the chat GPT universe, right? Because it is using it to further enhance and learn and optimize its generative AI through your data. Our clients, because of their specific needs and their desire to keep their data out of public AI or open AI applications like chat GPT or open AI, making sure that whatever application that they’re using meets your data requirements. Everything that we do is closed. It’s inside of our own knowledge base or AI. knowledge base and is not shared with any public concerns. And it’s also anonymized, so it’s not at a client level. It’s looking at the overall level of messaging and protecting. The other thing to consider is that we’ve been very careful in that our customers are not just concerned with their own outbound messaging activities going into public open AI applications, but even more than that, they’re concerned about their customers’ information, meaning their responses going into an open AI type application and the impact that it can have on their own privacy and the standards that they’ve set forth inside of their privacy policy, we screen out and don’t use any incoming data. The only thing we’re looking at is the outbound delivery data that is being sent from our clients to their customers and the elimination of all inbound data, which would be catastrophic if customers were sharing PII over text and those got included into open AI or chat GPT type application sets.
Greg Kihlstrom: Yeah, yeah, absolutely. Well, one last question for you here. Looking forward, what are you keeping an eye on? What emerging AI capabilities or other innovations do you think are going to further transform SMS marketing and customer engagement on this medium?
John Wright: Well, it’s great. Again, a great question. probably the most obvious that’s being deployed today are chatbots, right? They’re already out there. They’re already, you know, growing and improving. And I think the same things that you’ve got to take into consideration as we just talked about is, you know, What guarantees are you making with your customers as far as what’s getting shared? I think a lot of people have adapted chat GPT and again, great application, but just realizing that you’re sharing data and that’s outside of any agreement. So again, I think that what we are going to see is that a lot more private BYOB, if you will, Bring Your Own Bot, where you’re building your own chat index and it’s only being built off of your data, I think is probably one of the things that we’re doing currently, and we think that the market’s going to be trending that direction. We also think that generative AIs can be applied in many different aspects of our industry. Things like response models going through and things that are being used in other marketing channel, like changing content at an individual level to optimize response rates because you’re able to look at individualized generative learning behavior based off of all of your prior response data that is coming in out of SMS. And again, being able to update those in real time provides a real advantage to customers who are, I think, advanced and forward-leaning enough to where they can take advantage of that and they have a good understanding of data and how to optimize data, therefore optimizing the response rates by tailoring content, but also eliminating messages to those customers who are not likely to respond, which is a, you know, if you can cut out the cost component of sending out, let’s say, if you’ve got a million customers inside of your database and you can identify 300,000 of them that only buy that one time a year, and have never purchased anything else in identifying those customers that maybe were in that 300,000 that don’t reply that have suddenly started purchasing every month. Those are big benefits that can be taken advantage of by using AI type applications.
Greg Kihlstrom: Yeah, yeah, I love that that train of thought there. Definitely. It’s you know, it’s something I’m seeing and other with other channels as well, just the potential of that actual one to one personalization that you know, many have been talking about for I feel like we’ve been talking about it for decades, but it’s it seems like we’re on the cusp of it with with some of this gen A.I. stuff. So I love that we’ll have to we’ll have to talk more about that. Maybe maybe have you back on the show and talk more about that.
John Wright: Well, thank you so much for having us on the Agile Brand Pod, Greg. I really did enjoy speaking with you. And as we’ve got more cool A.I. marketing applications cooking in our kitchen, would love to come talk to you about them.
