Short Codes are Not a Scam

Editor’s note: This guest post was written by Jared Reitzin, the CEO of mobileStorm, a Communication Service Provider (CSP) that provides digital marketing services including SMS, as well as mobile applications and secure communication technology for healthcare organizations. I must admit. I got a lot of flak from colleagues for using the word “scam” in my …   Read More

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Editor’s note: This guest post was written by Jared Reitzin, the CEO of mobileStorm, a Communication Service Provider (CSP) that provides digital marketing services including SMS, as well as mobile applications and secure communication technology for healthcare organizations.

I must admit. I got a lot of flak from colleagues for using the word “scam” in my previous post, “Short Codes are a Scam and SMS Marketing is Dying. Is There Hope?“. But let’s face it, controversy captures attention. If you are a mobile marketer, short codes are extremely important to you. It’s critical to the future of my company and hundreds more like mine, that we can engage in a debate, and hopefully change the way things are done. I need my message to reach as many people as possible, and one of the ways to do that is to say something that will get people to listen.

Do I think short codes are a scam? No. And if you read my entire article, you understand that is not my argument. Short codes are valuable and profitable, but they are not managed correctly. My four biggest issues:

  1. There is no competition. You have one place to go if you want a short code. As a result, the system is expensive and slow. Competition would force price down and service up.
  2. You have to pay to license a code, months before you can actually use it.
  3. Codes cost $500 to $1,000 a month, but there is no evidence supporting why they should cost that much; and nobody has told us why.
  4. Short codes take months to set up, causing major delays in conducting business. I have seen an entire business plan on hold waiting for a code that took 6 months to be provisioned. An investment could be made to automate this process.

So far, my article has received the most amount of comments any article as ever generated since MMW was founded in 2007. It was re-tweeted 100 times and posted on more websites than I was able to count, including features on MobileMarketer.com and MobileCommerceDaily.com. I also received more personal emails than any other article I wrote, and had 3 powerful people in the mobile space call me to talk with me off the record.

In other words, I just strummed an Emajor7.

If you read the comments its clear why; people want change. All we are asking for is a conversation to take place, and a promise that the people behind usshortcodes.com will listen to us and give change a fair shot. The reason two antitrust lawsuits have been filed is because the current system is not fair. There is no competition and as a result, there are consequences that we have to live with.

When you have no choice, it’s going to cost you. When you have no choice, then you will pay for service you cannot use. When you have no choice, you will wait until someone is ready to help you. I have some great ideas on how we can see explosive growth in mobile marketing, but nothing will change if the people we want the change from, can’t even start out by commenting along with everyone else. There has been no official response from Neustar or the CTIA, even though we are currently in the era of the social web. You almost cannot, not, say anything nowadays. Especially after someone comes out with the type of headline like I came out with. Get mad, get angry or at least tell me that using “scam” as a choice of words is not fair; I can admit when I am wrong. I can apologize and be transparent in a public forum. This behavior is expected of us now. Silence is the worst thing you could do. When you won’t join in the conversation, it allows people to decide for themselves as to why you are not getting involved. I don’t know about you, but the last thing I want is a bunch of entrepreneur’s with 500+ connections on linkedin putting words in my mouth.

I googled “core values” for Neustar and the CTIA. In their defense, Transparency isn’t a value. However Neustar’s mission says “The nature of the functions entrusted to Neustar mandates that we operate fairly in the service of all communications industry stakeholders.” Just ask any customer who is leasing a short code if they feel that short codes are being operated fairly. Actually there have been a number of cases where the carriers shut down a short code because they didn’t like what the company who licensed the short code was about, or because the service infringed upon their business. Two that come to mind are Naral and Rebtel, respectively. Imagine Godaddy shutting down your domain name because they didn’t agree with your principles or they felt that you were competing with them? That is the danger of having the CTIA involved in the management of usshortcodes.com. If you are going to charge me $500 a month for a code that is impossible to remember, and I am not violating your terms like sending spam or porn, then at least let me use it how I want to use it.

I don’t know exactly how the short code ecosystem works. Is it one person, or different departments at different organizations that are responsible, and if how, do they manage the different pieces of the business? I know Neustar provides the technology to make short codes happen, as they are a huge web infrastructure company, but I don’t understand the hierarchy. I could be wrong about a few things as far as accountability, responsibility and technology goes. It’s unclear who we can come to with our issues. However this isn’t the first time I have argued the short code management topic and I have never received a response. I have been very vocal about bringing change for years writing articles about it here, here, here and here. I even shot a video rant on FunnyOrDie.com years ago. I am very glad to see that freedom of speech in this great country of ours still provides safety. No short code mafia has paid us a visit. No additional audits have been performed other than what we normally get (which is still too much), and nobody has sent me a letter asking me to cease and desist.

Let me leave the readers of this article with one final statement.

I want to thank the people behind short codes for creating them and I want to thank the people managing short codes for working hard to keep short code marketing and messaging running. You created an industry that has been able to employ people and drive revenue, and for that we are grateful. Now, the people that have taken the technology and run with it to make it successful, are telling you the changes that need to take place in order for this industry to thrive. If these changes do not take place, another technology will appear much sooner and this revenue stream will dry up. Let’s work together to make things better. It starts with transparency and breaking bread. The ball is in your court.

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8 comments

  1. Brian

    The rental fee could be a little less expensive, but it is somewhat of a barrier to entry. I don't have much of an issue with that. The real problem is that you can't use it for three months and the constant audits are a PITA. The entire process screams old telco. It would be nice if it were run like a lean startup. Thanks for bringing the conversation into the open. Amazing that we haven't heard from the other side on this issue.

    1. Jared Reitzin

      It creates a barrier for sure but if it's holding back an entire river then I would rather not have the barrier. Its completely telco. If a lean start up ran the organization it would look a lot differently. I don't know what to say about a response. My email was probably forwarded all over the company, they are definitely listening, and we have even asked if they would like to write an counter article. Nothing..

  2. Derek Johnson

    The CTIA should have an "express" fee for short code provisioning… hahaha

    1. Jared Reitzin

      People would pay for sure!

  3. Jared Reitzin

    They could be managed better!

  4. Kelsey

    I don't think short codes are a scam either, esp since mobile just continues to grow.

  5. Greg Hickman

    Great post Jared. I agree with you and your posts have been inspiration for my recent post on MMW about Short Code Probation. Of course we don't want short codes to go away as they are a great way of communicating with customers and is powerful form of performance based marketing.

    Your 4 issues are spot on and something needs to change to keep SMS moving forward. So many people think SMS is "dying" or not sexy.

    1. It's not dying and is showing no sign of dying.
    2. Who said things need to be sexy to be effective? SMS is a workhorse and the foundation for mobile initiatives by the largest brands. These brands wouldn't be sending millions (in some cases billions) of messages a year.

    It works and it works well. If the industry can help address your 4 issues we'd be in a better position to take a step in the right direction.

    Thanks for sharing and continuing to speak up on this topic.

    1. Jared Reitzin

      Greg you make a good point. People discount you so quickly when you are talking about technology that was "so yesterday" or not sexy. But SMS is the lowest common denominator and and drives revenue and to me that is sexy. Like all technology their is a shelf life. I get asked all of the time what the shelf life is for a short code being used for marketing purposes (i.e. text in) and its hard to say but maybe another 5 years? That is still a long time. I still thinkSMS being delivered over a short code for utility purposes (like alerts and reminders) will be around for over a decade. Time will tell. Thanks for the comment.

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