In the video above, Tatango CEO Derek Johnson answers the question, “How does an SMS aggregator make money?” Prefer to read instead? No problem, please see the post below. You can also find answers to all of your SMS marketing questions in our Q&A video library; click here to browse.
What Is an SMS Aggregator?
An SMS aggregator sits in between software providers, brands, developers, and wireless carriers (like AT&T, Verizon, etc.). SMS aggregators help simplify these relationships by building and maintaining all of the technical relationships with wireless carriers, and providing one point of contact to each SMS software provider. Through this process, SMS software providers like Tatango and the brands they support can send and receive short code messages on all the wireless carriers, through one contract and messaging connection.
How Does an SMS Aggregator Make Money?
SMS aggregators invest time and money into building connections with wireless carriers. Depending on the wireless carrier, the aggregators will be charged per message or a flat fee for access to send and receive messages via a direct line to the wireless carriers. Then, using their technical relationships, SMS aggregators charge brands, software providers, and developers for access to messaging on those wireless networks. The SMS aggregators generate a margin from the rate the wireless carriers charge them and the access they sell to software providers, developers, and brands.
Why Does a Software Provider or Developer Need to Use SMS Aggregators?
Without SMS aggregators, each brand, software provider, and developer would have to work with the wireless carriers directly. If each brand worked directly with the wireless carriers, it would cause a significant amount of work for each wireless carrier. As a result, it would require each business to have its own contract with each wireless carrier, which isn’t practical for the wireless carriers or brands. SMS aggregators simplify this process by managing the technical relationships with the wireless carriers and providing a single point of contact to each software provider, developer, or brand.
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