THE MOBILE MARKETINGVALUE CHAIN

Course Faculty: Mrs Yasmin Malik

Venue: IBA City/Main Campus, Karachi

Course Start Date: Spring 2011 (Feb 1)

MIS553: Mobile Marketing Strategies

What is the Mobile Marketing Value Chain?

There are 6 main links that make up the path that has to be crossed during the serving of a mobile ad to the end consumer

Together these 6 links make up the Mobile Marketing/Advertising Value Chain

Also known as the “Business-to-Technology Fit” view of mobile marketing

Depending on whether you have designed the ad, are placing the ad, are delivering the ad etc. you must be clear as to where you are in the chain

The Mobile Marketing Value Chain

TheBrand

The Consumer

Or TargetMarket

Source: Adapted from Informa Telecoms & Media

Content&

TechnologyApplicationProviders

CreativeAgencyand/orMedia

Buyer/SellerAggregator

Telecom operators and their infrastructure

A view of the Business-to-Technology “Fit”

The most “contentious” element?

Handset OEM

Link 1: The Brand

An established brand (as compared to less well known ones) is mainly focused on maintaining brand value and building brand loyalty

Do you know what a given brand’s “Brand Value” is? Brand Value =

a measure of the financial performance of a given brand as scrutinized by markets and shareholders

It includes a measure of the historical and future financial strength of the brand taking into account publicly listed financial data from stock exchanges and company financial reports

Usually quoted in US $ and ranked yearly according to value by brand consultancy firms such as Interbrand, Brand Finance etc. as well as leading business magazines such as Business Week/Newsweek

Building brand value and brand loyalty can be done very effectively with mobile marketing

Many international car manufacturers such as BMW have made a good entrance into a good number of mobile marketing projects

Other include Starbucks which have made use of mobile marketing coupons/barcodes used in a Mexico based customer loyalty campaign

Link 2: The Creative Agency/Media Aggregator

The Creative Agency will usually design and oversee the layout and features of the ad although not necessarily in-house

The Agency can be a specialized mobile marketing agency or a mainstream media creative agency

A Media Aggregator (aka the Media Agency) has links with different media entities including TV, print, radio, Internet and mobile channels (including telecom operators) for the buying and selling of ad space on various media

In some cases, a company can be both a creative agency and a media aggregator depending on its marketing position and the demands/terms of the campaign

Link 3: Content/Technology Application Provider In countries such as the US and UK where mobile marketing is a more

established marketing media, this link has carved a very definitive place for itself

Its strength lies in volume and diversity of applications/content Example of volumes: In Sept 2009, Apple announced that 85,000

applications had been developed for their App Store by over 125,000 developers

Blackberry, Android, Nokia and Microsoft (as of Feb 2011) all have app stores that deliver mobile applications for RIM OS, Android OS and Windows 7&8

Conversely, this link is very weak in the Pakistan environment due to the small number of companies that fall in this area and the relatively small number of apps/content made available in the market

Can you name some of them….? (Vectracom, Rockville, ARPU+ and AKN Mtech/M3 Technologies) Companies in this link can provide a platform for mobile marketing (e.g.

Admob), applications for mobile phones, design and deliver mobile banner ads, or design and deliver mobile portals/websites

Some of the content/technology providers have very strong links with the telecom operators in their local or international environment

Link 3: Local Content/Technology Application Providers Essentially a digital marketing

company covering Internet and social media but also the mobile platform

They source content from e.g. HungamaMobile, IndiaFM

Significantly, they also create local content for Internet and mobile

SMS/IVR campaigns include: Lux Bodywash, Sunsilk

Other significant mobile marketing campaigns:

Text “SURF” to short code to win credit balance (over 1.6 million participants)

Text to short code on Cornetto wrapper to enter competition to record a song with Jal the band

SMS riddles with Lipton to win credit balance which multiplies if passed on to “friends”

Jazz Bananas is “Pakistan's first ever operator powered mobile app store that offers thousands of free and paid apps along with other content for Symbian, Java and Android operating systems.”

Service is exclusively for Jazz, Jazba and Indigo customers

Ref: Aurora article on Jazz Bananas

With Jazz Bananas, you get: instant access to thousands of

your favorite games social networking download your favorite music get on-the-go news from around

the world weather updates sports news & travel info

Link 4: OEM

In the West, OEMs (Original Equipment Manufacturers) play a very significant role in the telecom industry and associated telecom/mobile delivery platform

For example, many mobile connections/contracts cannot be acquired unless you also select an associated handset

“Handset-to-Network” exclusive deals such as the iPhone may or may not hamper a mobile marketing campaign

In many instances, “The Brand” may be Nokia, Apple, Blackberry, Samsung or HTC

OEMs may place mobile ads for their own brand or control the type and number of ads that are placed on their handsets

Example: In April 2010 Apple announced the launch of “iAd” which is a mobile advertising platform to allow the iPhone to run ads on applications made by third parties

Similarly, now that Google owns Admob this opens up immense opportunity and devices for the placement of mobile ads on Android handsets such as the Droid and the HTC

If this is not the case, the OEM may still exercise its muscle by being the handset of choice for targeted mobile ads either in banner form or other form

Do not lose sight of the fact that coupled with the handset, the OS (Operating System) is equally important (see Worldwide OS Impact Chart iCrossing)

Impact on Mobile Marketing: Devices & Metrics OS Share

Source: metrics.admob.com

Link 4: OEM – The Local Scenario...

What is the correlation to Pakistan’s handset market? What are the recent changes that have taken place in our local market re

Operator-OEM partnerships….? New launch campaigns that incorporate OEM/mobile connection include: Ufone launched the Nokia N8

Exclusive points of sale for the N8 for first 6 months Mobile internet data bundles for 6 months

Mobilink launches HTC with Windows Mobile 7 + HTC Radar First Windows 7 phone in the Pakistan market – similarities to Mobilink’s introduction

of the Blackberry range....? 3 months free GPRS (mobile internet)

Zong introduces IDEOS with Android Target market....? 8MB free GPRS access/month for first 6 month

IMPACT ON VALUE CHAIN.....??

Link 4: OEM – Local Consumer Preferences

Imports of mobile phones rose 76% from 2009 to 2010 and were recorded at Rs. 26 billion approx (Source: Federal Bureau of Statistics)

Handset imports for approx Rs. 45 billion for 2010-2010 (Source: Federal Bureau of Statistics)

In 2010: Nokia leads the market with 500,000 units/month imported (Source: Karachi Electronics Dealers Association) despite headway made by other brands such as Samsung, LG, HTC and Q-mobile (Chinese brand)

Q-mobile and other Chinese handsets: 100,000 units/month imported Samsung handsets: 100,000 units/month imported LG: 50,000 units/month imported

Informal survey of Karachi’s Saddar mobile market (Source: Express Tribune, Feb 18, 2011) shows that: 56% of mobiles sold here are Nokia handsets 29% are Chinese Samsung handsets account for approx 11%

AGAIN: IMPACT ON VALUE CHAIN.....??

Link 5: The Telecom Operator/Infrastructure

I believe this is the most “contentious” link!!

As operators provide the physical network through which mobile ads can be both served and viewed, the dynamics of the Value Chain often centers around this link

Operators can hold three main positions in the mobile multimedia market:

Bit-pipe approach: focus on providing access only – this is their home turf

Enabler/smart-pipe approach: an intermediate position providing access plus wholesale services to 3rd party players who wish to sell mobile multi media services

Integrated/full fledged competitor: the other extreme in order to try and compete on the services and content fronts (in addition to access)

Which is the best approach?

.....We have seen a glimpse of this in the “Local Telco as Media Company” Example and we will look at these three main positions in more detail later on in the course...

LOCAL TELCO AS A “MEDIA COMPANY”

PublisherPublisher Property ProviderProperty Provider CarrierCarrier

1. Customer base access2. Leads3. Profiling capability4. Tracking Info

1. Person to Person2. Alerts3. Bulk Messages4. Info Services (news, music,

sports)5. 3rd Party Services

SMS – Short Message ServiceMMS – Multimedia Message ServiceIVR – Interactive Voice ResponseUSSD – Unstructured Service Supplementary Data

Link 6: The Consumer/Target Audience

This certainly should not be a case of a “blind SMS” campaign in huge numbers without any idea of who will be receiving your ad – care should be taken to avoid a “spam” campaign

In mobile marketing, the consumer should never be seen as part of a “numbers” campaign/game

“Opt-in” campaigns are much better as they help you to build up a good database of participants and can help in profiling them for future, more targeted mobile marketing campaigns

At times, targeting will need to be very specific

Working together with companies that can provide demographic and psychographic data is in many case advantageous if not essential

It is essential to not only target the consumer but also to track the consumer

All 6 Links

It is important to realize that in a practical working environment, you may represent any of the 6 links that we have discussed in the Value Chain

Mobile marketing should hence not be viewed as an exercise that is undertaken purely by “marketing agencies”

At any given time, market forces will impact and change the dynamics of the Value Chain

Your mobile marketing strategies – whether they are marketing or technology based – must be adapted accordingly

The success or failure of your strategy is dependent on how you interpret the dynamics of the Value Chain

DON’T LOSE SIGHT OF IT!!