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THE MOBILE MARKETING
VALUE 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?
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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
A view of the Business-to-Technology “Fit”
Content
&
Technology
Application
Providers
The
Brand
Handset OEM
Telecom operators
and their infrastructure
Creative
Agency
and/or
Media
Buyer/Seller
Aggregator
Source: Adapted from Informa Telecoms & Media
The most “contentious”
element?
The
Consumer
Or
Target
Market
Link 1: The Brand
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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
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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
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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
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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:
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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”
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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:
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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
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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...
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What is the correlation to Pakistan’s handset market?
What are the recent changes that have taken place in our local market re OperatorOEM 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
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Mobilink launches HTC with Windows Mobile 7 + HTC Radar
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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
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Target market....?
8MB free GPRS access/month for first 6 month
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IMPACT ON VALUE CHAIN.....??
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Link 4: OEM – Local Consumer Preferences
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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:
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56% of mobiles sold here are Nokia handsets
29% are Chinese
Samsung handsets account for approx 11%
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AGAIN: IMPACT ON VALUE CHAIN.....??
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Link 5: The Telecom Operator/Infrastructure
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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:
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Bit-pipe approach: focus on providing access only – this is their home turf
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Enabler/smart-pipe approach: an intermediate position providing access plus wholesale
services to 3rd party players who wish to sell mobile multi media services
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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”
Publisher
1. Person to Person
2. Alerts
3. Bulk Messages
4. Info Services (news, music,
sports)
rd
5. 3 Party Services
Property Provider
Carrier
1. Customer base access
2. Leads
3. Profiling capability
4. Tracking Info
SMS
Handset
MMS
Applications
Mobile Advertising
Properties
USSD
Call
Mobile
Internet
SMS – Short Message Service
MMS – Multimedia Message Service
IVR – Interactive Voice Response
USSD – Unstructured Service Supplementary Data
IVR
Link 6: The Consumer/Target Audience
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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
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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!!