Rise Mobile Marketing
Content
Perspective
Roman Friedrich
Florian Gröne
Klaus Hölbling
Michael Peterson
The Rise of
Mobile Marketing
New Opportunities
for Consumer
Companies and
Mobile Operators
Contact Information
Berlin
Florian Gröne
Senior Associate
+49-30-88705-844
[email protected]
Düsseldorf
Roman Friedrich
Partner
+49-211-3890-165
[email protected]
Munich
Michael Peterson
Partner
+49-89-54525-640
[email protected]
Vienna
Klaus Hölbling
Partner
+43-1-518-22-907
[email protected]
Booz & Company
EXECUTIVE
SUMMARY
Booz & Company
The mobile channel offers an exciting opportunity for
marketers—one that most have yet to fully embrace. One
avenue to pursue is the creation of a branded mobile offering,
in which the marketer creates a portal dedicated to its product,
service, or brand. With constant access to each customer,
branded mobile portals can build interactive relationships by
identifying consumers not only in terms of personal identity,
but also in terms of commercial behavior, geographic location,
and social and communication patterns. When consumers
sign up for a branded mobile channel, they get access to
a variety of distinct offerings that can include exclusive
content as well as applications, games, special opportunities,
incentives, and emotional experiences—all of which reinforce
the value of the sponsoring brand far beyond its standard
uses. The rewards for companies that capitalize on these
possibilities—deeper engagement with consumers, increased
brand loyalty, and enhanced customer lifetime value—are not
to be missed.
1
A Powerful
New Platform
Of all the opportunities for marketing made available by new media,
the mobile platform perhaps holds
the most potential. Indeed, the use of
mobile devices represents an unprecedented and unparalleled shift in how
consumers use media. But the mobile
channel’s growth as a marketing and
advertising vehicle has been so fast that
some of the world’s most sophisticated
marketers have yet to determine how
to fully embrace it—not for lack of
desire, but for lack of experience.
New business models for mobile marketing are turning the mobile phone
into a marketer-exclusive platform.
Marketers can create mobile portals
dedicated to their business or brand
(giving their message exclusive airtime
with their best customers), a choice
of tailored handsets (to match the
brand), preloaded applications that
drive further contact with the brand,
and any number of other developing technologies that drive home the
exclusivity of the message.
Take the case of mobile phones
branded by Bild, the largest massmarket newspaper in Germany: The
mobile device belongs to the customer
to use in whatever way he or she
chooses. But everything about it—
from the message on the screen to the
games and gimmicks on the portal to
the no-frills rate plan—says “Bild” in
a loud (but consumer-friendly) voice.
The technology chain is relatively
simple: A company offering services
or products contracts with a mobileservice provider to create a mobile
brand. The mobile brand speaks to
customers—loyal users who identify
with the sponsor, as well as new
audiences drawn by the simple value
proposition of better service at a
lower price. The result? More powerful customer relationships and new
revenue streams.
A European football team connects
with its most ardent supporters via a
mobile service that provides not just
player information and game statistics but also the chance to purchase
tickets, T-shirts, and memorabilia.
A discount convenience store reinforces its image as a place for quick,
inexpensive service with a branded
low-cost mobile offering. Customers
who want to buy more minutes can
just stop by the store—where they
might be drawn in by, say, the store’s
new cereal promotion (communicated
via text message, of course). Although
most U.S. marketers have been slow
to respond to the mobile challenge,
the Polo Ralph Lauren Corporation—
that most American of retailers—is
giving tech-smart fashionistas the
chance to shop by phone. It can talk
directly with its best customers over
its own dedicated (and branded)
mobile service.
The result? More powerful
customer relationships
and new revenue streams.
2
Booz & Company
Reaching
the Segment
of One
For marketing managers, the omnipresence of ever more personalized
digital media means that consumers
are better informed, more demanding, and more focused on individual
needs than ever before. In trying to
reach this “segment of one,” marketers find that traditional metrics like
gross reach pale in comparison with
such informed measures as digital
net reach and cost per transaction.
Mobile channels, in particular, allow
game-changing marketing plays that
address individual customer needs
and interests. And, by doing so, they
also maximize net reach impact.
In its potential to shape and monetize
the customer relationship, there are
five ways in which mobile outperforms all other marketing channels
and platforms (see Exhibit 1, page 4).
• C
ustomer Access: The mobile
channel provides virtually
continuous access to consumers
via voice, messaging, or portal
platforms. The Internet has an
Booz & Company
access advantage over other
channels, but it is not exclusive or
entirely transportable. Mobile is
exclusively available to the primary
users—not just in fixed locations,
but wherever they go.
• C
ustomer Insight: The mobile
channel gives companies access
to a wide range of consumer
data, including demographics,
communication and social patterns,
and—with consumer consent—even
geographic movement patterns,
thanks to GPS or network
cell information. Once mobile
commerce gains traction—and it
is only a matter of time before it
does—businesses can add shopping
history, online store preferences,
and spending patterns to the list.
• C
ustomer Dialogue: Although
mobile channels do not offer
the multimedia home theater
experience that many PCs
provide (and mobile channels
will obviously never match screen
3
size), their content-rich, real-time
visual and acoustic platform can be
uniquely tailored to an individual
consumer. Families, co-workers,
and friends share computer use.
The mobile phone is a distinctly
personal device that reflects the use
and interests of its primary user.
And like the Internet, the mobile
phone is truly interactive, allowing
consumers to respond by click,
voice, text, or multimedia message.
• Customer Emotions: A consumer’s
choice of a mobile device often is
a strong lifestyle statement. (Just
ask the thousands of people who
have stood in line to buy the next
generation of iPhones.) Because
of that emotional statement, users
are highly attached to their mobile
devices as not only essential tools
but familiar parts of their everyday
lives. Because the mobile channel
enjoys a universal always-on
presence in people’s lives, it is a
powerful platform for advocates,
Exhibit 1:
Major Channels’ Potential to Reach Customers
I. Access
Mobile
TV, Radio,
Print
V. Transactions
II. Insight
Catalogue,
Direct Mail
PC-based
Internet
Retail
IV. Emotions
III. Dialogue
Source: Booz & Company
4
Booz & Company
believers, and supporters of a
certain topic, product, brand, or
way of life. In short, people get
excited about their mobile phones
in a way they never do about the
PC or the TV.
• C
ustomer Transactions: There
are few physical boundaries for
mobile devices. And that mobility
means that direct click-through,
e-commerce applications, or mobile
payment solutions are easily
available to consumers no matter
where they are. In markets such as
Korea and Japan, customers can
purchase goods from the windows
of a store that closed to foot traffic
hours earlier; the same may soon
be true in Europe and the United
States. If travelers are late for a
flight, they can make up time by
checking in from a cab on the way
to the airport. And merchants can
respond to consumer interest in
an e-commerce venue by instantly
updating prices or pushing new
offers.
These five dimensions of the mobile
customer’s relationship provide
a distinct context for marketers
who must present a unique value
proposition to connect with their
customers. In highly competitive
markets, in particular, consumers are
becoming accustomed to end-to-end
brand experiences that stretch across
the physical and digital world.
Mobile channels, with 24/7 access
to a unique consumer, can build
interactive relationships by identifying customers not only in terms of
personal identity, but also in terms
of commercial behavior, geographic
location, and social and communication patterns. Most important, interaction within the business or social
environment can occur immediately
through the multimedia capabilities of
a mobile phone.
By creating a relevant user experience,
mobile devices give consumers more
of what they want while providing
marketers with a powerful platform
for multitiered, next-generation
marketing campaigns. Because it can
literally put a product or service in a
prime prospect’s hands, the mobile
platform is a channel that can immediately enhance a brand’s value. It
adds immediacy, relevance, timeliness,
access, and unique customer insight.
And, with those advantages, it offers
marketers new opportunities to boost
(and measure) their return on marketing investments.
In highly competitive markets, consumers
are accustomed to brand experiences that
stretch across the physical and digital world.
Booz & Company
5
The
Parameters
of Mobile
Branding
Depending on how they want to reach
their customers and on their strategic
objectives and positioning, marketers
can use branded mobile offerings in
a number of ways to generate value,
first for consumers and ultimately for
the bottom line.
It is important to remember that
there is no one-size-fits-all formula
for mobile platforms. Each product
or service has specific brand-building
needs that will shape the nature of
its mobile offering. And the deep
toolbox available allows marketers to
pick and choose what best suits their
short- and long-term objectives.
In its most basic form, a branded
mobile play would look to do little
more than reinforce brand recognition with classic push advertising
and enhanced brand visibility. Such
a program would give a prequalified
audience easy access to special offers
and promotions via e-mail, portal,
and SMS/MMS tools. Although revenue sharing—new income driven by
incremental network traffic, mobile
usage, and data downloads—is an
easily quantifiable asset of a basic
channel, revenue diversification in
itself is not a compelling reason to
move into mobile media.
Consumer insight and engagement are
the hallmarks of an advanced tier of
mobile models. By creating a multimedia user experience targeted to
subscribers’ specific needs or interests, this next-generation platform
generates business value in a number
of ways. For instance, marketers can
cross-sell or up-sell their products
and services using customized content
offered by online media and mobile
applications. Such incentives encourage customers to accrue usage-based
points that they can redeem for
brand-related products or services.
6
Or marketers might use the digital
channel to respond to loyal customers’ behavior patterns with rewards
triggered by certain behaviors: “Spend
45 minutes browsing stock information on our financial-services mobile
channel and receive a discounted
stock trade offer.”
Brand-centric content and interactive
applications can build brand loyalty
with videos and product demonstrations, as well as through games and
competitions. Such easily accessible
content can also manage desired
channel migration to lower-cost offerings: “Purchase your airline tickets
through our branded travel mobile
offering and check in with discounts,
free calls, or loyalty points.”
Master-class mobile models fully tap
into the platform’s potential by using
digital channels to build interactive,
collaborative customer programs
that enable transactions. Think of a
branded credit card with an interactive communications device attached
and you can begin to imagine the possibilities inherent in product and service transactions enabled via mobile
devices. Collaborative programs—user
forums, user-generated content, mobile
focus groups, and digital beta testing,
to name a few—further increase the
relevance of the content. For superior
credibility, master-class platforms can
offer such location-based mobile services as region-specific content, sightseeing or shopping guides, and even
train connections that leave from the
customer’s current location in the next
hour. From a business-management
perspective, these platforms can call
on subscribers with real-time queries:
“Call or text us free to tell us what
you think of our new gizmo.” Such
collaborative approaches to product
development can cut the costs—and
turnaround time—of innovation.
Booz & Company
Cutting-Edge
Mobile
Opportunities
In a previous generation of media
consumption, one of the most difficult challenges was moving readers
from one daily newspaper to another.
Habit—not quality or relevance of
content—was the key reason for consumer loyalty. And so it is in this new
generation: An offering has to be convincingly superior to make customers
change familiar habits. To persuade
a customer to move to a branded
mobile service, a marketer must find
positive answers to a number of
daunting questions, each of which
invites more specific considerations:
Does the branded mobile channel
create genuine value for the brand’s
consumers?
• What can the branded mobile
channel add to the customer
experience that existing marketing
channels cannot?
• Is there a robust pipeline of ideas to
tailor enough content, applications,
games, tools, campaigns, and promotions to keep the user interested?
Does the mobile channel align with
the brand’s core values?
• Can we rule out potential damage
to the brand, such as misaligned
mobile and offline offerings,
insufficient network quality,
and inadequate data-delivery
connections?
• Can the mobile offering be tailored
well enough so that it becomes
aligned with core brand values,
on the one hand, and customer
expectations, on the other?
• Will the service be aimed at the
mass market or exclusive? Or will
it draw on both options, offering
An offering has to be
convincingly superior to make
customers change familiar habits.
Booz & Company
7
discount pricing that still provides
exclusive brand or content messages
to generate consumer insight?
and avoid the potential brand
damage of a less-than-satisfying
mobile experience?
• Will the pricing program reinforce
the overall perception of the brand?
Is the business capable of providing a
branded mobile service?
What is the economic significance of
the branded mobile channel?
• Can the organization deliver the
required content and applications to
implement and support the branded
channel?
•C
an the program reach sufficient
scale to realize the expected benefits?
•W
ill the branded experience be
strong enough to get word-of-mouth
and viral community endorsement
• Can the organization deliver
effectively? Can it keep the pipeline
filled with viable, engaging content,
campaigns, and promotions?
• Are there realistic options for
outsourcing noncore activities and
complementing in-house resources?
It is essential for any enterprise to carefully evaluate its responses to this full
list of questions; however, the business
(or brand) best suited for a mobile channel typically is characterized by a strong
presence in its customers’ everyday lives;
a brand or product to which customers
have an intense emotional attachment
and for which there is a solid network
of consumer advocates; and a customer base whose loyalty is grounded
in a deep sense of community.
Is the business capable of providing
a branded mobile service?
8
Booz & Company
The Feasibility
of Mobile
Marketers have any number of
reasons to be reluctant to break with
tradition and jump on the mobile
bandwagon. Marketers are not technologists. And, as a subset of communication technology, mobile services
is not a field in which anyone expects
marketers to be specialists. Until
recently, a branded mobile offering
required marketers to spend a good
share of their time and money devising ways to run back-end processes—
such as portal platforms, billing
systems, and digital customer-care
procedures—which often led to failure and frustration.
The good news is that building a
branded mobile offering no longer
requires a major up-front investment.
Marketers can provide the brand and
content, and a service provider can do
the rest of the work.
The business models for delivering
mobile services have evolved over the
last five years or so, most quickly in
Asia, followed by Europe and then
the United States. What began as an
investment-heavy model dominated
by a few integrated players is now
a more open, dynamic market with
specialists at virtually every step of
the value chain managing different
aspects of technology and audience
development.
The first wave of value chain dis-integration introduced new players that
used excess network capacity from
mobile network operators (MNOs)
as a platform for virtual players
(mobile virtual network operators, or
MVNOs), whose primary focus was
delivering no-frills, low-cost telephony
Booz & Company
services in increasingly competitive
markets. At that early stage of development, differentiation of consumer
experience was minimal or nonexistent. As we described above, its
“basic” purpose was to put the brand
in front of the customer in a passive
(but friendly and favorable) manner.
Today’s mobile service player landscape is very different. The vertical
dis-integration of the mobile value
chain and the increasing commoditization of network services translate
into far more differentiation than
MVNOs were able to provide even
just a few years ago (see Exhibit 2,
page 10).
What does this mean for marketers?
For starters, they can relax: Becoming
a mobile player is no longer too risky
or expensive. They do not need to go
out and buy a whole new set of tools;
there are partners eager to provide
reasonably priced services at every
stage of the new value chain.
More specifically, mobile plays no
longer require businesses to become
network operators, virtual or
otherwise. Entry barriers have been
lowered across the board: Capital
expenditures are close to zero,
and economically viable services
allow brand sponsors to efficiently
approach smaller target groups.
The new service provider ecosystem
allows marketers to take a calmer, less
expensive launch-and-learn approach
to mastering mobile channels.
The presence of a rich variety of
service providers opens the customerfacing end of the value chain to a
9
broad range of players. Concerned
about mobile network infrastructure,
handset design and configuration,
portals, application development,
back-end processes, content
management, and preconfigured
advertising campaigns? Outsource
it all or pick the pieces you want to
control directly. With next-generation
mobile platform development,
marketers have complete flexibility
in deciding how much or how little
they want to be involved in the more
upstream aspects of the mobile play.
And that allows them to go back
to basics and do what they do best:
embrace the customer, in this case
with a unique mobile offering.
The upswing in mobile is just
beginning, even in the world’s most
technologically savvy markets. The
blogosphere is buzzing with rumors
of branded mobile services sponsored
by the likes of social networkers
Facebook, LinkedIn, MySpace,
studiVZ, and XING. And, from a
more traditional perspective, the
barriers to entry are low for any
brand-driven business across luxury
niches or broader mass-consumer
segments—media and entertainment;
fashion; retail; membership-driven
organizations, including sports or
charities; financial services; travel and
leisure; even automotive.
Exhibit 2:
The Evolution of Mobile Operators’ Business Models
Equipment
& Device
Manufacturing
Network
Operation
Enabling
Technology
Application
Application
Development Service
Provision
& Hosting
Content
Development
Original
Equipment
Manufacturer
Customer
Care
& Billing
Sales
& Marketing
Customer
Proposition
& Branding
Portal
Service
Mobile Network Operators
The Old Days
1990–2004
Resellers
• Increasing Customer
Segmentation
• Increasing Differentiation
of Offerings
Mobile Virtual Network Operators
Virtualization
2004–2007
Channel Enablers
• Mobile Virtual Network Enablers
• Application Developers
• Managed Service System Providers
• Multimedia and Advertising Agencies
Branded
Mobile Channel
• Increasing Specialization
Along Value Chain
• Decreasing Entry
Barriers and
Capital Expenditure
Requirements
Brand-centricity
2007–
Source: Booz & Company
10
Booz & Company
The Time
Has Come
Consumers have long recognized the
convenience and comfort of mobile
devices. And, at last, the barriers that
limited mobile consumer experiences
have been removed.
Most particularly, they want the
access that mobile devices provide to
seamless customer experiences that
can link them to other parts of their
offline and online lives.
A feature-rich generation of attractive mobile devices like the iPhone
(with touchscreen commands, crisp
displays, and intuitive entry modes),
BlackBerry, and others has arrived,
and the devices now commonly
include GPS navigation, MP3 players,
cameras, and various other multimedia features. High-speed connectivity, including broadband and 3G, is
widely available to the vast majority
of people in developed markets.
Finally, branded mobile channels
now offer marketers in consumerfocused businesses a rich tool with
significant potential to build brands
and generate value. For the first time
in the history of the mobile channel,
entry barriers have been lowered
sufficiently to make branded mobile
plays not only conceptually attractive
but economically feasible.
As usage-based tariffs are replaced
by attractive flat rates, regulators
are also cracking down on roaming
and termination fees. And cost has
disappeared as a major roadblock for
data-rich multimedia services.
Further, as a social driver in the
move to mobile services, the broad
acceptance of the medium across
regions and cultures demonstrates
that the devices have become lifestyle
icons that consumers decidedly want.
Booz & Company
With the elimination of financial
and economic barriers, marketers
finally have the chance to leverage the
new business model and address the
opportunities of mobile marketing:
real-time access to customers, deep
insights into consumer behavior, and
value generation for customers. The
rewards for those who capitalize on
these opportunities—deeper engagement with consumers, increased
brand loyalty, and enhanced customer
lifetime value—not only are clear, but
are not to be missed.
11
Mobile Manual: A Six-Point Checklist for Marketers
Although each branded mobile offering has its own characteristics, any marketer
interested in the medium needs to address six steps for a successful program.
Develop a pipeline of content that can bring the channel to life and keep its
buzz going: Recycled offline offerings usually do not work. The mobile offering
demands a pipeline of tailored, differentiated, exclusive components. A small
team needs to focus on ongoing marketing execution (digital marketing, nextgeneration campaign management) and third-party management.
Design customized content that reinforces the core brand values and engages
targeted customers: To avoid damaging the brand (and losing customers), there
must be alignment among brand, customer characteristics, and the mobile
proposition. To differentiate a marketer’s product from a spate of discount offerings, brand and mobile offerings should match up in terms of the device’s
design and features and the pricing model—including whether it is low-cost or
premium, delivered for a flat fee or subsidized by advertising.
Review the business case and verify value-added components and benefits:
Examine customer loyalty levels, user uptake, penetration, growth projections,
targets, critical scale and break-even points, and possible cannibalization or
cross-fertilization of the non-mobile business. Outsourcing operations can minimize investment as well as financial and operational risk.
Align the configuration of the mobile service value chain with core business capabilities: Define the proper level of outsourcing in noncore activities (infrastructure
operations, business support services, portal management) and focus on delivery capacity in core value-added activities (marketing, content development,
campaigns, advertising). Support the integration of the mobile offering with such
customized applications as unique messaging tools.
Pick a service provider whose offerings match your brand’s needs: The service
provider can make or break the user experience. For content-rich interactive
offerings, one of the critical issues is access—not just capacity but also control,
security, customer data integrity, privacy, property rights, content control, and the
reliability of content partners.
Launch branded mobile offerings with an orchestrated, high-impact program:
Compelling content and applications can make a powerful impression from Day
One. Test before you launch. Optimize events with special sales, promotions,
and quick trial-and-error programs that invite engagement. Orchestrate messages across other channels, including traditional broadcast outlets; proactively
stimulate mobile uptake by promoting special mobile content or offers via nonmobile channels.
12
Booz & Company
Resources
Olaf Acker, Florian Gröne, and Klaus Hölbling, “Beyond the
Mass Mailing,” Booz & Company, March 2008: www.booz.com/
global/home/what_we_think/reports_and_white_papers/icdisplay/41901862
Christopher Vollmer, Always On: Advertising, Marketing,
and Media in an Era of Consumer Control, McGraw-Hill, 2008:
www.businessfuture.com/fbs/alwayson/26655293
About the Authors
Roman Friedrich is a partner
with Booz & Company based
in Düsseldorf and is the head
of the European communications, media, and technology
practice. He focuses on the
strategic transformation of leading telecom organizations in
the European mobile, fixed-line,
and Internet markets.
Florian Gröne is a senior associate with Booz & Company in
Berlin. He focuses on improving
operating models and developing technology capabilities in
marketing, sales, and customer
service for telecom organizations
and other IT-driven businesses.
Booz & Company
Klaus Hölbling is a partner with
Booz & Company in Vienna. He
specializes in marketing, sales,
and customer service capabilities for the telecom, high-tech,
and transportation industries.
Michael Peterson is a partner
with Booz & Company in
Munich. He specializes in strategy development, particularly
in marketing, sales, and other
customer-facing activities, for
communications and technology companies.
13
The most recent list of
our office addresses and
telephone numbers can
be found on our website,
www.booz.com
Worldwide
Offices
Asia
Beijing
Hong Kong
Mumbai
Seoul
Shanghai
Taipei
Tokyo
Australia,
New Zealand &
Southeast Asia
Adelaide
Auckland
Bangkok
Brisbane
Canberra
Jakarta
Kuala Lumpur
Melbourne
Sydney
Europe
Amsterdam
Berlin
Copenhagen
Dublin
Düsseldorf
Frankfurt
Helsinki
London
Booz & Company is a leading global management
consulting firm, helping the world’s top businesses,
governments, and organizations.
Our founder, Edwin Booz, defined the profession
when he established the first management consulting
firm in 1914.
Today, with more than 3,300 people in 58 offices
around the world, we bring foresight and knowledge,
deep functional expertise, and a practical approach
to building capabilities and delivering real impact.
We work closely with our clients to create and deliver
essential advantage.
For our management magazine strategy+business,
visit www.strategy-business.com.
Visit www.booz.com to learn more about
Booz & Company.
Printed in USA
©2008 Booz & Company Inc.
Madrid
Milan
Moscow
Munich
Oslo
Paris
Rome
Stockholm
Stuttgart
Vienna
Warsaw
Zurich
Middle East
Abu Dhabi
Beirut
Cairo
Dubai
Riyadh
North America
Atlanta
Chicago
Cleveland
Dallas
Detroit
Florham Park
Houston
Los Angeles
McLean
Mexico City
New York City
Parsippany
San Francisco
South America
Buenos Aires
Rio de Janeiro
Santiago
São Paulo
Roman Friedrich
Florian Gröne
Klaus Hölbling
Michael Peterson
The Rise of
Mobile Marketing
New Opportunities
for Consumer
Companies and
Mobile Operators
Contact Information
Berlin
Florian Gröne
Senior Associate
+49-30-88705-844
[email protected]
Düsseldorf
Roman Friedrich
Partner
+49-211-3890-165
[email protected]
Munich
Michael Peterson
Partner
+49-89-54525-640
[email protected]
Vienna
Klaus Hölbling
Partner
+43-1-518-22-907
[email protected]
Booz & Company
EXECUTIVE
SUMMARY
Booz & Company
The mobile channel offers an exciting opportunity for
marketers—one that most have yet to fully embrace. One
avenue to pursue is the creation of a branded mobile offering,
in which the marketer creates a portal dedicated to its product,
service, or brand. With constant access to each customer,
branded mobile portals can build interactive relationships by
identifying consumers not only in terms of personal identity,
but also in terms of commercial behavior, geographic location,
and social and communication patterns. When consumers
sign up for a branded mobile channel, they get access to
a variety of distinct offerings that can include exclusive
content as well as applications, games, special opportunities,
incentives, and emotional experiences—all of which reinforce
the value of the sponsoring brand far beyond its standard
uses. The rewards for companies that capitalize on these
possibilities—deeper engagement with consumers, increased
brand loyalty, and enhanced customer lifetime value—are not
to be missed.
1
A Powerful
New Platform
Of all the opportunities for marketing made available by new media,
the mobile platform perhaps holds
the most potential. Indeed, the use of
mobile devices represents an unprecedented and unparalleled shift in how
consumers use media. But the mobile
channel’s growth as a marketing and
advertising vehicle has been so fast that
some of the world’s most sophisticated
marketers have yet to determine how
to fully embrace it—not for lack of
desire, but for lack of experience.
New business models for mobile marketing are turning the mobile phone
into a marketer-exclusive platform.
Marketers can create mobile portals
dedicated to their business or brand
(giving their message exclusive airtime
with their best customers), a choice
of tailored handsets (to match the
brand), preloaded applications that
drive further contact with the brand,
and any number of other developing technologies that drive home the
exclusivity of the message.
Take the case of mobile phones
branded by Bild, the largest massmarket newspaper in Germany: The
mobile device belongs to the customer
to use in whatever way he or she
chooses. But everything about it—
from the message on the screen to the
games and gimmicks on the portal to
the no-frills rate plan—says “Bild” in
a loud (but consumer-friendly) voice.
The technology chain is relatively
simple: A company offering services
or products contracts with a mobileservice provider to create a mobile
brand. The mobile brand speaks to
customers—loyal users who identify
with the sponsor, as well as new
audiences drawn by the simple value
proposition of better service at a
lower price. The result? More powerful customer relationships and new
revenue streams.
A European football team connects
with its most ardent supporters via a
mobile service that provides not just
player information and game statistics but also the chance to purchase
tickets, T-shirts, and memorabilia.
A discount convenience store reinforces its image as a place for quick,
inexpensive service with a branded
low-cost mobile offering. Customers
who want to buy more minutes can
just stop by the store—where they
might be drawn in by, say, the store’s
new cereal promotion (communicated
via text message, of course). Although
most U.S. marketers have been slow
to respond to the mobile challenge,
the Polo Ralph Lauren Corporation—
that most American of retailers—is
giving tech-smart fashionistas the
chance to shop by phone. It can talk
directly with its best customers over
its own dedicated (and branded)
mobile service.
The result? More powerful
customer relationships
and new revenue streams.
2
Booz & Company
Reaching
the Segment
of One
For marketing managers, the omnipresence of ever more personalized
digital media means that consumers
are better informed, more demanding, and more focused on individual
needs than ever before. In trying to
reach this “segment of one,” marketers find that traditional metrics like
gross reach pale in comparison with
such informed measures as digital
net reach and cost per transaction.
Mobile channels, in particular, allow
game-changing marketing plays that
address individual customer needs
and interests. And, by doing so, they
also maximize net reach impact.
In its potential to shape and monetize
the customer relationship, there are
five ways in which mobile outperforms all other marketing channels
and platforms (see Exhibit 1, page 4).
• C
ustomer Access: The mobile
channel provides virtually
continuous access to consumers
via voice, messaging, or portal
platforms. The Internet has an
Booz & Company
access advantage over other
channels, but it is not exclusive or
entirely transportable. Mobile is
exclusively available to the primary
users—not just in fixed locations,
but wherever they go.
• C
ustomer Insight: The mobile
channel gives companies access
to a wide range of consumer
data, including demographics,
communication and social patterns,
and—with consumer consent—even
geographic movement patterns,
thanks to GPS or network
cell information. Once mobile
commerce gains traction—and it
is only a matter of time before it
does—businesses can add shopping
history, online store preferences,
and spending patterns to the list.
• C
ustomer Dialogue: Although
mobile channels do not offer
the multimedia home theater
experience that many PCs
provide (and mobile channels
will obviously never match screen
3
size), their content-rich, real-time
visual and acoustic platform can be
uniquely tailored to an individual
consumer. Families, co-workers,
and friends share computer use.
The mobile phone is a distinctly
personal device that reflects the use
and interests of its primary user.
And like the Internet, the mobile
phone is truly interactive, allowing
consumers to respond by click,
voice, text, or multimedia message.
• Customer Emotions: A consumer’s
choice of a mobile device often is
a strong lifestyle statement. (Just
ask the thousands of people who
have stood in line to buy the next
generation of iPhones.) Because
of that emotional statement, users
are highly attached to their mobile
devices as not only essential tools
but familiar parts of their everyday
lives. Because the mobile channel
enjoys a universal always-on
presence in people’s lives, it is a
powerful platform for advocates,
Exhibit 1:
Major Channels’ Potential to Reach Customers
I. Access
Mobile
TV, Radio,
V. Transactions
II. Insight
Catalogue,
Direct Mail
PC-based
Internet
Retail
IV. Emotions
III. Dialogue
Source: Booz & Company
4
Booz & Company
believers, and supporters of a
certain topic, product, brand, or
way of life. In short, people get
excited about their mobile phones
in a way they never do about the
PC or the TV.
• C
ustomer Transactions: There
are few physical boundaries for
mobile devices. And that mobility
means that direct click-through,
e-commerce applications, or mobile
payment solutions are easily
available to consumers no matter
where they are. In markets such as
Korea and Japan, customers can
purchase goods from the windows
of a store that closed to foot traffic
hours earlier; the same may soon
be true in Europe and the United
States. If travelers are late for a
flight, they can make up time by
checking in from a cab on the way
to the airport. And merchants can
respond to consumer interest in
an e-commerce venue by instantly
updating prices or pushing new
offers.
These five dimensions of the mobile
customer’s relationship provide
a distinct context for marketers
who must present a unique value
proposition to connect with their
customers. In highly competitive
markets, in particular, consumers are
becoming accustomed to end-to-end
brand experiences that stretch across
the physical and digital world.
Mobile channels, with 24/7 access
to a unique consumer, can build
interactive relationships by identifying customers not only in terms of
personal identity, but also in terms
of commercial behavior, geographic
location, and social and communication patterns. Most important, interaction within the business or social
environment can occur immediately
through the multimedia capabilities of
a mobile phone.
By creating a relevant user experience,
mobile devices give consumers more
of what they want while providing
marketers with a powerful platform
for multitiered, next-generation
marketing campaigns. Because it can
literally put a product or service in a
prime prospect’s hands, the mobile
platform is a channel that can immediately enhance a brand’s value. It
adds immediacy, relevance, timeliness,
access, and unique customer insight.
And, with those advantages, it offers
marketers new opportunities to boost
(and measure) their return on marketing investments.
In highly competitive markets, consumers
are accustomed to brand experiences that
stretch across the physical and digital world.
Booz & Company
5
The
Parameters
of Mobile
Branding
Depending on how they want to reach
their customers and on their strategic
objectives and positioning, marketers
can use branded mobile offerings in
a number of ways to generate value,
first for consumers and ultimately for
the bottom line.
It is important to remember that
there is no one-size-fits-all formula
for mobile platforms. Each product
or service has specific brand-building
needs that will shape the nature of
its mobile offering. And the deep
toolbox available allows marketers to
pick and choose what best suits their
short- and long-term objectives.
In its most basic form, a branded
mobile play would look to do little
more than reinforce brand recognition with classic push advertising
and enhanced brand visibility. Such
a program would give a prequalified
audience easy access to special offers
and promotions via e-mail, portal,
and SMS/MMS tools. Although revenue sharing—new income driven by
incremental network traffic, mobile
usage, and data downloads—is an
easily quantifiable asset of a basic
channel, revenue diversification in
itself is not a compelling reason to
move into mobile media.
Consumer insight and engagement are
the hallmarks of an advanced tier of
mobile models. By creating a multimedia user experience targeted to
subscribers’ specific needs or interests, this next-generation platform
generates business value in a number
of ways. For instance, marketers can
cross-sell or up-sell their products
and services using customized content
offered by online media and mobile
applications. Such incentives encourage customers to accrue usage-based
points that they can redeem for
brand-related products or services.
6
Or marketers might use the digital
channel to respond to loyal customers’ behavior patterns with rewards
triggered by certain behaviors: “Spend
45 minutes browsing stock information on our financial-services mobile
channel and receive a discounted
stock trade offer.”
Brand-centric content and interactive
applications can build brand loyalty
with videos and product demonstrations, as well as through games and
competitions. Such easily accessible
content can also manage desired
channel migration to lower-cost offerings: “Purchase your airline tickets
through our branded travel mobile
offering and check in with discounts,
free calls, or loyalty points.”
Master-class mobile models fully tap
into the platform’s potential by using
digital channels to build interactive,
collaborative customer programs
that enable transactions. Think of a
branded credit card with an interactive communications device attached
and you can begin to imagine the possibilities inherent in product and service transactions enabled via mobile
devices. Collaborative programs—user
forums, user-generated content, mobile
focus groups, and digital beta testing,
to name a few—further increase the
relevance of the content. For superior
credibility, master-class platforms can
offer such location-based mobile services as region-specific content, sightseeing or shopping guides, and even
train connections that leave from the
customer’s current location in the next
hour. From a business-management
perspective, these platforms can call
on subscribers with real-time queries:
“Call or text us free to tell us what
you think of our new gizmo.” Such
collaborative approaches to product
development can cut the costs—and
turnaround time—of innovation.
Booz & Company
Cutting-Edge
Mobile
Opportunities
In a previous generation of media
consumption, one of the most difficult challenges was moving readers
from one daily newspaper to another.
Habit—not quality or relevance of
content—was the key reason for consumer loyalty. And so it is in this new
generation: An offering has to be convincingly superior to make customers
change familiar habits. To persuade
a customer to move to a branded
mobile service, a marketer must find
positive answers to a number of
daunting questions, each of which
invites more specific considerations:
Does the branded mobile channel
create genuine value for the brand’s
consumers?
• What can the branded mobile
channel add to the customer
experience that existing marketing
channels cannot?
• Is there a robust pipeline of ideas to
tailor enough content, applications,
games, tools, campaigns, and promotions to keep the user interested?
Does the mobile channel align with
the brand’s core values?
• Can we rule out potential damage
to the brand, such as misaligned
mobile and offline offerings,
insufficient network quality,
and inadequate data-delivery
connections?
• Can the mobile offering be tailored
well enough so that it becomes
aligned with core brand values,
on the one hand, and customer
expectations, on the other?
• Will the service be aimed at the
mass market or exclusive? Or will
it draw on both options, offering
An offering has to be
convincingly superior to make
customers change familiar habits.
Booz & Company
7
discount pricing that still provides
exclusive brand or content messages
to generate consumer insight?
and avoid the potential brand
damage of a less-than-satisfying
mobile experience?
• Will the pricing program reinforce
the overall perception of the brand?
Is the business capable of providing a
branded mobile service?
What is the economic significance of
the branded mobile channel?
• Can the organization deliver the
required content and applications to
implement and support the branded
channel?
•C
an the program reach sufficient
scale to realize the expected benefits?
•W
ill the branded experience be
strong enough to get word-of-mouth
and viral community endorsement
• Can the organization deliver
effectively? Can it keep the pipeline
filled with viable, engaging content,
campaigns, and promotions?
• Are there realistic options for
outsourcing noncore activities and
complementing in-house resources?
It is essential for any enterprise to carefully evaluate its responses to this full
list of questions; however, the business
(or brand) best suited for a mobile channel typically is characterized by a strong
presence in its customers’ everyday lives;
a brand or product to which customers
have an intense emotional attachment
and for which there is a solid network
of consumer advocates; and a customer base whose loyalty is grounded
in a deep sense of community.
Is the business capable of providing
a branded mobile service?
8
Booz & Company
The Feasibility
of Mobile
Marketers have any number of
reasons to be reluctant to break with
tradition and jump on the mobile
bandwagon. Marketers are not technologists. And, as a subset of communication technology, mobile services
is not a field in which anyone expects
marketers to be specialists. Until
recently, a branded mobile offering
required marketers to spend a good
share of their time and money devising ways to run back-end processes—
such as portal platforms, billing
systems, and digital customer-care
procedures—which often led to failure and frustration.
The good news is that building a
branded mobile offering no longer
requires a major up-front investment.
Marketers can provide the brand and
content, and a service provider can do
the rest of the work.
The business models for delivering
mobile services have evolved over the
last five years or so, most quickly in
Asia, followed by Europe and then
the United States. What began as an
investment-heavy model dominated
by a few integrated players is now
a more open, dynamic market with
specialists at virtually every step of
the value chain managing different
aspects of technology and audience
development.
The first wave of value chain dis-integration introduced new players that
used excess network capacity from
mobile network operators (MNOs)
as a platform for virtual players
(mobile virtual network operators, or
MVNOs), whose primary focus was
delivering no-frills, low-cost telephony
Booz & Company
services in increasingly competitive
markets. At that early stage of development, differentiation of consumer
experience was minimal or nonexistent. As we described above, its
“basic” purpose was to put the brand
in front of the customer in a passive
(but friendly and favorable) manner.
Today’s mobile service player landscape is very different. The vertical
dis-integration of the mobile value
chain and the increasing commoditization of network services translate
into far more differentiation than
MVNOs were able to provide even
just a few years ago (see Exhibit 2,
page 10).
What does this mean for marketers?
For starters, they can relax: Becoming
a mobile player is no longer too risky
or expensive. They do not need to go
out and buy a whole new set of tools;
there are partners eager to provide
reasonably priced services at every
stage of the new value chain.
More specifically, mobile plays no
longer require businesses to become
network operators, virtual or
otherwise. Entry barriers have been
lowered across the board: Capital
expenditures are close to zero,
and economically viable services
allow brand sponsors to efficiently
approach smaller target groups.
The new service provider ecosystem
allows marketers to take a calmer, less
expensive launch-and-learn approach
to mastering mobile channels.
The presence of a rich variety of
service providers opens the customerfacing end of the value chain to a
9
broad range of players. Concerned
about mobile network infrastructure,
handset design and configuration,
portals, application development,
back-end processes, content
management, and preconfigured
advertising campaigns? Outsource
it all or pick the pieces you want to
control directly. With next-generation
mobile platform development,
marketers have complete flexibility
in deciding how much or how little
they want to be involved in the more
upstream aspects of the mobile play.
And that allows them to go back
to basics and do what they do best:
embrace the customer, in this case
with a unique mobile offering.
The upswing in mobile is just
beginning, even in the world’s most
technologically savvy markets. The
blogosphere is buzzing with rumors
of branded mobile services sponsored
by the likes of social networkers
Facebook, LinkedIn, MySpace,
studiVZ, and XING. And, from a
more traditional perspective, the
barriers to entry are low for any
brand-driven business across luxury
niches or broader mass-consumer
segments—media and entertainment;
fashion; retail; membership-driven
organizations, including sports or
charities; financial services; travel and
leisure; even automotive.
Exhibit 2:
The Evolution of Mobile Operators’ Business Models
Equipment
& Device
Manufacturing
Network
Operation
Enabling
Technology
Application
Application
Development Service
Provision
& Hosting
Content
Development
Original
Equipment
Manufacturer
Customer
Care
& Billing
Sales
& Marketing
Customer
Proposition
& Branding
Portal
Service
Mobile Network Operators
The Old Days
1990–2004
Resellers
• Increasing Customer
Segmentation
• Increasing Differentiation
of Offerings
Mobile Virtual Network Operators
Virtualization
2004–2007
Channel Enablers
• Mobile Virtual Network Enablers
• Application Developers
• Managed Service System Providers
• Multimedia and Advertising Agencies
Branded
Mobile Channel
• Increasing Specialization
Along Value Chain
• Decreasing Entry
Barriers and
Capital Expenditure
Requirements
Brand-centricity
2007–
Source: Booz & Company
10
Booz & Company
The Time
Has Come
Consumers have long recognized the
convenience and comfort of mobile
devices. And, at last, the barriers that
limited mobile consumer experiences
have been removed.
Most particularly, they want the
access that mobile devices provide to
seamless customer experiences that
can link them to other parts of their
offline and online lives.
A feature-rich generation of attractive mobile devices like the iPhone
(with touchscreen commands, crisp
displays, and intuitive entry modes),
BlackBerry, and others has arrived,
and the devices now commonly
include GPS navigation, MP3 players,
cameras, and various other multimedia features. High-speed connectivity, including broadband and 3G, is
widely available to the vast majority
of people in developed markets.
Finally, branded mobile channels
now offer marketers in consumerfocused businesses a rich tool with
significant potential to build brands
and generate value. For the first time
in the history of the mobile channel,
entry barriers have been lowered
sufficiently to make branded mobile
plays not only conceptually attractive
but economically feasible.
As usage-based tariffs are replaced
by attractive flat rates, regulators
are also cracking down on roaming
and termination fees. And cost has
disappeared as a major roadblock for
data-rich multimedia services.
Further, as a social driver in the
move to mobile services, the broad
acceptance of the medium across
regions and cultures demonstrates
that the devices have become lifestyle
icons that consumers decidedly want.
Booz & Company
With the elimination of financial
and economic barriers, marketers
finally have the chance to leverage the
new business model and address the
opportunities of mobile marketing:
real-time access to customers, deep
insights into consumer behavior, and
value generation for customers. The
rewards for those who capitalize on
these opportunities—deeper engagement with consumers, increased
brand loyalty, and enhanced customer
lifetime value—not only are clear, but
are not to be missed.
11
Mobile Manual: A Six-Point Checklist for Marketers
Although each branded mobile offering has its own characteristics, any marketer
interested in the medium needs to address six steps for a successful program.
Develop a pipeline of content that can bring the channel to life and keep its
buzz going: Recycled offline offerings usually do not work. The mobile offering
demands a pipeline of tailored, differentiated, exclusive components. A small
team needs to focus on ongoing marketing execution (digital marketing, nextgeneration campaign management) and third-party management.
Design customized content that reinforces the core brand values and engages
targeted customers: To avoid damaging the brand (and losing customers), there
must be alignment among brand, customer characteristics, and the mobile
proposition. To differentiate a marketer’s product from a spate of discount offerings, brand and mobile offerings should match up in terms of the device’s
design and features and the pricing model—including whether it is low-cost or
premium, delivered for a flat fee or subsidized by advertising.
Review the business case and verify value-added components and benefits:
Examine customer loyalty levels, user uptake, penetration, growth projections,
targets, critical scale and break-even points, and possible cannibalization or
cross-fertilization of the non-mobile business. Outsourcing operations can minimize investment as well as financial and operational risk.
Align the configuration of the mobile service value chain with core business capabilities: Define the proper level of outsourcing in noncore activities (infrastructure
operations, business support services, portal management) and focus on delivery capacity in core value-added activities (marketing, content development,
campaigns, advertising). Support the integration of the mobile offering with such
customized applications as unique messaging tools.
Pick a service provider whose offerings match your brand’s needs: The service
provider can make or break the user experience. For content-rich interactive
offerings, one of the critical issues is access—not just capacity but also control,
security, customer data integrity, privacy, property rights, content control, and the
reliability of content partners.
Launch branded mobile offerings with an orchestrated, high-impact program:
Compelling content and applications can make a powerful impression from Day
One. Test before you launch. Optimize events with special sales, promotions,
and quick trial-and-error programs that invite engagement. Orchestrate messages across other channels, including traditional broadcast outlets; proactively
stimulate mobile uptake by promoting special mobile content or offers via nonmobile channels.
12
Booz & Company
Resources
Olaf Acker, Florian Gröne, and Klaus Hölbling, “Beyond the
Mass Mailing,” Booz & Company, March 2008: www.booz.com/
global/home/what_we_think/reports_and_white_papers/icdisplay/41901862
Christopher Vollmer, Always On: Advertising, Marketing,
and Media in an Era of Consumer Control, McGraw-Hill, 2008:
www.businessfuture.com/fbs/alwayson/26655293
About the Authors
Roman Friedrich is a partner
with Booz & Company based
in Düsseldorf and is the head
of the European communications, media, and technology
practice. He focuses on the
strategic transformation of leading telecom organizations in
the European mobile, fixed-line,
and Internet markets.
Florian Gröne is a senior associate with Booz & Company in
Berlin. He focuses on improving
operating models and developing technology capabilities in
marketing, sales, and customer
service for telecom organizations
and other IT-driven businesses.
Booz & Company
Klaus Hölbling is a partner with
Booz & Company in Vienna. He
specializes in marketing, sales,
and customer service capabilities for the telecom, high-tech,
and transportation industries.
Michael Peterson is a partner
with Booz & Company in
Munich. He specializes in strategy development, particularly
in marketing, sales, and other
customer-facing activities, for
communications and technology companies.
13
The most recent list of
our office addresses and
telephone numbers can
be found on our website,
www.booz.com
Worldwide
Offices
Asia
Beijing
Hong Kong
Mumbai
Seoul
Shanghai
Taipei
Tokyo
Australia,
New Zealand &
Southeast Asia
Adelaide
Auckland
Bangkok
Brisbane
Canberra
Jakarta
Kuala Lumpur
Melbourne
Sydney
Europe
Amsterdam
Berlin
Copenhagen
Dublin
Düsseldorf
Frankfurt
Helsinki
London
Booz & Company is a leading global management
consulting firm, helping the world’s top businesses,
governments, and organizations.
Our founder, Edwin Booz, defined the profession
when he established the first management consulting
firm in 1914.
Today, with more than 3,300 people in 58 offices
around the world, we bring foresight and knowledge,
deep functional expertise, and a practical approach
to building capabilities and delivering real impact.
We work closely with our clients to create and deliver
essential advantage.
For our management magazine strategy+business,
visit www.strategy-business.com.
Visit www.booz.com to learn more about
Booz & Company.
Printed in USA
©2008 Booz & Company Inc.
Madrid
Milan
Moscow
Munich
Oslo
Paris
Rome
Stockholm
Stuttgart
Vienna
Warsaw
Zurich
Middle East
Abu Dhabi
Beirut
Cairo
Dubai
Riyadh
North America
Atlanta
Chicago
Cleveland
Dallas
Detroit
Florham Park
Houston
Los Angeles
McLean
Mexico City
New York City
Parsippany
San Francisco
South America
Buenos Aires
Rio de Janeiro
Santiago
São Paulo
