BULK SMS: A BUSINESS ANALYSIS

PRESENTED BY:PRASHANT SAXENA

Y 2006 Y 2007 Y 2008 Y 2011

149.5 220 284

484

Number of Users (Millions)

Source - MobilePundit, IMRB, Isuppli

Y 2006 Y 2007

428684.8

A2P & P2A - Revenues (Crore)

25%

15%60%

Percentage in Profits

Aggregator/Developer Copyright owner Operator

Perceived Value - Perceived value of a VAS depends on perceived rather than the actual utility to the end user: BRAND ASSOCIATIONSPractical Value - Practical value is completely based on tangible benefits derived from the service: REVENUE SHARING

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BULK SMS USAGE AREAS

Messaging

Work Force Management

Mobile Commerce

Information Services

Entertainment

CRM

Mobile Marketing

Internet Portal Payment Facilitator Enterprise

Content Developer

Application Service Provider

Mobile Advertising

Mobile Portal Content Developer Content Provider Content

Aggregator

Terminal Vendor Gateway Provider

Network Vendor

Mobile Network Operator Service Provider Mobile Virtual

Network Operator

Buye

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BULK SMS INFLUENCE

FACTORS

SMS AD RELEVANCE

BRAND FAMILIARITY

CONTROL OVER OPT IN

CONDITIONSATTITUDE

TOWARDS SMS ADVERTISNG

MESSAGE PERSONALIZATIO

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MONETARY BENEFIT

KNOWLEDGE

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Message Success Factors:Content

PersonalizationConsumer Control

Media Success Factors:Device Technology

Transmission Process Product FitMedia Cost

Success Measure:Consumer AttentionConsumer Behavior

Cost Ratios

EFFECTIVE SMS MARKETING MODEL

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SOPERATOR CHALLENGE:

Operator focusing on subscriber acquisition with no incentive on

incentive to push bulk sms services

USER CHALLENGE:Operators & Partners not driving in

enough potential benefit understanding in user’s mind

CONTENT LOCALIZATION CHALLENGE:Operators haven’t done much to

customize the content according to consumer behavior

REVENUE CHALLENGE:The inappropriate partnership pie

results in a tussle for revenues earned with no profit sharing for consumer

DEVICE CHALLENGE:Providing features to aid adverts &

increase positive branding via Device supported SMS

CONSUMER BEHAVIOR PERSPECTIVE

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BEHAVIOR BELIEFS

ATTITUTDE TOWARDS

FOR BEHAVIOR

NORMATIVEBELIEF

SUBJECTIVE NORM

CONTROLBELIEFS

PERCEIVEDBEHAVIORAL

CONTROL

INTENTION BEHAVIOR

ACTUAL BEHAVIORAL

CONTROL

BEHAVIORAL BELIEFS STRENGTH FACTOR PROBABILITY OF OCCURANCE

Instant Connections & Updates 3 0.8

Spamming -5 0.9

Wrong Usage of Mobile numbers -4 0.6

Financial Incentives like offers, sale, etc 2 0.8

Social Money 4 0.9

Unnecessary Disturbance -3 0.6

TOTAL BEHAVIORAL ATTITUDE –

SUM OF PRODUCT OF STREGTH FACTORS & PROBABILTY OF OCCURANCE(3*0.8) + (-5*0.9) + (-4*0.6) + (2*0.8) + (4*0.9) + (-3*0.6) = -1.1 (Slightly Negative)

Source: Theory of Planned Behavior, ICEK AIZENScale Used: -5 to +5 Likert UnitC

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NORMATIVE BELIEFS STRENGTH FACTOR PROBABILITY OF OCCURANCE

Need to Stay connected (Maslow’s Hierarchy of

needs)4 0.7

Perceive Petty greed -2 0.9

Brand Affiliation 3 0.5

Employee- Organization Context 3 0.3

TOTAL SUBJECTIVE NORM –

SUM OF PRODUCT OF STREGTH FACTORS & PROBABILTY OF OCCURANCE(4*0.7) + (-2*0.9) + (3*0.5) + (3*0.3) = 3.4 (Moderately Positive)

Source: Theory of Planned Behavior, ICEK AIZENScale Used: -5 to +5 Likert Unit

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CONSUMER PREFERENCES WRT BULT SMS Rank

Possibility to withdraw at any time 1

The possibility to choose whether or not your personal data can be given to a third party 2

The frequency of the ads 3

The applicability of the same term of contract to the eventual third party 4

The time when you would receive ads 5

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Scenario Control opt-in conditions

SMS ad relevance

Brand familiarity Expected Obtained

1 High High High Accept enthusiastically Accept

2 High High Low Accept Accept reluctantly

3 High Low Low Refuse Refuse

4 High Low High Refuse Refuse

5 Low High High Accept reluctantly Refuse

6 Low Low High Refuse Refuse

7 Low High Low Accept reluctantly Refuse

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MARKET PLAYERS

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Core

Valu

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cep

tsVisionary Leadership

Futuristic Prospects

Valuing Partners

Customer- Driven Excellence

Corporate Memberships, SMS Surveys, User Generated Product

Ideas, etc

K-Capital, Hyderabad 10k Marathon, TiE-ISB Connect,

Online short film festival and VLSI International Conference

PhoneLinx Communications, Solix Technologies, Innova Health Systems Ltd, Netstart Technologies & Eastern Michigan University

Social Money – SMS & Video No SPAMMING

“Friends Network" onlyHighly Targeted & Profile Based

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MEMBER 1

MEMBER 2

MEMBER 3

MEMBER 1

MEMBER 2

MEMBER 3

BULK SMS PORTAL

TELECOM PROVIDERADVERTISER

SMS OR VIDEO

SERVICES

REVENUE SHARING PER SMS

SENDING SMS or UPLOADS – 10 P

RECEIVING SMS

or VIEWS – 10 P

“40% ACTIVE SMS USERSPAID BLOGS

5 – 10 sec & 40 Characters Ads2 Million Users & 28 min average time spend” – KALYAN

MANYAM

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Social Money Introduction – 20 Sept, 2007

User Revenue sharing program for Fropper?

1 2 3 4 5 6 7 80

0.51

1.52

2.53 Subscriber (Millions)

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Subscription Details

Updates

Mass & Targeted Advertising

Invited Advertising

Corporate Features • Free, Direct-to-Consumer Subscription service

Consumer Friendly • Simplicity of opt-in/opt-out puts User in Control

On - Time • Making SMS into a habit with its timed delivery

New Marketing Tactics • Platform for Mass and Targeted Advertising, and Permission MarketingM

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The vertical communities aren’t really driven by “add friends/scrap other/upload video” features, but are purely need based and information based groups.

Started by individuals who are passionate about certain topics, and can be termed mavens in their respective areas of interest --- Identification & Performance based Appraisal !!

Mobile communities represent the community platforms like yahoo groups . Self-forming, somewhat closed and revolves around specific topics. The only difference is that it’s delivered on an “always-on” device, i.e. mobile.

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FOCUSSED MODEL:Advertising has been spam over SMS. Gupshup guys plan to break this by serving targeted and contextual ads as a part of the SMS and claim no extra SMSes.

HIGHLY COMPETITIVE:The new website and UI would allow users to send SMSes for free using the Internet - and that means head-on fight with 160by2.com and way2sms.com.

SPAM CONTROL:In order to control the spam, smsgupshup mandates one to validate their own number, before they start sending SMSes.

GETTING LOCAL:Eg. TSKBreakingNews is run by auser based in Tinsukhia (Assam).He sends across local news (whichis not mentioned in TOI) to hissubscribers. The group already has164 users and growing every day.

UPDATES

Getting Feeds from blogs sent to mobile devices

More variety in groups - right now its one to many.

Importing contacts from other social networking sites / phonebook

Advanced controls like posting through chat, widgets to have sms group messages posted in blog

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PEOPLE GROUP – BULK SMS SUGGESTIONS

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Media

Consumer Attention

Consumer Intention

Consumer Behavior

Consumer Attitudes

Perceived

Peer Influence

ContentPersonalization

Consumer Control

Device TechnologyTransmission Process

Product FitMedia Cost

UsefulnessEase of Use

THE CORPORATE BULKSMS ADVERTSING MODEL – A PERSPECTIVE

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Types of Ads

Brand building

Types of Ads

Special Offers

Types of Ads

Timely Teasers

Types of Ads

Requests

Comp. and polls

Ad

Content

Short and to the point (28%)

Ad

Content

Funny and Entertaining (26%)

Ad

Content

Relevant to the target group (20%)

Ad

Content

Eye Catching (13%)

Informative about Prizes and Promotions (12%)

Source: P. Barwise, C. Strong, Permission-based mobile advertising, Journal of Interactive Marketing

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Source: R.T. Watson, et al., Electronic Commerce: The Strategic Perspective, Dryden, Fort Worth, TX, 2000.

Less intrusive than phone calls, recipients can read text messages at their leisure and choose when to respond.The service provider must consider the best time and message frequency for the target group and topic.

Mobile phones amplify two key arguments for electronic commerce, location independence and ubiquity. Consumers increasingly expect tailored and location-based services, thereby underlining the importance of personalized mobile marketing. Properly applied, location-based services can create or reinforce virtual communities.

Personalizing messages increases the impact. Similar to traditional media, a personalized SMS campaign relies upon databases with enough active and potential clients to reach the target group profitably. The databases regularly contain personal information such as leisure activities, holidays, music and media interests, type of Internet access, occupation, marital status, car ownership and income

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Source: CNN, New Switching Rules May Trash Millions of Cell Phones, Cable Network News (October 31), 2003.

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• Gathering Data Required For Tailoring Messages Raises Privacy Concerns.

• Corporate Policies Must Consider Legalities Such As Electronic Signatures, Electronic Contracts, And Conditions For Sending SMS Messages.

Advertisers s

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• A simple registration ensures sending relevant messages to an interested audience .

• Unsolicited messages, commonly known as spam stifle user acceptance

Changing ones mobile phone number is more difficult than changing e-mail addresses

• New regulations that allow people to keep their phone numbers when switching cellular carriers may reinforce fears of unwanted messages and misuse of personal data

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Source: H.M. Yunos, J.Z. Gao, S. Shim, Wireless advertising challenges and opportunities,

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Source: F. Newell, K.N. Lemon, Wireless Rules – New Marketing Strategies for CRM

A text message may never arrive. There is no mechanism to ensure successful data transmission. Experts estimated the probability of a text message arriving towards 99%.

No guarantees that messages will arrive within a few minutes; delays up to six hours are possible.

This is a critical problem for time-sensitive content such as account changes, last-minute tickets, product availability notifications, etc.

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Source: P. Barwise, C. Strong, Permission-based mobile advertising, Journal of Interactive Marketing

According to Experts SMS is useful for targeting young audiences – to announce events or support product launches, for example.

Experts also believe that given the personalized nature of many services, mobile marketing is more useful introducing services than introducing physical goods

Broadband access and advanced mobile devices with multimedia support should increase the medium’s attractiveness for image campaigns.

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*Source: Windwire, First-to-Wireless: Capabilities and Benefits of Wireless Marketing and Advertising Based on the First National Mobile Marketing Trial, 2000.

Cost per thousand or cost per click,

traditional advertising measures for

established media, can also gauge model’s

marketing effectiveness

Strong OPT-IN Response

from consumers

Tested response rate of more than

20% than other media*

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*Source: Windwire, First-to-Wireless: Capabilities and Benefits of Wireless Marketing and Advertising Based on the First National Mobile Marketing Trial, 2000.

Viral Marketing Effects

Viral effects multiply the impact of appealing text messages and

consumer attention. By forwarding messages to their friends, recipients

create strong peer influence

Viral success is hard to predict since it depends on erratic consumer

trends and group dynamics

Common Applications

Mobile Couponing: For targeting based on mobile phone numbers,

time sensitivity and efficient handling by scanning the coupon’s

bar code at the point of sale.

Entertainment services. Providing games and prizes via text messaging yields high participation and helps

attract and keep customers.

Education:Word Stock –

20,000 SubscribersCampusnet – B-School Updates

Financial Groups:Niksstock - 4000

Subscribers Life Insurance

Agent Federation

Media:Pluggedin,

Regional News, etc

Social Groups:Rotary Club,

Lions club, etc

Spiritual Groups:Sikhnetwork –

25000 SubscribersAol Updates

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EHealth:e.g. Honey with milk is a good combination for health & vigour. Have one glass of milk with one spoon of honey daily!

Spirituality:e.g. Guru Fateh Pyaareo, Sannu Apne Dostan - Rishteydara De Number SMS Karo Te Ohna Nu Vi SikhNetwork Da Hissa Banao .

News:e.g. Pakistan confirms delay in election,US diplomat killed in Sudan,80 revellers molest 2 girls on New Year in Mumbai .

Finance:e.g. TAXALERTS: 5TH JANUARY 2008 IS DUE DATE FOR SERVICE TAX PAYMENT FOR MONTH / QUARTER ENDING DEC 07.

Music:e.g. On January 17, 1996, Pink Floyd was inducted into the Rock and Roll Hall of Fame by The Smashing Pumpkins frontman Billy Corgan..

Gaming:e.g. Get ready for ur semifinals today @ 5.30 ,chk ur scedule in www.onlineleague.net ,team rakion .

Party:e.g. Begin ur new years(2008) party season from TONITE @*premium hotel in juhu*.til3am..finally a place wid muzik u like.. dhaval 98xxxxxxxx

Sports:e.g. Villa scored a late winner against Spurs & moved to 5th position. Today's Matches: BBurn-Sund, Bolt-Derb, Liv-Wigan, Newc-ManC

Education:e.g. Revision Session for E4C 2006-08 Batch (II nd Yr) on Jan 02, 2008 will be on Functions, Limits and Continuity by Chide Sir..

THANK YOU