MOBILE MARKETING IN PRACTISE:

TXT-SMS BASED CAMPAIGNS

Course Faculty: Mrs Yasmin Malik

Venue: IBA City Campus, Karachi

Course Start Date: Spring 2012 (Feb 1)

MIS553: Mobile Marketing Strategies (Week 2)

The Power is Still in SMS!

When the Short Message Service (SMS) debuted more than 15 years ago, few could have predicted that a 160-character based message exchange mechanism would be so popular

Popular and profitable!

According to Juniper Research (2009), SMS generates more revenue that all other data services combined on a global basis

Other research companies (inc Portio Research) predict a 78% growth rate in SMS over the next 2 year period i.e. upto 2012

SMS in Pakistan

In 2011, the Pakistan Telecommunication Authority (PTA) published a report on the “SMS Trends” in 2010 in the Pakistan market

It claims that in FY 2009, 151.6 billion SMS were exchanged in Pakistan i.e. approx 621 million SMS per day

Total revenue generated by SMS for FY 2009 = Pak Rs. 40.76 billion (bundled and flat rate SMS)

In 2010: Pakistani mobile phone users exchanged 175.4 billion text messages showing a 16% growth in number of total SMS exchanged (PTA)

Pakistan is following the trend of “emerging” markets where SMS “continues to be harnessed at an increasing pace by government, banks/financial institutions, brands, retailers, television channels” for increasingly sophisticated purposes (Source:Mobile Communications Intl, www.telecoms.com, Feb 2011)

Year Wise SMS Growth in Pakistan

Source: PTA, ProPakistani 2012

SMS Traffic Per Mobile Network Operator

Source: PTA, ProPakistani 2012

MNOs Monthly On-Net/Outgoing SMS (2009)

Source: Study on SMS Traffic Trends & Global Trends 2010, PTA)

PTA’s Recommendations for SMS Growth Pakistan has shown considerable growth in SMS traffic over the last

few years and can be ranked among the top 5 countries that exhibit high SMS traffic trends especially during the “festive seasons”

“…But to sustain growth over the next few years, Mobile Network Operators should put more emphasis on lucrative flat rate promotions, enhanced WAP applications, innovative push/pull and mobile commerce features, utilization of location based services and also working where possible with popular established social-networking sites etc to drive SMS traffic”

PTA also observes that:

“Advertising seems to have attractive potential driver for SMS traffic, and it demands

the operators to support the end-to-end campaign management and reporting

requirements of media buyers and advertisers”

So the Power is in SMS….But….!

Operator margins for SMS are not growing at the same rate and are only forecast a 28% growth rate over the same period till 2012

The combination of increasing competition and subscriber expectations for bundled messaging plans is driving a decline in revenue per SMS

SMS traffic growth is not translating into comparable revenue mainly due to commoditization (more on this later….)

Even though Operators’ strategy of rolling out bundled and flat-rate billing plans to maintain a competitive edge has boosted SMS usage – it has also driven down the Average Revenue Per User (ARPU)

Do you know what the ARPU for MNOs (Mobile Network Operators) in Pakistan is….?

In 2007 it was about $4 and two years later in 2009 it was about $3

Currently it is about $2.75 and expected to fall below $2 by 2012 (Source: BMI)

Hence…

Many MNOs as well as companies are turning to mobile advertising as the solution

Informa Telecoms UK (www.informa.com) valued the global mobile advertising market at $12 billion in 2013

Yankee Group research says:

“42% of mobile customers are open to mobile advertising, if its is relevant, if they asked for it or if they get coupons for free service”

Type 1: Txt/SMS Based Mobile Marketing

Case Study: Sprite ”Kholega To Milega” This case study is featured on the MMA’s website as an example

of successful SMS marketing Brand: Sprite/Coca-Cola Country/Timeline: India, 2009 Methodology: Txt-to-win to a Short Code i.e. SMS marketing that

is based on customer “opt-in” Parallels to Pakistan market? There are many! Similar campaigns i.e. Txt-to-win have been carried out by various

brands of Unilever (e.g. Lux), Strepsils (5050), Dalda (4232), Cartoon Network (4646) etc.

Question: how would you carry out a campaign such as Sprite-Kholega To Milega in practise….?