The document discusses the transformative potential of mobile marketing for consumer companies and mobile operators, emphasizing the creation of branded mobile portals that enhance consumer engagement and brand loyalty. By leveraging personalized access to consumers and utilizing data-driven insights, businesses can establish deeper relationships and new revenue streams through mobile channels. It highlights the importance of tailored content, interactive experiences, and the evolving market landscape that allows businesses to effectively embrace mobile marketing without significant upfront investment.

1. Perspective Roman Friedrich
Florian Gröne
Klaus Hölbling
Michael Peterson
The Rise of
Mobile Marketing
New Opportunities
for Consumer
Companies and
Mobile Operators

2. Contact Information
Berlin
Florian Gröne
Senior Associate
+49-30-88705-844
florian.groene@booz.com
Düsseldorf
Roman Friedrich
Partner
+49-211-3890-165
roman.friedrich@booz.com
Munich
Michael Peterson
Partner
+49-89-54525-640
michael.peterson@booz.com
Vienna
Klaus Hölbling
Partner
+43-1-518-22-907
klaus.hoelbling@booz.com
Booz & Company

3. EXECUTIVE The mobile channel offers an exciting opportunity for
marketers—one that most have yet to fully embrace. One
SUMMARY
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.
Booz & Company 1

4. A Powerful Of all the opportunities for market-
ing made available by new media,
The technology chain is relatively
simple: A company offering services
New Platform the mobile platform perhaps holds or products contracts with a mobile-
the most potential. Indeed, the use of service provider to create a mobile
mobile devices represents an unprec- brand. The mobile brand speaks to
edented and unparalleled shift in how customers—loyal users who identify
consumers use media. But the mobile with the sponsor, as well as new
channel’s growth as a marketing and audiences drawn by the simple value
advertising vehicle has been so fast that proposition of better service at a
some of the world’s most sophisticated lower price. The result? More power-
marketers have yet to determine how ful customer relationships and new
to fully embrace it—not for lack of revenue streams.
desire, but for lack of experience.
A European football team connects
New business models for mobile mar- with its most ardent supporters via a
keting are turning the mobile phone mobile service that provides not just
into a marketer-exclusive platform. player information and game statis-
Marketers can create mobile portals tics but also the chance to purchase
dedicated to their business or brand tickets, T-shirts, and memorabilia.
(giving their message exclusive airtime A discount convenience store rein-
with their best customers), a choice forces its image as a place for quick,
of tailored handsets (to match the inexpensive service with a branded
brand), preloaded applications that low-cost mobile offering. Customers
drive further contact with the brand, who want to buy more minutes can
and any number of other develop- just stop by the store—where they
ing technologies that drive home the might be drawn in by, say, the store’s
exclusivity of the message. new cereal promotion (communicated
via text message, of course). Although
Take the case of mobile phones most U.S. marketers have been slow
branded by Bild, the largest mass- to respond to the mobile challenge,
market newspaper in Germany: The the Polo Ralph Lauren Corporation—
mobile device belongs to the customer that most American of retailers—is
to use in whatever way he or she giving tech-smart fashionistas the
chooses. But everything about it— chance to shop by phone. It can talk
from the message on the screen to the directly with its best customers over
games and gimmicks on the portal to its own dedicated (and branded)
the no-frills rate plan—says “Bild” in mobile service.
a loud (but consumer-friendly) voice.
The result? More powerful
customer relationships
and new revenue streams.
2 Booz & Company

5. Reaching For marketing managers, the omni-
presence of ever more personalized
access advantage over other
channels, but it is not exclusive or
the Segment digital media means that consumers entirely transportable. Mobile is
of One are better informed, more demand-
ing, and more focused on individual
exclusively available to the primary
users—not just in fixed locations,
needs than ever before. In trying to but wherever they go.
reach this “segment of one,” market-
ers find that traditional metrics like • Customer Insight: The mobile
gross reach pale in comparison with channel gives companies access
such informed measures as digital to a wide range of consumer
net reach and cost per transaction. data, including demographics,
Mobile channels, in particular, allow communication and social patterns,
game-changing marketing plays that and—with consumer consent—even
address individual customer needs geographic movement patterns,
and interests. And, by doing so, they thanks to GPS or network
also maximize net reach impact. cell information. Once mobile
commerce gains traction—and it
In its potential to shape and monetize is only a matter of time before it
the customer relationship, there are does—businesses can add shopping
five ways in which mobile outper- history, online store preferences,
forms all other marketing channels and spending patterns to the list.
and platforms (see Exhibit 1, page 4).
• Customer Dialogue: Although
• Customer Access: The mobile
mobile channels do not offer
channel provides virtually the multimedia home theater
continuous access to consumers experience that many PCs
via voice, messaging, or portal provide (and mobile channels
platforms. The Internet has an will obviously never match screen
Booz Company 3

6. size), their content-rich, real-time phone is truly interactive, allowing generation of iPhones.) Because
visual and acoustic platform can be consumers to respond by click, of that emotional statement, users
uniquely tailored to an individual voice, text, or multimedia message. are highly attached to their mobile
consumer. Families, co-workers, devices as not only essential tools
and friends share computer use. • ustomer Emotions: A consumer’s
C but familiar parts of their everyday
The mobile phone is a distinctly choice of a mobile device often is lives. Because the mobile channel
personal device that reflects the use a strong lifestyle statement. (Just enjoys a universal always-on
and interests of its primary user. ask the thousands of people who presence in people’s lives, it is a
And like the Internet, the mobile have stood in line to buy the next 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

7. believers, and supporters of a to the airport. And merchants can location, and social and communica-
certain topic, product, brand, or respond to consumer interest in tion patterns. Most important, inter-
way of life. In short, people get an e-commerce venue by instantly action within the business or social
excited about their mobile phones updating prices or pushing new environment can occur immediately
in a way they never do about the offers. through the multimedia capabilities of
PC or the TV. a mobile phone.
These five dimensions of the mobile
• ustomer Transactions: There
C customer’s relationship provide By creating a relevant user experience,
are few physical boundaries for a distinct context for marketers mobile devices give consumers more
mobile devices. And that mobility who must present a unique value of what they want while providing
means that direct click-through, proposition to connect with their marketers with a powerful platform
e-commerce applications, or mobile customers. In highly competitive for multitiered, next-generation
payment solutions are easily markets, in particular, consumers are marketing campaigns. Because it can
available to consumers no matter becoming accustomed to end-to-end literally put a product or service in a
where they are. In markets such as brand experiences that stretch across prime prospect’s hands, the mobile
Korea and Japan, customers can the physical and digital world. platform is a channel that can imme-
purchase goods from the windows diately enhance a brand’s value. It
of a store that closed to foot traffic Mobile channels, with 24/7 access adds immediacy, relevance, timeliness,
hours earlier; the same may soon to a unique consumer, can build access, and unique customer insight.
be true in Europe and the United interactive relationships by identify- And, with those advantages, it offers
States. If travelers are late for a ing customers not only in terms of marketers new opportunities to boost
flight, they can make up time by personal identity, but also in terms (and measure) their return on market-
checking in from a cab on the way of commercial behavior, geographic ing investments.
In highly competitive markets, consumers
are accustomed to brand experiences that
stretch across the physical and digital world.
Booz Company 5

8. The Depending on how they want to reach
their customers and on their strategic
Or marketers might use the digital
channel to respond to loyal custom-
Parameters objectives and positioning, marketers ers’ behavior patterns with rewards
of Mobile can use branded mobile offerings in
a number of ways to generate value,
triggered by certain behaviors: “Spend
45 minutes browsing stock informa-
Branding first for consumers and ultimately for tion on our financial-services mobile
the bottom line. channel and receive a discounted
stock trade offer.”
It is important to remember that
there is no one-size-fits-all formula Brand-centric content and interactive
for mobile platforms. Each product applications can build brand loyalty
or service has specific brand-building with videos and product demonstra-
needs that will shape the nature of tions, as well as through games and
its mobile offering. And the deep competitions. Such easily accessible
toolbox available allows marketers to content can also manage desired
pick and choose what best suits their channel migration to lower-cost offer-
short- and long-term objectives. ings: “Purchase your airline tickets
through our branded travel mobile
In its most basic form, a branded offering and check in with discounts,
mobile play would look to do little free calls, or loyalty points.”
more than reinforce brand recogni-
tion with classic push advertising Master-class mobile models fully tap
and enhanced brand visibility. Such into the platform’s potential by using
a program would give a prequalified digital channels to build interactive,
audience easy access to special offers collaborative customer programs
and promotions via e-mail, portal, that enable transactions. Think of a
and SMS/MMS tools. Although rev- branded credit card with an interac-
enue sharing—new income driven by tive communications device attached
incremental network traffic, mobile and you can begin to imagine the pos-
usage, and data downloads—is an sibilities inherent in product and ser-
easily quantifiable asset of a basic vice transactions enabled via mobile
channel, revenue diversification in devices. Collaborative programs—user
itself is not a compelling reason to forums, user-generated content, mobile
move into mobile media. focus groups, and digital beta testing,
to name a few—further increase the
Consumer insight and engagement are relevance of the content. For superior
the hallmarks of an advanced tier of credibility, master-class platforms can
mobile models. By creating a mul- offer such location-based mobile ser-
timedia user experience targeted to vices as region-specific content, sight-
subscribers’ specific needs or inter- seeing or shopping guides, and even
ests, this next-generation platform train connections that leave from the
generates business value in a number customer’s current location in the next
of ways. For instance, marketers can hour. From a business-management
cross-sell or up-sell their products perspective, these platforms can call
and services using customized content on subscribers with real-time queries:
offered by online media and mobile “Call or text us free to tell us what
applications. Such incentives encour- you think of our new gizmo.” Such
age customers to accrue usage-based collaborative approaches to product
points that they can redeem for development can cut the costs—and
brand-related products or services. turnaround time—of innovation.
6 Booz Company

9. Cutting-Edge In a previous generation of media
consumption, one of the most dif-
• Is there a robust pipeline of ideas to
tailor enough content, applications,
Mobile ficult challenges was moving readers games, tools, campaigns, and promo-
Opportunities from one daily newspaper to another.
Habit—not quality or relevance of
tions to keep the user interested?
content—was the key reason for con- Does the mobile channel align with
sumer loyalty. And so it is in this new the brand’s core values?
generation: An offering has to be con-
vincingly superior to make customers • an we rule out potential damage
C
change familiar habits. To persuade to the brand, such as misaligned
a customer to move to a branded mobile and offline offerings,
mobile service, a marketer must find insufficient network quality,
positive answers to a number of and inadequate data-delivery
daunting questions, each of which connections?
invites more specific considerations:
• an the mobile offering be tailored
C
Does the branded mobile channel well enough so that it becomes
create genuine value for the brand’s aligned with core brand values,
consumers? on the one hand, and customer
expectations, on the other?
• hat can the branded mobile
W
channel add to the customer • ill the service be aimed at the
W
experience that existing marketing mass market or exclusive? Or will
channels cannot? it draw on both options, offering
An offering has to be
convincingly superior to make
customers change familiar habits.
Booz Company 7

10. discount pricing that still provides and avoid the potential brand • re there realistic options for
A
exclusive brand or content messages damage of a less-than-satisfying outsourcing noncore activities and
to generate consumer insight? mobile experience? complementing in-house resources?
• ill the pricing program reinforce
W Is the business capable of providing a It is essential for any enterprise to care-
the overall perception of the brand? branded mobile service? fully evaluate its responses to this full
list of questions; however, the business
What is the economic significance of • an the organization deliver the
C (or brand) best suited for a mobile chan-
the branded mobile channel? required content and applications to nel typically is characterized by a strong
implement and support the branded presence in its customers’ everyday lives;
• an the program reach sufficient
C channel? a brand or product to which customers
scale to realize the expected benefits? have an intense emotional attachment
• an the organization deliver
C and for which there is a solid network
• ill the branded experience be
W effectively? Can it keep the pipeline of consumer advocates; and a cus-
strong enough to get word-of-mouth filled with viable, engaging content, tomer base whose loyalty is grounded
and viral community endorsement campaigns, and promotions? in a deep sense of community.
Is the business capable of providing
a branded mobile service?
8 Booz Company

11. The Feasibility Marketers have any number of
reasons to be reluctant to break with
services in increasingly competitive
markets. At that early stage of devel-
of Mobile tradition and jump on the mobile opment, differentiation of consumer
bandwagon. Marketers are not tech- experience was minimal or nonex-
nologists. And, as a subset of commu- istent. As we described above, its
nication technology, mobile services “basic” purpose was to put the brand
is not a field in which anyone expects in front of the customer in a passive
marketers to be specialists. Until (but friendly and favorable) manner.
recently, a branded mobile offering
required marketers to spend a good Today’s mobile service player land-
share of their time and money devis- scape is very different. The vertical
ing ways to run back-end processes— dis-integration of the mobile value
such as portal platforms, billing chain and the increasing commoditi-
systems, and digital customer-care zation of network services translate
procedures—which often led to fail- into far more differentiation than
ure and frustration. MVNOs were able to provide even
just a few years ago (see Exhibit 2,
The good news is that building a page 10).
branded mobile offering no longer
requires a major up-front investment. What does this mean for marketers?
Marketers can provide the brand and For starters, they can relax: Becoming
content, and a service provider can do a mobile player is no longer too risky
the rest of the work. or expensive. They do not need to go
out and buy a whole new set of tools;
The business models for delivering there are partners eager to provide
mobile services have evolved over the reasonably priced services at every
last five years or so, most quickly in stage of the new value chain.
Asia, followed by Europe and then
the United States. What began as an More specifically, mobile plays no
investment-heavy model dominated longer require businesses to become
by a few integrated players is now network operators, virtual or
a more open, dynamic market with otherwise. Entry barriers have been
specialists at virtually every step of lowered across the board: Capital
the value chain managing different expenditures are close to zero,
aspects of technology and audience and economically viable services
development. allow brand sponsors to efficiently
approach smaller target groups.
The first wave of value chain dis-inte- The new service provider ecosystem
gration introduced new players that allows marketers to take a calmer, less
used excess network capacity from expensive launch-and-learn approach
mobile network operators (MNOs) to mastering mobile channels.
as a platform for virtual players
(mobile virtual network operators, or The presence of a rich variety of
MVNOs), whose primary focus was service providers opens the customer-
delivering no-frills, low-cost telephony facing end of the value chain to a
Booz Company 9

12. broad range of players. Concerned The upswing in mobile is just
about mobile network infrastructure, beginning, even in the world’s most
handset design and configuration, technologically savvy markets. The
portals, application development, blogosphere is buzzing with rumors
back-end processes, content of branded mobile services sponsored
management, and preconfigured by the likes of social networkers
advertising campaigns? Outsource Facebook, LinkedIn, MySpace,
it all or pick the pieces you want to studiVZ, and XING. And, from a
control directly. With next-generation more traditional perspective, the
mobile platform development, barriers to entry are low for any
marketers have complete flexibility brand-driven business across luxury
in deciding how much or how little niches or broader mass-consumer
they want to be involved in the more segments—media and entertainment;
upstream aspects of the mobile play. fashion; retail; membership-driven
And that allows them to go back organizations, including sports or
to basics and do what they do best: charities; financial services; travel and
embrace the customer, in this case leisure; even automotive.
with a unique mobile offering.
Exhibit 2:
The Evolution of Mobile Operators’ Business Models
Equipment Network Enabling Application Application Customer Sales Customer
Device Operation Technology Development Service Care Marketing Proposition
Manufacturing Provision Billing Branding
Hosting
Content Portal
Development Service
Original Mobile Network Operators
Equipment The Old Days • ncreasing Customer
I
Manu- 1990–2004 Segmentation
facturer
Resellers • ncreasing Differentiation
I
of Offerings
Mobile Virtual Network Operators • Increasing Specialization
Virtualization Along Value Chain
2004–2007 • ecreasing Entry
D
Channel Enablers Barriers and
• Mobile Virtual Network Enablers Capital Expenditure
• Application Developers Requirements
• Managed Service System Providers
• Multimedia and Advertising Agencies Brand-centricity
Branded 2007–
Mobile Channel
Source: Booz Company
10 Booz Company

13. The Time Consumers have long recognized the
convenience and comfort of mobile
Most particularly, they want the
access that mobile devices provide to
Has Come devices. And, at last, the barriers that seamless customer experiences that
limited mobile consumer experiences can link them to other parts of their
have been removed. offline and online lives.
A feature-rich generation of attrac- Finally, branded mobile channels
tive mobile devices like the iPhone now offer marketers in consumer-
(with touchscreen commands, crisp focused businesses a rich tool with
displays, and intuitive entry modes), significant potential to build brands
BlackBerry, and others has arrived, and generate value. For the first time
and the devices now commonly in the history of the mobile channel,
include GPS navigation, MP3 players, entry barriers have been lowered
cameras, and various other multime- sufficiently to make branded mobile
dia features. High-speed connectiv- plays not only conceptually attractive
ity, including broadband and 3G, is but economically feasible.
widely available to the vast majority
of people in developed markets. With the elimination of financial
and economic barriers, marketers
As usage-based tariffs are replaced finally have the chance to leverage the
by attractive flat rates, regulators new business model and address the
are also cracking down on roaming opportunities of mobile marketing:
and termination fees. And cost has real-time access to customers, deep
disappeared as a major roadblock for insights into consumer behavior, and
data-rich multimedia services. value generation for customers. The
rewards for those who capitalize on
Further, as a social driver in the these opportunities—deeper engage-
move to mobile services, the broad ment with consumers, increased
acceptance of the medium across brand loyalty, and enhanced customer
regions and cultures demonstrates lifetime value—not only are clear, but
that the devices have become lifestyle are not to be missed.
icons that consumers decidedly want.
Booz Company 11

14. 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, next-
generation 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 of-
ferings, 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 mini-
mize investment as well as financial and operational risk.
Align the configuration of the mobile service value chain with core business capa-
bilities: Define the proper level of outsourcing in noncore activities (infrastructure
operations, business support services, portal management) and focus on de-
livery 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 mes-
sages across other channels, including traditional broadcast outlets; proactively
stimulate mobile uptake by promoting special mobile content or offers via non-
mobile channels.
12 Booz Company

15. 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/ic-
display/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 Klaus Hölbling is a partner with
with Booz Company based Booz Company in Vienna. He
in Düsseldorf and is the head specializes in marketing, sales,
of the European communica- and customer service capabili-
tions, media, and technology ties for the telecom, high-tech,
practice. He focuses on the and transportation industries.
strategic transformation of lead-
ing telecom organizations in Michael Peterson is a partner
the European mobile, fixed-line, with Booz Company in
and Internet markets. Munich. He specializes in strat-
egy development, particularly
Florian Gröne is a senior asso- in marketing, sales, and other
ciate with Booz Company in customer-facing activities, for
Berlin. He focuses on improving communications and technol-
operating models and develop- ogy companies.
ing technology capabilities in
marketing, sales, and customer
service for telecom organizations
and other IT-driven businesses.
Booz Company 13

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