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Mobile marketing at Telenor Pakistan a MAD strategy?

Yasmin Malik
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 Mobile marketing at Telenor Pakistan a
MAD strategy?
Yasmin Malik
Yasmin Malik is Visiting
Faculty at the Institute of
Business Administration
(IBA), Karachi, Pakistan.
Downloaded by New York University At 04:21 03 February 2016 (PT)
This case study was prepared
in collaboration with Telenor
Pakistan on the operators
mobile marketing strategy as
applicable to the Pakistan
market.
Disclaimer. This case is written
solely for educational purposes
and is not intended to represent
successful or unsuccessful
managerial decision making.
The author/s may have
disguised names; financial and
other recognizable information
to protect confidentiality.
DOI 10.1108/20450621211214478
Introduction
Towards the end of 2010, Amer Ishtiaq, Manager Channels and third-party services at
Telenor Pakistan had achieved an element of success in what was till that time viewed in the
local telecommunications industry as being rather contentious, if not wholly unattainable:
mobile marketing.
Concerned that the highly competitive nature of the Pakistan telecommunications market
would relegate Telenor to a mobile operator that was only offering basic mobile services
rather than more value-added services (VAS), Amer Ishtiaq and his newly set up mobile
marketing team, MAD, put forth a strategy in early 2010 in order to both develop and
strengthen a mobile marketing eco-system in Pakistan.
By taking the lead in the market as the first local operator to implement a comprehensive
mobile marketing strategy via permission-based consumer profiling, Telenor was able to
successfully cross some of the hurdles associated with mobile marketing in the Pakistan
market. What were these hurdles and what strategy did Telenor adopt to try and overcome
them? Did their mobile marketing strategy together with the operators positioning as a
Media Company with respect to the mobile marketing value chain give them a competitive
edge? And, most significantly, can the operator be seen as a Driver for a mobile marketing
eco-system in Pakistan?
This case study aims to provide answers to these questions and elaborates on how
operator-driven rather than brand-driven mobile marketing can positively impact the mobile
marketing eco-system in an emerging market like Pakistan.
Company background
Telenor Pakistan is 100 per cent owned by the Telenor Group, an international provider of
high-quality mobile telephony services in 14 markets across Europe and Asia. The Telenor
Group is among the largest mobile operators in the world with over 179 million mobile
subscribers and a workforce of approximately 40,000 (Telenor, 2010).
Telenor Pakistan gained access to the local mobile telephony market in 2004 when it
successfully gained a license for mobile voice and data services through an internationally
focused open-bidding auction process undertaken by the countrys telecom regulator, the
Pakistan Telecommunication Authority (PTA).
This enabled Telenor Pakistan to start commercial operations on 15 March 2005 on a
nationwide basis establishing a customer base of one million mobile subscribers within six
months of launch. At the time that it started commercial operations in the local market,
it stood to compete with three established operators including the market leader Mobilink
(a subsidiary of Egypts Orascom), Ufone (a subsidiary of the incumbent PTCL) and the now
VOL. 2 NO. 1 2012, pp. 1-14, Q Emerald Group Publishing Limited, ISSN 2045-0621 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 1
 defunct Paktel (wholly taken over by China Mobiles Zong in, 2008). Another entrant,
Warid Telecom (backed by the Abu Dhabi Group and consequently Singapore Telecom),
also launched commercial mobile telephony services in Pakistan in the same year as
Telenor thereby establishing a local mobile telephony market comprised of five competing
elements.

Competing in a regionally trend-setting telecommunications market

The initial years following Telenors entry into the Pakistan market were defined by
extraordinary growth in overall cellular subscriber rates, i.e. the rate at which mobile
operators were adding new customers and gaining market share.
During these years, the mobile operators set many a regional trend and were aided by
government backed competitive freedom and telecom de-regulation policies positively
benefiting all the mobile operators competing in the market.
For example, by mid-2006, Pakistan was ranked as one of the fastest growing
telecommunications markets in the world in terms of net subscriber additions (i.e. the
number of new mobile customers gained per quarter). During this period, Pakistan was also
ranked third in the top ten Asia-Pacific countries with respect to the number of mobile
customers gained per quarter (Table I) with an astounding year-on-year growth rate of 166
per cent as compared to Indias 80 per cent and top ranked Chinas 19 per cent at the time
(Informa Telecoms & Media UK, 2006).
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Significantly, Telenors main competitors Mobilink and Warid Telecom became noteworthy
regional trend-setters during this fast-growth period and were ranked among the top ten
operators for the Asia-Pacific region in terms of net additions per quarter (Table I) a
positioning that Telenor also aimed to attain via its long-term vision, focused infrastructure
investment and careful study of local needs. In this sense, Telenor initially lagged behind
Warid Telecom which, in addition to its regional ranking, had also achieved an envious
positioning in the local market within a year of launch despite having entered the market at
the same time as Telenor.

Table I Top ten Asia-Pacific countries and operators by net additions for 2Q 2006

Top ten countries by net adds, 2Q 2006

Rank Country Net adds Total subs
1 China 16,780,800 410,903,100
2 India 12,453,180 101,905,260
3 Pakistan 6,667,470 33,900,380
4 Indonesia 4,754,170 46,058,570
5 Bangladesh 3,710,940 15,442,930
6 Vietnam 3,548,680 13,603,460
7 Philippines 2,636,330 38,959,720
8 Thailand 1,950,970 34,307,290
9 Malaysia 1,254,500 21,874,600
10 Japan 1,067,100 92,869,300
Top ten operators by net adds, 2Q 2006
Operator Country Net adds
1 China Mobile China 13,141,000
2 China Unicom China 3,617,600
3 Bharti Airtel India 3,432,130
4 Telkomsel Indonesia 3,247,600
5 Mobilink Pakistan 3,072,980
6 NTT DoCoMo Japan 2,752,500
7 Grameen Phone Bangladesh 2,032,000
8 MobiFone Vietnam 2,028,300
9 Warid Telecom Pakistan 1,847,200
10 Tata Teleservices India 1,768,600

Source: Informa Telecoms & Media (2006)

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PAGE 2 EMERALD EMERGING MARKETS CASE STUDIES VOL. 2 NO. 1 2012
 Growth in the local market continued its impressive upward trend and at the end of July
2010, the total mobile subscriber base in Pakistan had crossed the 100 million mark
(PTA, 2010a, b).
Although Telenor initially had close competition from Warid Telecom in particular, by 2010
Telenor had overtaken its rivals to become the second largest mobile operator by subscriber
base commanding approximately 24 per cent of the market after market leader Mobilinks
33 per cent share (PTA, 2010a, b). Alongside the establishment of an enviable subscriber
base, Telenor also made strong inroads as a mobile internet service provider by establishing
one of the largest mobile data-based networks in the country.
To date, Telenor has made investments in excess of US$2 billion making it the countrys
single largest European investor and has brought a variety of VAS to the Pakistan telecoms
industry including the Easypaisa mobile or branchless banking service. The 2009
Easypaisa launch made it the first telecom operator to partner with a bank (Tameer
Microfinance Bank) to offer mobile financial services across Pakistan. Notably, Telenor is one
of the few mobile operators in the world to receive a grant from the Bill & Melinda Gates
Foundations Mobile Money for the Unbanked Fund.
In addition, the company is known for its strong corporate social responsibility projects
including Khuddar Pakistan which aims to create dignified opportunities for disabled
people (Telenor, 2010).
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Its product portfolio is aimed at 98 per cent of the Pakistan market that make up pre-paid
mobile users (i.e. mobile subscribers who charge up their mobile accounts via paid-for
scratch cards as they go). Its pre-paid brand Talkshawk (TS) launched in June 2006 and
its youth-specific brand Djuice launched in March of the same year have a strong
following. Its post-paid (or contract-based) service Persona Postpaid was launched in
February 2007 to cater to the less than 2 per cent market of post-paid users in Pakistan.

Drastic decline in revenue per subscriber

Despite impressive, and oft quoted, growth figures in the industry, the corresponding
rise in revenues for the operators in the Pakistan market had suffered a serious declining
trend something to which Telenor was not immune.
Economic and political conditions as well as the impact of mobile subscribers cutting down
on spending had drastically affected the monthly average revenue per user (ARPU) and
hence the profitability for all operators.
ARPU (which is an important metric to measure the revenue and profitability generated per
mobile subscriber per month) was further negatively affected by cut-throat competition with
operators continued reduction in call rates in order to gain more customers.
When Telenor entered the market in 2005, industry average ARPU stood at $5.70. But by end
2009, Mobilink and Telenor (accounting for a combined 55 per cent share of the market
at the time) witnessed a worrying decline in market average ARPU from US$2.04 to
$1.72 representing a sweeping reduction in revenue per mobile subscriber of almost 70
per cent from what the rate had been in 2005. Furthermore, in early 2010, Telenor Pakistan
reported a 4.2 per cent year-on-year loss in revenues caused mainly by a fall in subscription
and traffic revenues. It hence became crucial for Telenor to make a strong move in the
market towards services that offered more value addition and that were not just based on
voice-based services (BMI, 2010).

The need for a mobile marketing (MAD) strategy at Telenor

Amer Ishtiaq surmised that in the current price-driven mobile telephony market, the
combination of increasing price competition and subscriber expectations for bundled
messaging plans was driving a decline in revenue.

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VOL. 2 NO. 1 2012 EMERALD EMERGING MARKETS CASE STUDIES PAGE 3
 This made it imperative for the operator to enable mobile marketing-based initiatives through
its own technology channels and therefore, capitalize on mobile marketing as a viable
alternate revenue stream to offset the serious decline in ARPU.
Although short-term attempts at mobile marketing had been made by mobile operators and
brands alike over the years especially via text-based or short message service (SMS)-based
campaigns, Amer Ishtiaq and his team were very aware of the fact that there existed a great
deal of misconception about the true nature of mobile marketing in the Pakistan environment.
At the time, one of the major challenges for Ishtiaqs team as described in his own words was
that [. . .] given the lack of technical know-how among brand teams in general, the main
challenge will be to explain the value proposition of the mobile medium [. . .].
The team had to keep in mind one other very significant challenge: to ensure that all Telenor
supported or enabled mobile marketing initiatives complied strictly with the fundamental rule
of mobile marketing, i.e. permission (or opt-in)-based marketing (Barnes and Scornavacca,
2004).
Ishtiaq hence instilled in his team from day one that Customer permission/opt-in is a
pre-requisite for all mobile marketing campaigns [. . .] this is the key difference between
mobile advertising and spam.
The latter, did indeed, form the fundamentals of Telenors mobile advertising strategy coined
MAD (MAD mobile advertising) which the team put into practice via the MAD Pilot
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Project executed over the period between 1 April 2010 and 21 May 2010.
MAD, which was conceived by Telenor Pakistan in January 2010, was formed from a
cross-functional team involving the following departments:
B VAS: project owner. Responsible for MAD strategy, business planning and revenue
generation.
B Products and services: project management. Responsible for product development and
process management.
B Business intelligence: customer base management. Responsible for processes including
opt-in process and customer profiling.
B Technology division. Multiple departments involved for technology related action points.
B Marketing. Agency engagement and market insights gathering.

MAD as a means for operator positioning in the mobile marketing value chain
Apart from off-setting declining ARPU, Telenor also realized that the MAD strategy would
play a very important role in helping the operator to achieve a significant re-alignment of its
positioning in the mobile marketing value chain. This would allow Telenor to better compete
in the local market and to minimize the risks associated with disintermediation and
commoditisation. The latter two are likely to lead to operators losing part of their grip on
subscribers, more difficulties in gaining their loyalty and ultimately lead to higher risk of
increased price competition hence lowering the operators overall profitability.
With respect to the mobile marketing value chain, the operator controls both the user
interface and the relationship with the customer (Arthur, 2008) as well as figuring prominently
in the success factors that studies such as those conducted by Leppaniemi et al. (2004).
Their predicted success factors include not only content, cross-media marketing, campaign
management and customer database, but also highlight the operators role in creating a
mobile marketing value chain that is more amenable to both consumer demand and
preferences.
In order to achieve value chain re-alignment, operators can adopt one of three possible
positions in the mobile marketing eco-system namely: bit-pipe, smart-pipe or
integrator (ADL-Exane BNP Paribas, 2010). Remaining a bit-pipe operator would
relegate Telenor to core voice services only a position it wanted to move away from.
Hence Telenors MAD strategy incorporated a smart-pipe approach which can be attained

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PAGE 4 EMERALD EMERGING MARKETS CASE STUDIES VOL. 2 NO. 1 2012
 if the operator chooses an intermediate position by providing voice access as well as VAS
(for example, payment, location and advertising) to third-party players that sell mobile multi-
media services.

Utilizing the core Asset for MAD

In order to maximize mobile marketing value chain re-alignment the MAD team wanted to
ensure that Telenor should be seen as a Media Company incorporating the multiple roles
of Publisher, Property Provider and Carrier so that it could position itself as an enabler for
mobile marketing in Pakistan and provide a possible driving force for the development of a
mobile marketing eco-system in a nascent market.
As part of its vision to be seen as Media Company, Telenor intended to offer profiling and
tracking capability as a carrier, provide the mobile technology or mobile Property for
mobile marketing campaigns and aid in the overall marketing communication process by
virtue of being a publisher.
Telenor hoped that the company would be able to cement its approach to this mobile
marketing eco-system by adopting the MAD strategy in principal and the MAD Pilot Project
in practice.
The issue for the MAD team was hence not so much on the mechanics of increasing Telenors
subscriber base a goal which other operators were chasing as it was to utilize one of its
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core assets, i.e. that very subscriber base. With access to subscriber base details, any
operator is in a very good position to facilitate subscriber profiling, which, in turn, can lead to
well targeted and successful marketing campaigns (Vatanprast and Asil, 2007).
The challenge remained, however, how the MAD team would be able to sell this core asset
to brands as a comprehensive and value-driven tool for mobile marketing and hence reverse
declining ARPU.

Mobile marketing industry in Pakistan

With respect to the overall mobile marketing industry in Pakistan, there was still considerable
hesitancy among brands towards adopting the concept of mobile marketing into their overall
marketing mix or, indeed, to define a visible mobile marketing strategy for their brands
(Malik, 2011). Operators too had engaged haltingly in mobile marketing with very little
tangible results and a poor focus on subscriber profiling.
Although digital/internet media ad spend as a percentage of total media ad spend in
Pakistan had increased marginally from 2009 to 2010 no reliable data or figures had been
published as to how much of this digital ad spend incorporated local media spend on mobile
marketing (DAWN, 2010).
However, certain brands as well as the media (TV channels in particular) had made good
use of visible and fairly well-executed opt-in (or permission-based) SMS marketing
campaigns whereby consumers were asked to participate by voluntarily texting to an
advertised short code (four digit code with premium text charging rates) thereby taking part
in a quiz or poll, for example.
Despite this, SMS marketing, in particular, was still viewed by many brands as a mass media
marketing tool rather than an opportunity to engage in well targeted and engaging mobile
marketing campaigns (Bawany, 2011).

A MAD Pilot?
As mobile marketing was generally perceived as more of a mass spamming tool than a
viable marketing channel by many in the industry, the MAD team set out to actively
re-educate prospective brands and advertisers about the possibilities of using this channel
with Telenor.

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VOL. 2 NO. 1 2012 EMERALD EMERGING MARKETS CASE STUDIES PAGE 5
 Value proposition for brands
Ishtiaq did not lose sight of the fact that the major challenge for the MAD project was to
convince local brands of the value proposition of taking part in the pilot project. Despite
having the second largest subscriber base in the country, Ishtiaq cautioned his team that:
[. . .] this is the maxima in terms of reach, but the actual inventory of mobile advertising will be
driven by the total number of subscribers who have opted in on a monthly or yearly basis [. . .].

Telenor was of the view that the MAD Pilot provided an opportunity for brand teams to
experiment with a new medium, offered by a company with a well-reputed brand.
Nevertheless, the companys value proposition which consisted of a reach of 25 million
subscribers, the opportunity to have a dialogue with consumers, real-time targeting and
campaign tracking was one which the MAD Pilot would have to prove in practice.
An initial limitation observed by the MAD team with respect to the brands that were
propositioned with MAD, was to bring about a change in the mindset on mobile marketing:
Brand Teams, in general, have low awareness level of technology and its usage. So, to start off,
awareness of Mobile as a medium and its proposition in Pakistan had to be created. However, in
general, Brand Teams were receptive to the idea and showed keen interest in participation.

Telenor understood that to add more credibility to their mobile marketing strategy, some data
pertaining to the relevancy and acceptability of mobile marketing would need to be
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presented to brands. Questions such as consumer acceptability towards text-based and

ring tone-based advertising, ad relevancy and the overall intention to subscribe to mobile
marketing would need to be answered by Telenor.
At the time that MAD Pilot was proposed to the brands, Telenor did not have the answers to
the above to provide a better picture of the opportunities in mobile marketing for the local
market.
To address what could have become a major hurdle, the MAD team decided to incorporate a
Consumer Research Insights program as a test of proposition into the MAD Pilot Project
in the form of post-pilot surveys aimed at gauging the success rate of the proposed
campaigns.
MADs value proposition resulted in a total of 15 brands (including the FMCG, foods,
beverages, financial services, apparel and technology industries) and eight
advertisers/media agencies agreeing to take part in the pilot project.

MAD framework and campaign design work shop

Another major worry for the MAD team was their genuine concern on the readiness of
Brands for campaign design on mobile marketing.
They were aware of the fact that:
Brand teams rely on ad agencies for creative ideas and media agencies for media planning.
Agencies do not have the expertise on Digital Media, may that be internet or mobile.

and knew that this knowledge gap would need to be filled as an integral part of the MAD Pilot
Project.
In order to directly address this, the MAD team designed and implemented a six-phase MAD
framework incorporating the setting of campaign goals, advising on the best mobile
technology channel or mobile property for campaign execution, overall campaign design,
creative development along with value chain alignment and finally campaign execution and
analysis (Figure 1).
The MAD teams involvement with Phase 1 (i.e. setting campaign goals) was fairly limited as
this was quite clearly understood by the participating brands and agencies in line with their
overall marketing and sales activities. This primary phase was also where brands defined to
Telenor their target segment and profiling requirements as well as the campaign success
rates expected.

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PAGE 6 EMERALD EMERGING MARKETS CASE STUDIES VOL. 2 NO. 1 2012
 Figure 1 Framework template: mobile marketing campaign design steps providing
end-to-end campaign management

Campaign Design

Draft Mechanics

Message
Set Campaign Select Property Process flow Prepare Execute Analyze
Goal Action
Brand Awareness? Reach for target Creative Duration # Impressions
profile Set incentive Development Lucky Draws Click Through
Sales enhancement?
Scheme Value Chain
Feedback Gathering? Brand Synergies Incentive Payout Rate Leads
Prize Alignment
Winning criteria

MMS

Application Incentives
SMS

Mobile
Advertising Telenor Advertiser 3rd Party
Properties Specific Specific Specific
USSD IVR

Free Discounted
Mobile Free SMSs
Call Minutes Content
Internet
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Source: Telenor Pakistan (2010)

However, a high level of involvement and guidance proved to be necessary from the product
services arm of the MAD team for Phases 2-4 of the framework. Telenor strengthened its
approach towards educating the brands for these ph6ases (i.e. mobile advertising property
selection, campaign design, campaign preparation) by running a number of campaign
design workshops through which Telenor defined a working plan leading up to
campaign execution which defined the participants, the goals and the roles for the MAD
Pilot. Hence these three phases, in particular, provided a means to present Telenor as a
Media Company to brands and helped the operator to implement its vision of value chain
re-alignment.
Each campaign design workshop was aimed at educating the brands and advertisers as
to the possible avenues they could take to market their products via the mobile platform.
At the same time, Ishtiaq outlined the scope of the MAD Pilot:
At the moment, the MAD program is targeted at the pre-paid subscriber base only. We need to
keep in view the fact that 98% of the subscriber base is prepaid industry wide.

During the campaign workshop advertisers and brands were advised of the best mobile
property/channel for the execution of their product (see MAD properties below), ad
creative format requirements, targeting and response tracking requirements and the
associated incentive schemes for each campaign. For the latter, Telenor collaborated with
the brands to establish if incentives should be campaign specific or target specific and
if Telenor, the advertiser or a third-party should be the incentive cost bearer. Telenor-specific
incentives, for example, included free weekly minutes or texts and discounted mobile
content.
For Phases 5 and 6 of the MAD framework, practical campaign execution was overseen by
MADs operational arm which ensured that actual campaign roll-out was according to the
selected mobile channel (for example, via SMS-based lucky draws) and also within the
designated time frame. These final two phases ensured that the correct consumer segment
was targeted in line with the brands required target profile and that applicable incentives
were delivered as required through the mobile channel.
Results were closely monitored and included the recording of click-through rates (CTRs),
i.e. the number of clicks on mobile banner ads made by mobile subscribers who saw the

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VOL. 2 NO. 1 2012 EMERALD EMERGING MARKETS CASE STUDIES PAGE 7 j
 banner ads via the mobile internet. CTRs are a common way to measure the worth and cost
of a mobile marketing campaign and are defined as the number of clicks on a mobile ad
divided by the number of times the ad is shown (i.e. impressions) expressed as a
percentage. Generally, a CTR of 2 per cent or higher is considered very successful although,
on average, CTRs are usually in the 0.2-0.3 per cent range.
In this manner, the entire MAD framework not only incorporated a crucial education process,
but provided further rigour from Telenor by providing an end-to-end mobile campaign
management service for the participating brands.

MAD properties
Telenor facilitated brands by allowing them to choose the specific mobile marketing channel
or mechanics by which they wanted to execute their particular campaign. These mechanics
were termed as Properties by Telenor.
Each brand was given the option to run their campaign via seven mobile technology
properties as part of Phase 2 of the MAD framework (Figure 1).
Through these properties, brands would be able to execute mobile marketing campaigns
based on, for example, texting, ring-tones, mobile internet or mobile portal. For instance, the
WAP portal property allowed brands to place mobile banner ads on Telenors own mobile
portal (see the Exhibit, Table EI, for further explanation of mobile property terms).
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MADs product services arm emphasized the viability of each property to the brands as part
of the property selection phase.
Many brands opted for the SMS-based property due to the popularity and ease of use
of SMS in the local market (PTA, 2010a, b). A special report published by the PTA on SMS
traffic trends in Pakistan showed that in 2009, approximately 151.6 billion SMS were
exchanged in Pakistan and the total revenue generated by SMS in the same period was Pak
Rs 40.76 billion inclusive of bundled and flat rate SMS.
Riddles, lucky draws and multiple-choice questions via SMS, in particular, were adapted by
many brands as a means of execution.
Another popular choice for brands was that of ring back tones (RBTs). RBTs in Pakistan are
usually charged-for audio clips of popular movie and folk songs and can be heard by the
caller when ringing another mobile user while waiting for the receiver to answer the phone.
RBTs were already a well accepted and lucrative practice among Telenor subscribers and
overall represent a Rs 4.8 billion industry in the Pakistan telecommunications market
(Telenor, 2010).

MADs permission-based profiling

From the branding point of view, studies have shown that prior permission from the mobile
subscriber is a critical factor, the absence of which can either cause resentment or irritation
towards the brand or can cause the mobile marketing effort to be ineffective (Barwise and
Strong, 2002). Furthermore, subscriber permissions limit intrusiveness and enhance the
subscribers acceptance of the marketing message.
While strictly adhering to permission-based subscriber opt-in for MAD, the MAD team
emphasized Telenors ability to offer a new level of customer profiling achievable using
Telenors extensive Customer Relation Database comprising geographic, demographic,
psychographic and behavioral data while propositioning brands and advertisers.
Ever the realist, Ishtiaq was candid in what Telenor could not do: We cannot profile on
attributes such as aspirational values or give absolutely accurate information on whether
males or females use a certain cellular connection.
The latter was something all operators were struggling with due to the prevalent
practice in the market of subscribers registering multiple SIMs or connections under one
name.

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PAGE 8 EMERALD EMERGING MARKETS CASE STUDIES VOL. 2 NO. 1 2012
 Ishtiaq further advised the participating brand teams that the focus of the campaigns will be:
[. . .] driven by the profiling requirements of Advertisers, i.e. yourselves. We will ask you, i.e. the
brand teams, to share profiling requirements and based on that Telenor will devise the
mechanism for targeting that profile and, after open discussion with the brand teams, lock
the proxies for profiling.

To generate each profile, a mix of Telenors pre-paid brand TS and youth-brand Djuice was
taken, typically 30 per cent TS vs 70 per cent Djuice. To take into account the prevailing
practice of multiple SIM usage where users often change SIMs according to offers by
competing operators, Telenor ensured that all subscribers chosen for each profile had been
active for at least 30 days.
Telenor found that profiling needs varied considerably with each brand. A broadband
service provider, for example, was keen to segment on age group (15-28 years), better
buying power associated with high-end spending subscribers (typically users who spent
more than Pak Rs 250 per month on their mobile connection, i.e. who had a monthly ARPU of
Rs 250 or above), and certain psychographic and behavioral aspects such as
subscribers being tech-savvy and mobile internet/Facebook users while geographic
segmentation remained limited to one major urban city (Figure 2).
On the other hand, an apparel brand had additional and more stringent filtering and
psychographic/behavioral profiling requirements (Figure 3). For example, college and
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university students were identified for this profile by examining how tech savvy they were in
terms of GPRS (mobile internet/data access), Facebook and SMS/MMS bundles usage and if
they loved music by virtue of their subscription to Telenors Smartunes and RBT services.
Telenor also found that many brands (dairy and soap products, for example) had a very specific
profile aimed very definitively at females with a strong focus on housewives in many cases
(Figure 4). Apart from using standard filters for demographics (age, gender), buying power

Figure 2 Profile template showing requirements for a broadband service provider for the
MAD Pilot with standard filters

MOBILE
ADVERTISING

Urban youth 15-28 yrs 30 day active pre-paid base: dJuice centric
(70% dJuice, 30% TS)

SEC A+, A, B
ARPU segmentation (Card Reload PKR 250+)
(buying power)

Initial target market: Geographic segmentation

Karachi
PSYCHOGRAPHICS BEHAVIORAL

- Avid GPRS - GPRS/MMS ARPU

- Young, user > PKR 6
energetic - SMS bundle user
- Facebook SMS
- Mobile

- Tech savvy
Legend:
Requirements
Customer profiling

Source: Telenor Pakistan (2010)

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VOL. 2 NO. 1 2012 EMERALD EMERGING MARKETS CASE STUDIES PAGE 9
 Figure 3 Profile template showing requirements for an apparel brand for the MAD Pilot
with more advanced filters

MOBILE ADVERTISING

All 30 day active pre-paid base

SECs A, A+, B, B+
ARPU segmentation (PKR 150+)
HH income from 25 -300k+

College students Geographic segmentation : top

10 metro cities
A- levels & business
schools
University students
Job beginners, mid Students Employed
PSYCHOGRAPHICS
level managers/ top
70:30% Djuice/TS 80:20% TS/Djuice - Fun loving lifestyle
managers base base Tech savvy & Love
Business men GPRS/MMS ARPU > 10
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GPRS/MMS ARPU > 6 music

Overall ARPU > 250
Smart tunes user Smart tunes user BEHAVIORAL - Reactive to
Legend: Facebook Facebook promos & offers - Users of
mobile/SMS mobile/SMS
Requirements
Facebook
RBT user ARPU > 6 RBT user ARPU > 10
Customer profiling
SMS/MMS bundle SMS/MMS bundle
Suggestive refinements user user
Early adopters Early adopters
(reaction time to new (reaction time to new
offer < 1 week) offer < 1 week)

Source: Telenor Pakistan (2010)

(high ARPU segmentation) and geographics (urban cities), Telenor employed further advanced
filters to establish a female-centric profile by cross-compilation with behavioral data associated
with women. For example, subscribers that had registered for services such as the cooking-
based Pakwan service and the call-blocking service were included in this profile.
In fact, some brands such as the carbonated drinks industry which were traditionally
expected to target the youth and teens market, very specifically wanted mothers (typically
users of the Pakwan service) included in the profiling mix, thereby setting a more
demanding filtering requirement from MAD.

MAD via the mobile internet

Keen that brands should try out the entire range of mobile properties that Telenor had on
offer and also capitalize on the cross-sectional profiling mix that the company had built up
via its info gathering and refinement projects, the MAD team pointed out the benefits of
targeting users via the mobile internet using mobile internet banner ads on Telenors own
mobile internet portal (Figure 5).
Ishtiaq elaborated:
A diverse mix of our subscribers use the mobile internet. The main types/characteristics of mobile
Internet users that we have ascertained via our Info gathering and Refinement project are:
B youth who are tech savvy and want to stay connected in their social networks.

B young professionals and corporate executives who need internet on the go.

B generally high ARPU users.

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PAGE 10 EMERALD EMERGING MARKETS CASE STUDIES VOL. 2 NO. 1 2012
 Figure 4 Profile template showing profile requirements of a dairy brand centered entirely
on women

MOBILE
ADVERTISING
30 day active pre-paid base: dJuice centric
18-25 yr old females (70% dJuice, 30% TS)
(young, urban
females)

SEC A & B (Buying power) ARPU segmentation (PKR 250+)

Target: urban cities Geographic segmentation

Females who want to make their mark

in the world (NOTE: such aspirational
GPRS/MMS ARPU > 6
values cannot be targeted, rather the Smart tunes user
following can be tapped): Facebook mobile/SMS
RBT user ARPU > 6 Services more
SMS/MMS bundle user attuned to use
Social, active women Call blocker service
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by women
Mobile, energetic Pakwan service

Legend:

Requirements
Customer profiling
Suggestive refinements

Source: Telenor Pakistan (2010)

B users of internet in general and so a literacy factor also plays an important role.When questioned
about the relation of handset targeting and the cost associated with more high-end internet
enabled phones, i.e. smart phones, the MAD team had to admit to the brand teams that:

Telenor can track the handset models used by subscribers and can use it as a proxy for profile
targeting. With regard to the mobile Internet, handset enablement is a barrier and internet
enabled handsets are more expensive than the devices masses have, hence a higher
socio-economic class could be related to internet usage.

MAD results
Approximately 165,000 Telenor subscribers were targeted via the MAD Pilot which included
three weeks of initial consumer engagement followed by one month of actual campaign
execution with 41 pilot mobile marketing campaigns run during that period (Table II) giving 3.
6 million impressions or mobile ad servings.
Campaign level CTRs were also in line with expected industry standards as shown for
selected properties in Table III.
Significantly, the post-pilot survey results showed that the overall intention of consumers to
subscribe to mobile advertising was 85 per cent while that for SMS-based campaigns was
94 per cent, with high-consumer acceptability for SMS and RBTs.
However, the results also cautioned that ad relevancy needed to be ensured for higher
consumer receptivity.

Towards a MAD future [. . .]

As Amer Ishtiaq thoughtfully surveyed both the better than expected MAD results and the
tranquility of the Margalla Hills outside his office in Islamabad, he wondered if the road

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VOL. 2 NO. 1 2012 EMERALD EMERGING MARKETS CASE STUDIES PAGE 11
 Figure 5 Telenor WAP portal showing mobile banner ad for operators music box service
Downloaded by New York University At 04:21 03 February 2016 (PT)

Source: Telenor Pakistan (2010)

Table II Campaign results per property used

Property Bulk SMS Bulk MMS RBT IVR Idle screen client WAP portal banner Total

No. of campaigns 8 5 6 6 5 5 41

Source: Telenor Pakistan (2010)

Table III Campaign level CTRs

Mobile property WAP portal (%) Bulk SMS (%) Idle screen client (%)

Average CTR per property 2.1 2.5 4.2

Campaign level CTR 1.6-2.9 0.6-6.4 3.1-4.3

Note: CTR (internet) , 1 per cent

Source: Telenor Pakistan (2010)

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PAGE 12 EMERALD EMERGING MARKETS CASE STUDIES VOL. 2 NO. 1 2012
 ahead for Telenors mobile marketing initiatives would remain as unperturbed as the view in
front of him.
Some obstacles had been crossed successfully: creating a value proposition for mobile
marketing; kick-starting the education process to brands on the application of subscriber
profiling. Others remained: continuing information refinement, prevailing mis-conception of
permission-based mobile marketing in Pakistan and executing MAD in such a way so as not
Keywords:
to compromise on the consumers trust and privacy.
Mobile marketing,
Opt-in, As Ishtiaq once again surveyed the backdrop of the Margalla Hills, the answer to the future
Customer profiling, remains unanswered: could MAD form the stepping stone to the companys more ambitious
Pakistan follow-on mobile marketing initiative, the brand ambassador program?

References
ADL-Exane BNP Paribas (2010), Mobile internet: blessing or curse, available at: www.adl.com/
reports.html?&no_cache1&category10&view503
Arthur D.L. (2008), A mobile playground: how mobile operators can monetize mobile advertising,
available at: www.adl.com/publications.html?category10&extsearcha mobileplayground
Barnes, S.J. and Scornavacca, E. (2004), Mobile marketing: the role of permission and acceptance,
International Journal of Mobile Communications, Vol. 2 No. 2, pp. 128-39.
Downloaded by New York University At 04:21 03 February 2016 (PT)

Barwise, P. and Strong, C. (2002), Permission based mobile advertising, Journal of Interactive
Marketing, Vol. 16 No. 1, pp. 14-24.
Bawany, A. (2011), Ethics in business: mobile marketing or SMS spam?, The Express Tribune, Vol. 4,
April, available at: http://tribune.com.pk/story/142408/ethics-in-business-mobile-marketing-or-sms-
spam/

Business Monitor Intl-BMI (2010), 3Q 2010 Pakistan Telecommunications Industry Report, pp. 7 and 74.
DAWN (2010), FY2009-FY2010 Pakistan media spend figures, DAWNs Aurora Magazine,
November-December, p. 132.
Informa Telecoms & Media UK (2006), Global Mobile Report, Informa Telecoms & Media UK, London,
Vol. 13 No. 6, p. 18.

Leppaniemi, M., Karjaluoto, H. and Salo, J. (2004), The success factors of mobile advertising value
chain, E-Business Review, Vol. IV, pp. 93-7.
Malik, Y. (2011), Does your brand have a visible mobile marketing strategy?, Marketing Review, Q1,
pp. 32-3, Marketing Association of Pakistan.

PTA (2010), 2009-2010 Annual Report, Pakistan Telecommunication Authority, Islamabad, p. 47,
available at: www.pta.gov.pk/annual-reports/pta_ann_rep_2010.pdf
PTA (2010), Study on SMS Traffic in Pakistan & Global Trends, Pakistan Telecommunication Authority,
pp. 7-8, available at: www.pta.gov.pk

Telenor Pakistan (2010), Q1 2010, Company web site, available at: www.telenor.com.pk
Vatanprast, R. and Asil, M. (2007), Factors affecting the use of mobile advertising, International
Journal of Mobile Marketing, Vol. 2 No. 2, pp. 21-34.

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VOL. 2 NO. 1 2012 EMERALD EMERGING MARKETS CASE STUDIES PAGE 13
 Exhibit

Table EI Table of explanatory terms

Mobile
marketing
term Meaning Further explanatory notes

ARPU Average This is an important metric in the telecommunications industry to measure the revenue and profitability
revenue generated per mobile subscriber per month. Typically it is measure in US$ and reflects how much a
per user mobile subscriber is spending on his/her mobile connection every month. In Pakistan, a low-ARPU user
would typically spend Rs 100 per month
CTRs Click-through A way of measuring the success of a digital marketing campaign. In mobile marketing, this is often
rates associated with mobile banner ads placed on mobile web sites. The CTR of an advertisement is defined
as the number of clicks on an ad divided by the number of times the ad is shown (also known as
impressions), expressed as a percentage
For example, if a mobile banner ad is delivered 100 times (100 impressions) and receives one click, then
the CTR for the advertisement would be 1 per cent
Generally, a CTR of 2 per cent is considered very successful. However, most campaigns register an
average of 0.2-0.3 per cent. Advertisers typically pay more for a high CTR which should ideally be linked
with resulting high-purchase rates
GPRS General packet A mobile data access service through which mobile subscribers can access the mobile internet. Access
radio service is usually charged on the volume of data availed, typically charged per megabyte of web traffic
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accessed although many operators also offer bundle services, e.g. 5 GB per month for a fixed fee
Idle screen Idle screen A mechanism for placing a mobile ad (in the form of, e.g. banner ads, multi-media ads, etc.) when the
client client mobile users phone is idle in between accessing mobile web sites or while using online mobile games
or applications
MMS Multimedia A standard way to send messages that include multimedia content (such as pictures, ring tones or
message service videos) to and from mobile phones
RBT Ring back tone An audio clip that is heard on the telephone line by the caller while the mobile phone they are calling is
being rung. In Pakistan, RBTare typically popular movie and folk songs and are very popular with mobile
subscribers for a monthly subscription fee
Advertising over RBTwas introduced using a range of models across several commercial markets in 2008
in which typical rewards for the caller or the called party include discounted music ring back tone service,
free minutes, mobile calling credit, etc. in return for accepting ad messages integrated with music ring
back or for selecting advertisements instead of music as a personalized advertising ring back
SMS Short message A text messaging service of mobile communication systems that allows the exchange of short text
service messages, typically 160 characters in length
SMS short Short message Special telephone numbers, usually four to six digits long, used in mobile marketing campaigns where
code service short mobile subscribers can participate in any given campaign by sending a test message to the advertised
code short code. Short codes are widely used for VAS such as television program voting, ordering ring tones,
charity donations and mobile services
Messages sent to a short code can be billed at a higher rate than a standard SMS and may even
subscribe a customer to a recurring monthly service that will be added to their mobile phone bill until
they text, for example, the word STOP to terminate the service
In Pakistan, short codes comprise four digits and have to be purchased from the telecoms regulator.
Operators usually charge a premium for texting into the short code to recover costs and to generate
additional revenue
USSD Unstructured A protocol used for mobile internet browsing, mobile-money services, location-based services and
supplementary menu-based services which offers enhanced features as compared to SMS
service data
WAP portal Wireless A mobile web site designed specifically for access via the mobile phone or mobile device. WAP portals
application are usually a source of information and service oriented links and are designed to attract optimum
protocol portal mobile web traffic

About the author

Yasmin Malik is a Visiting Lecturer on Mobile Marketing Strategies at one of Pakistans
leading business schools, IBA. She completed an MSc in IT from the University College
London (UCL) in 1993. She has been a regular contributor of articles on mobile advertising
and wireless technology for local and international publications and has also regularly
engaged as a visiting lecturer/speaker on mobile technology marketing. Yasmin Malik can
be contacted at: ymalik@iba.edu.pk

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PAGE 14 EMERALD EMERGING MARKETS CASE STUDIES VOL. 2 NO. 1 2012