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Mobile marketing at Turkcell: Turkey's leading mobile operator

Article · January 2011

DOI: 10.1108/20450621111122309

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Aysegul Toker Kaan Varnali

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 BOĞAZİÇİ UNIVERSITY
Department of Management

MOBILE MARKETING AT TURKCELL

This case study is prepared by Ayşegül Toker, Kaan Varnalı and Cengiz Yılmaz (in alphabetical order)

solely to provide material for class discussion. The purpose of this case study is to familiarize

the reader with the mobile ecosystem and provide insights into the unique challenges and

benefits of this new interactive medium for marketing.

Graphics and information regarding the exemplary mobile marketing campaigns included in

the case study are provided by TURKCELL. No part of these materials may be reproduced

without written permission of TURKCELL.

During a seminar that took place in May 27, 2009 in Istanbul, Sureyya Ciliv, CEO of Turkcell,

was compassionately sharing his views with the audience: “The crux of our business is

changing from voice and SMS to the mobile Internet. We no longer see ourselves as a voice

carrier; we have redefined our business as a communication, technology and service

provider.” In the course of the last few years Turkcell managed to convert itself into a

successful mobile service provider. What are the drivers of this transformation? How do they

manage to keep their edge in mobile services? And most importantly, what is the secret
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recipe of their success in mobile marketing? This case study aims to shed light on these

questions and elaborate on the success factors of mobile marketing that are derived from

the Turkcell experience.

Company Background

Turkcell initiated its GSM operations in 1998. Since its establishment, Turkcell has

continuously increased the variety of its services based on mobile audio and data

communication, its technological infrastructure and as a result, number of subscribers. As of

December 31, 2008, Turkcell has made 7.7 billion US dollars worth of investment in Turkey,

which doesn't include the cost of the license. Turkcell now covers all the settlements in

Turkey that have a population of more than 2000 and also ranks among the top operators

globally in terms of GPRS roaming, with contracts signed with 380 operators from 151

countries. In addition to high-quality voice services, Turkcell currently offers General Packet

Radio Service (“GPRS”) countrywide and Enhanced Data Rates for GSM Evolution (“EDGE”) in

dense areas, which provide for both improved data and voice services. As of December 31,

2008, with its 36.4 million subscribers (7.8 million of which are post-paid), Turkcell is not

only the leading operator in Turkey, but is also the third biggest GSM operator in Europe in

terms of subscriber numbers. Turkcell’s average monthly revenue per user is $10.4 and

average monthly minutes of usage per user is 107.1. Turkcell's shares have been traded on

Istanbul Stock Exchange (IMKB) and New York Stock Exchange (NYSE) since July 11, 2000 and

it is the first and only Turkish company ever to be listed on NYSE.

Turkcell has investments in foreign countries as well. Turkcell's participations in Azerbaijan,

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Kazakhstan, Georgia and Moldova through Fintur, has reached 12.8 million subscribers as of

December 31, 2008 and its participation in Northern Cyprus has 300 thousand subscribers.

Turkcell holds the majority shares of Astelit in Ukraine, which started its operations in

February 2005 with its brand Life:). Life:) has reached 11.2 million subscribers as of

December 31, 2008.

Turkcell, as the leading operator of Turkey and nearby regions, entered the Board of

Directors of GSM Association (GSMA) in early 2003. With more than 750 members from 218

countries, and 4 billion subscribers represented by these members, GSMA speaks for the

world mobile communication market. The GSMA leads and coordinates the international

GSM industry, brings together operators and mobile phone manufacturers, application

developers and content/service providers onto the same platform. Additionally, as a

founding member of the Global Mobile Marketing Association, Turkcell assumes active roles

on the Association’s Board and its committees. Through its positions in these organizations,

Turkcell is able to follow global developments very closely and plays an active role in the

establishment of the new global strategies for the industry.

Drivers of Change in Mobile Business

The penetration rate of mobile handsets has well passed that of landline phone, PC-based

Internet and any other technological devices. The penetration rate of mobile handsets

exceeded 100% in Europe and in several Middle-East and Asia-Pacific countries. The

penetration rate in Americas is also rising steadily and is currently above 80% [1]. The

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household ownership rate of mobile phones in Turkey has exceeded 80% by the end of 2008,

which is much higher than that of PCs and laptops, being 27% and 8.5% respectively [2].

Globally the total number of mobile subscribers has reached an astonishing number of 4

billion, representing a huge business potential.

Mobile phones were originally introduced as a new modality of interpersonal

communication, allowing continuous communication on the move. First generations of

mobile phones were technologically limited devices that only allowed basic voice and text

based communication and storage of basic contact information. Now device manufacturers

are introducing true hybrid mobile handsets, called smart phones that can mimic various

features of laptops. It is expected that all mobile handsets will be smart phones within 4

years. Recent developments in the mobile technologies converted the mobile channel into a

complex interactive environment in which business entities launch various kinds of

marketing initiatives utilizing text messaging, multimedia services and the mobile Internet.

In the present era, profit margins from mature voice markets are falling, and customer

demand for converged and differentiated services as well as devices is mounting. Therefore,

in order to sustain operating margins, it has been crucial that mobile network operators

differentiate and enrich their range of services with a consumer-centric approach.

[1] Juniper Research (2008) Mobile Advertising Strategies and Forecasts.

[2] Turkish Statistical Institute (2008) ICT Usage Statistics.
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Value Propositions of the Mobile Medium

Mobile marketing is about serving the mobile consumer ubiquitously by addressing

expressed or latent needs anytime, anywhere through the mobile medium. Unlike any other

existing media, mobile marketing enables distribution of interactive and highly personalized

information to the target consumer at the most effective time, place, and in the right

context and provides an unprecedented opportunity to establish a direct link with the

consumer. Mobile marketing will offer unique value propositions to both consumers and the

advertisers if and only if its true essence is properly understood by all players of the mobile

value chain. Otherwise, delivery of unsolicited and untargeted messages will not only

damage the advertiser brand, but will also create negative attitude toward mobile

advertising phenomena as a whole.

Mobile services provide unique value propositions to customers in terms of convenience

(the agility, flexibility, and accessibility provided by mobile devices), ubiquity (omnipresence

of information and continual access to commerce), localization (role/situation congruence of

message delivery) and personalization (preference/profile congruence of message delivery

and the use of personalized mobile device as a tool for self-expression). The importance of

understanding consumer-centric value propositions of the mobile medium is crucial in

mobile marketing due to the fact that mobile devices are highly personal in nature and

sometimes are considered as a part of the extended self. In all other marketing channels,

consumers may choose to ignore or get away from advertising if they are not interested in it

or do not like it. However, when the ad is delivered to the mobile handset, it requires an

action on behalf of the consumer (at worst case it is the deletion of the message from the

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memory of the device) and the consumer is always notified about the delivery. Due to this

very personal and “always on” nature of the mobile devices, the foremost success factor of

mobile marketing is that it should be permission-based. If consumers have given their

permission, they will be anticipating the marketing message, hence are less likely to take

marketing as intrusive [1]. Prior explicit permission for mobile marketing is so critical for the

brand that without it, mobile marketing messages are at best ineffective, and at worst could

reduce the brand equity by causing resentment and irritation [2]. In short, a successful mobile

marketing campaign requires that consumers should have to ‘opt in’ before they receive

mobile advertising messages of any kind, have the ability to control timing, frequency and

content of the message and have the option to ‘opt out’ at any stage.

TABLE 1: Advantages over Traditional Media

- Measures of success are more detailed and reliable
- Allows live campaign measurement and tracking
- SMS advertising is extremely cost effective
- Allows ultimate one-to-one marketing
- Allows ultimate targeting and personalization
- Highly interactive
- Has immediate impact: instant customer response
- Allows role/situation congruence of the message
- Allows situational/location-based targeting
- Response rates are generally over 10%
- Ads can be stored in the memory of handsets
- Allows immediate sharing of messages among peers
- Can be effectively integrated with other media

[1] Godin, S. (1999) Permission Marketing: Turning Strangers into Friends and Friends into Customers. NY: Simon & Schuster. 6
[2] Barwise, P. & Strong, C. (2002) Permission-based mobile advertising. Journal of Interactive Marketing, 16(1); 14-24.
Factors that may mitigate intrusiveness and foster acceptance include permission (the level

of user control), message content (relevance, design and incentives), the situational context

(time and location in which the mobile ad is received by a consumer), the level of viral effect

(self-expressive elements and source of communication), operator reputation and credibility,

device technology, transmission quality and the level of social influence (the level of

adoption of the mobile service among peers and significant others). Additionally, personal

characteristics of target consumers (e.g., demographics, value tendencies, personality traits)

usually influence the success of a particular mobile marketing initiative. People with

different profiles may have divergent perceptions regarding the utility, emotional appeal or

relevance of the same mobile marketing practice. For example, young people use mobile

phones primarily for socialization and convenient entertainment rather than informational

and purchasing reasons, which are more appealing to older and more educated users.

Similarly, social norms and intrinsic motives such as enjoyment are important determinants

of usage among female users, whereas extrinsic motives such as usefulness and

expressiveness are key drivers among men [1]. Therefore, effective targeting and

personalization is the key to make marketing messages increasingly relevant for the target

consumers and hence is one of the most important factors in affecting consumers’ attitude

toward mobile marketing.

[1] Nysveen, H. Pedersen, P.E. & Thorbjørnsen, H. (2005) Explaining intention to use mobile chat services: moderating
effects of gender. The Journal of Consumer Marketing, 22(4/5), 247-257. 7
TABLE 2: Success Factors of Mobile Marketing

Message Content:
• should be short and to the point
• should employ language understood by the target group
• should be funny and entertaining
• should be attention grasping
• should be interesting and relevant for the target group (highly personalized)
• should be actionable (interactive and calling to action)
• should be simple and easy-to-use
• should include incentives (instant win or lottery)

Message Delivery:
• should be permission-based
• should be contextually congruent (time & location)
• should be inexpensive to receive
• should utilize the most effective mobile application type for delivery of the message
with respect to the target population, the message content, and the promoted brand
(e.g., SMS, EMS, MMS, IVR, CBC, WAP)
• integration with other media may increase awareness and result in synergy

The Viral Effect:

• messages should seem as little as advertising as possible
• should provide incentives for sharing
• should relate to humor, community events, causes, gossip, discounts and news that
are interesting and relevant for the target community
• should be easily transmitted via mobile handsets
• would help if the message can convey friend status information such as where the
person is, what the person is doing and with whom.

Other Facilitators:
• operator reputation and credibility (reduces privacy and security concerns)
• general attitude toward m-advertising among the members of the target community

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The Birth of Mobile Marketing Department of TURKCELL

Foreseeing the imminent conditions of the mobile ecosystem, Turkcell has set its strategic

target as transforming itself from a traditional mobile voice carrier into a mobile services

provider. Such a major reformulation of business scope was not only necessary for the

establishment of a closer relationship with its customers, but was also a smart strategic

decision which placed Turkcell at the heart of the proliferating mobile value chain. This

positioning would enable Turkcell to capture a more lucrative portion of the revenues

generated through the mobile medium.

In line with its strategy, Turkcell has initiated mobile marketing practices in 2002 with

launching lottery campaigns for its corporate clients in FMCG sector. In 2004, Turkcell has

successfully executed 74 mobile marketing campaigns. The number reached 167 in 2005. In

2005, it was decided that mobile marketing had a very promising future and a huge business

potential that it required an exclusive department which will be responsible for the

development and execution of mobile marketing initiatives and the maintenance of the

relationships with corporate clients. The number, variety and effectiveness of mobile

marketing campaigns increased with a rapid rate after the establishment of the mobile

marketing department. In 2006, Turkcell has launched 296 mobile marketing campaigns for

more than 120 brands (e.g., Coca-cola, Sprite, Pepsi, Cola Turka, Garanti, Efes, Akbank,

Cheetos, Shell, Total) from 30 different industries. In 2007, more than 17 million unique

subscribers have engaged in at least one of the 370 mobile marketing campaigns executed

by Turkcell. The response rates of Turkcell’s mobile advertising campaigns vary between 5%

and 25%. The average response rate is 9.2%, which is much higher than direct marketing or

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traditional advertising methods. Apart from being directly involved in the design and

implementation of mobile marketing campaigns, Turkcell actively participated in various

international and local marketing conferences, organized workshops and seminars with

global brands and universities in order to educate the market about the unique benefits of

the mobile medium and facilitate the adoption of mobile marketing practices.

The strategy paid off and the shares of value added services and mobile advertising in global

revenues of Turkcell started to grow steadily. By the end of 2008, data traffic has increased

almost three fold when compared to the previous year, and Internet revenues grew by 90%.

Turkcell, maintained its regional market leader position and rightfully earned its honorable

place among the global industry pioneers in mobile marketing practices. Its achievements so

far have been recognized with numerous international awards and prizes. Turkcell entered

the INFO Tech 100 list in 83rd place in 2007, on which it has been listed for four years in a

row. Turkcell won the first prize in the Best New Service category in World Communication

Awards 2002, with its "GPRSLand" service. Turkcell’s “Tone & Win” mobile advertising

platform has won the top award in the “Best Mobile Advertising Service” category at the

14th GSMA Global Mobile Awards, and selected as the “Best Ad Campaign” in MEFFY

Awards’09.

Now let’s put things into perspective. What is the secret recipe for Turkcell’s success in

mobile marketing? The answer is simple: Consumer-centrism and innovation. Turkcell has

successfully internalized the consumer-centric approach. It is evident from Sureyya Ciliv’s

following statement: “When designing our services, we first try to understand the value

proposition of mobility for our customers. It is tremendous. However, our customers will not
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be tempted by the technological buzz. The customer cares about one thing: What is in it for

me? And can I have that solution at a reasonable price in a very simple user interface?”

Targeting & Personalization in Turkcell

The most important factor driving the success of Turkcell in mobile marketing is its effective

permission-based customer database. Turkcell has one of the biggest permission-based

databases in Europe both in terms of the number of opt-in subscribers, 9 million as of

December 2009 and the level of data richness. The database contains personal information

about subscribers such as demographics (e.g., age, gender, income, education, occupation,

marital status), expressed preferences (e.g., favorite sports club, leisure activities, holidays,

music and media interests, community memberships, type of Internet access, car

ownership), mobile device characteristics (e.g., brand, model, device capabilities), and prior

behavioral records (e.g., prior transactions, responses to marketing efforts, navigational

data). Since its launch in 2005, subscribers opted-in to this database via SMS, call center,

Turkcell retail shops and Turkcell’s web site. These opt-in channels provide consistent

platforms that allow consumers to register their preferences and permission levels for a

broad range of marketing communications. Turkcell allows users to easily opt-out through

these channels as well. In order to expand its permission-based database, Turkcell awards

users with credits and airtime on the basis of joining the permission-based database.

Utilizing its effective permission-based database, Turkcell creates consumer segments having

distinct profiles based on demographics, needs and interests, and targets consumers based

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on their profiles. Consumers receive marketing messages that they are interested in through

the most suitable mobile channel for them (e.g., IVR, SMS, MMS, WAPPUSH, interactive

menus, and mobile coupons). Consumers are also selected on the basis of their prior

response patterns. If they do not respond to specific categories, then they are not contacted

on similar categories accordingly. In order to minimize intrusiveness, mobile ads are

delivered maximum once every two weeks. Further, incentives and promotions are

embedded into mobile campaigns to create better consumer experiences and to increase

response rates. It is ensured that consumers only receive relevant advertising messages that

include attractive offers and benefits from advertisers. Annual consumer satisfaction

researches show that consumers are highly satisfied, and they want to continue to be

included in Turkcell’s permission-based database.

Exemplary Mobile Marketing Practices of Turkcell

Tone & Win

Turkcell’s Tone & Win (TonlaKazan) is the world’s first ringback tone (RBT) advertising

platform which was recognized by the CEO of GSMA, Rob Conway as “an outstanding

achievement in an industry renowned for innovation”. Since its launch in May 2008, the

number of its members has grown to over 200,000. Using the Tone & Win platform,

members personalize their ringback tone by selecting the advertisement music of the brand

of their choice and let their callers listen to a branded ringback tone instead of a regular ring

tone. In return they win airtime or credit depending on the amount of time their callers

listen to their RBT advertisement music. Tone & Win is exclusively permission-based.
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Subscribers do not only explicitly opt-in to become a member of Tone & Win platform

through Web, Wap, and SMS channels, but also select their branded content themselves.

Tone & Win’s performance-based pricing model, Cost per Listening (CPL), charges the brand

according to the amount of advertising that has been listened to, thereby providing a

completely measurable channel opportunity. As a result, Tone & Win offers value to all

involved in the mobile ecosystem.

Fifty different brands have launched 72 campaigns using the Tone & Win platform with a

minimum of two weeks duration since May 7, 2008, including Coca Cola, Unilever, P&G,

Nestle, Warner Bros and major national Turkish brands such as Is Bankasi, Garanti, Akbank,

Digiturk, and Arçelik. At the end of each Tone & Win campaign, Turkcell offers brands

exclusive reports containing members’ demographics, socioeconomic status, total

impressions and total branded RBT seconds listened to by callers.

Tone & Win allows targeting as well. An example of a successful targeted advertising

campaign created through Tone & Win was the launch by Warner Bros of a James Bond 007

Quantum of Solace branded RBT in November 2008. Only those Tone & Win members who

were between the ages of 13-54, male, and living in the 26 Turkish cities where the movie

launched were given the opportunity to select this jingle for their social community.

Combining the power of simplicity with a value proposition to all involved in the mobile

ecosystem, Tone & Win creates an unconventional, unique and innovative media channel for

advertisers to garner brand recognition. The success of Tone & Win highlights the

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importance of innovativeness and creativity in design of new mobile applications and

services.

Renault Symbol

Turkcell launched a mobile marketing campaign to promote and increase brand exposure of

Renault Symbol just before the Auto Show, Istanbul. Auto Show tickets were used as an

incentive to encourage targeted users to engage in an MMS quiz about Renault Symbol. The

target audience was selected among subscribers registered in the permission-based

database who are male, over 25 years old, with a registered billing address in Istanbul, have

been in Istanbul within the last month, own a car, participate in fuel-oil campaigns, send or

receive at least 5 MMS per month, and who have attended Formula 1 and/or the CNR Auto

Show in 2007. The return rate was over 5% and all the tickets were given out within the first

20 minutes of the campaign. The design and implementation of this campaign was in line

with the success factors provided in table 2. The message content, design and the delivery

method (MMS) were all appropriate for the target audience. The receivers were familiar

with MMS, the message content was highly relevant for them, and the campaign included a

strong incentive. Furthermore, the message was highly interactive which required

participants to think and/or learn about Renault Symbol.

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 Figure 1. Renault Symbol MMS Campaign

Gillette – Carrefour

In another mobile marketing campaign, Turkcell leveraged the location attribute to maximize

contextual congruence of the message. In the campaign illustrated in figure 2, below,

Turkcell delivered an interactive message to the mobile users who are selected from its

permission-based database on the basis of their proximity to the Carrefour store in

Umraniye, Istanbul. The users were asked to select one Gillette product and immediately

received a mobile discount coupon that can only be used in the nearby Carrefour store.

Figure 2. Gillette mobile marketing campaign

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Société Générale

In terms of return rate, the SMS campaign launched for Société Générale smashed existing

records. The target audience selected from Turkcell’s permission-based database was

informed that the bank accepts personal credit applications up to 30.000 TL via SMS (that

includes user’s national identity number). The text message included information about the

attractive interest rate and extended due date. As a result, 20% of the respondents have

applied for a personal loan. The foremost important drivers of success in this campaign were

effective targeting, message design and purpose-application fit. The receivers were male,

between the ages of 25 and 50, living in Istanbul, Ankara and Izmir, were heavy SMS users,

with monthly bill less than 100 TL and were not members of CampusCell, the billing tariff for

university students. The target audience consisted of subscribers who would most probably

be in need of a medium sized loan and were highly comfortable with using SMS. The

message body was short, to the point, and easy to read through. Most of the time, an

important challenge for a mobile marketer is to choose the appropriate mobile application

type for different marketing purposes, brands, messages, and target customers. In this case,

the use of SMS proved to be very successful in facilitating customer response due to the fact

that it provided a much more convenient way to apply for a personal loan, especially when

compared to the alternative that requires visiting one of the bank’s branches, which involve

lots of paperwork and waiting.

Analysis of factors driving the success of aforementioned mobile marketing practices would

contribute to a better understanding of the consumers’ value creation process through

mobile marketing and provide hints that may be considered as best practices.

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Closing Up

As Sureyya Ciliv stared out the window at his office looking above the beautiful city of

Istanbul, he tapped his fingers on his smart phone and thought about the unbelievable rate

of the technological improvement that occurred within his lifetime. “Our generation has

witnessed the introduction of color TV, landline telephones, room-sized computers, the

miraculous fax and the life-changing Internet. Within the last decade all of those were

squeezed into our pockets and now we treat them as simple commodities of life. We have

just completed the transition to 3G networks and 4G is on our doorstep. I wonder what

challenges it would bring to us. The farther we get ahead the more our customers will expect.

Furthermore, our followers will be waiting to take advantage of an instance of distraction or

lethargy. That’s why we should keep on innovating and pioneering the change in our

industry. Taking a break is a luxury that we cannot afford.”

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Figure 3. Wapsite of Tone&Win
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Figure 4. Website of Tone&Win

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