Content may be king on the worldwide web, but in the wireless arena, it wields even more power. The mobile network operators have known this for some time, hence their early forays into WAP portals with the likes of Vizzavi (Vodafone) and Genie (BT, now O2), and their current explorations of ringtones, Java games and picture messaging through initiatives such as Vodafone live!
Without content, a network provider is just a big pipe that connects calls and callers; it can only differentiate itself through price and brand values. Handset manufacturers, on the other hand, have the advantage of the phone as fashion accessory or gadget - they can market the stylish qualities of the phone, its technological advantages, its size.
But they too are beginning to catch on to the importance of content as a marketing, loyalty and added-value tool. Nokia was the leader here - it has been running its Club Nokia global loyalty programme since 1998. And now the UK's second-most popular mobile phone brand, Samsung, is following suit, with a seven-figure investment in the Samsung Fun Club (www.samsungmobile.com).
The club launched in November in five European countries, including the UK, in which it now has 75,000 registered members, 80 per cent of whom own Samsung handsets (the most popular being the T100). Members without Samsung phones can sign up as a 'friend', whereas Samsung owners become full members.
The site, which offers free downloadable content for both Samsung and other handsets, as well as online content such as games and e-cards, has so far seen more than 200,000 content downloads in the UK, more than any of the other European countries. The most popular elements are ringtones, screensavers and a free SMS service.
Members use a points system to purchase content; a Java game, for example, costs about 100 points. Samsung handset owners receive 300 points when joining the club; points can also be won through competitions and surveys.
"Content is a great way to differentiate our handsets from others," says Imogen O'Rorke, who was brought in as content manager at Samsung Mobile to launch the site in the UK. "People may have bought Samsung phones because they are stylish, but in the future, the focus will be on content."
O'Rorke's background as a founder member and content director of teen gossip web and mobile service Rabbit-On (www.rabbit-on.com) means she has a thorough knowledge of mobile content, including games, WAP and ringtones.
"There is a three-pronged plan behind the Fun Club," she explains. "It will act as an elaborate CRM tool to increase loyalty, it will enable us to find out more about our customers and encourage them to upgrade and it will add value to the handsets."
Samsung aims to attract 300,000 UK subscribers by the end of the year and plans to launch sites in Scandinavia, the Eastern bloc and the Netherlands.
While the club is a new initiative in Europe, it is building on a content service that has been offered in Korea for two years and has "a couple of million members in China and Korea", according to O'Rorke.
At launch, Samsung Fun Club UK focused on 25- to 34-year-old young professionals, a group that makes up 38 per cent of Samsung handset owners in this country.
But the strategy is changing in 2003, and the site will focus on the 18- to 24-year-old market, which currently accounts for about 21 per cent of Samsung handset owners, but is expected to be a growth area.
O'Rorke, who has just returned from Germany, where the Samsungites responsible for the local fun clubs gathered to share strategic plans, knew from launch that local content would be important, even though the Fun Club is a pan-European initiative. "From the beginning we decided to partner with local content providers in the UK," she says. "Certainly the UK market is ringtone-happy, which drives downloads and registrations, and Samsung has a bigger share of handset sales in the UK (10.9 per cent) than in some countries.
But I think our focus on local content has done a lot to drive downloads."
Partnerships in the UK have included tie-ups with United International Pictures (UIP), The Mirror newspaper, mobile portal uboot.com, Arsenal Football Club and Warner Music. "Research has shown that the owners of Samsung handsets have an above-average interest in movies, PC gaming and music compared with other mobile phone users," explains O'Rorke.
The link-up with uboot UK, which has more than 1.3 million registered users, was an obvious way to get the Fun Club established as a content portal in the minds of mobile users. The three-month cross-media deal saw Samsung sponsor the polyphonic ringtones section on uboot, run competitions and sponsor the text message service, so that Fun Club branding appeared on every text message sent from the portal.
"The beauty of this type of SMS advertising is the relationship between sender and receiver," says James Simcock, online manager at uboot UK.
"They are friends, which means the emotional buy-in to the message is greater - the person is more likely to open, read and remember the advertiser's message."
The promotion with Warner Music, which marked the first time the company had formed a content partnership with a handset manufacturer, centred on a 26-piece indie pop Texan outfit called The Polyphonic Spree. "Yes, we did choose them because of the name," admits O'Rorke. "It seemed like a fun thing to do. We gave them some A800 phones and they went on TV and waved them about." Samsung also promoted exclusive Spree ringtones and screensavers to club members and ran a 'name that tune' promotion, advertised on XFM's web site. The campaign, which highlighted 16 polyphonic ringtones, resulted in 7,500 downloads and 2,559 clickthroughs from the ads.
The joint venture with UIP earlier this year allowed Samsung to offer Eminem polyphonic ringtones via a microsite attached to the Fun Club.
The promotion, which centred around the film 8 Mile, was advertised via leaflets distributed to 100 UIP cinemas and 200 UK skate stores, as well as via the uboot.com newsletter, Vizzavi's web site and NME.com. It resulted in 6,600 downloads and 13,733 clickthroughs, and grew membership of the Fun Club by about 450 new members a day.
Another music-related promotion saw Mirror readers offered a free ringtone every day for a week. Some 34,000 ringtones were downloaded, and the Fun Club's membership quadrupled.
As well as forming new content partnerships, Samsung has been able to build on existing links. The mobile manufacturer exploited its relationship with Arsenal - it is the club's official handset supplier - with a Fun Club-branded microsite on Arsenal.com, offering the chance to win an Arsenal phone loaded with content such as ringtones, colour images and screensavers. Fans could also download Arsenal content by joining the Samsung Fun Club, and 2,000 did so.
The Arsenal deal is an indication of the way Samsung hopes to integrate the Fun Club within its overall marketing and business strategy. To this end, it intends to tie club content closely to its schedule of phone launches to persuade club members to upgrade and to promote new models. The launch of a 40-track polyphonic phone this month will be met by increased ringtone activity on the site, for example, while the launch of a camera phone, the S100, will be backed by the launch of an online Camera Club. This will let members upload pictures, use MMS and manipulate pictures with a Photoshop-like tool; the company is looking for a sponsor for this area of the site.
Much of the Fun Club's content is generated by wireless specialist Mobile Streams. "We have musicians in-house who come in and tap on their midi keyboards to create the ringtones," says Mobile Streams chief executive Simon Buckingham. "R&B and hip-hop seem to do well as ringtones."
The company is currently creating 40-track ringtones for the launch of the latest Samsung phone. "Samsung is quite far ahead in terms of technology; a 40-track ringtone lets us add drums and percussion and create something quite different from the tinny tones of normal ringtones," adds Buckingham.
"Samsung is in the best position to launch up-to-date content, because it knows the exact specifications of its new phones and can pass these on to content partners prior to their launch," he points out. "The Fun Club is a way for Samsung to show off its technology and build its reputation."
The Samsung Fun Club will always suffer comparisons with Club Nokia, but O'Rorke thinks there is more to the scheme than 'me-too'. "We are similar to Club Nokia in that we both offer a range of content in the form of a loyalty programme," she admits. "But Club Nokia has until now been centralised in Finland, whereas we are focusing on local markets.
Also, our content is free; we offer a free SMS service, and we are pro-actively going out to the operators to work with them."
Samsung has already created a co-branded one-stop-content shop web site for O2 called the O2 Fun Lab, which is available both through O2's web site (www.o2.com) and the Samsung Fun Club. Fun Lab content is paid-for, with an even revenue split between the operator and the handset manufacturer.
"We want reciprocal links with all the operators," says O'Rorke. "For example, leaflets about the Fun Club in the boxed packages they sell. We are trying to get people familiar with mobile services, " she explains.
The plan is that the Samsung Fun Club will recognise if a member is, say, an Orange or an O2 customer and present them with links to that content shop.
Samsung is also targeting content developers with a Developers Club accessible via the Fun Club. This provides technical information and downloads such as a Samsung Java Emulator for content providers, which the company hopes will encourage them to come up with more content for the Fun Club.
Plans include a greater emphasis on the internet as an ad medium, according to O'Rorke, who is in talks with a creative digital agency to develop ads for the Fun Club. Last year's marketing budget came from a centralised pot, but this year it will be up to individual countries to promote their own sites. There are also plans to increase the club's presence at point of sale. "At the moment it is more of an after-sales tool, but in 2003 we will focus on point of purchase and use it to drive sales."
Mobile Stream's Buckingham says the main challenge facing Samsung in the 3G world is to move away from hardware and get into software. "Samsung is a manufacturing company and it is the job of partners to get it into the content arena and maximise sales. These smart phones are all very well, but without content, services and software, they're dumb phones."
About Samsung
- Samsung Group comprises Samsung Electronics (including Samsung Mobile), Samsung Card, Samsung General Chemicals, Samsung Life Insurance, Samsung Securities and trading arm Samsung Corporation.
- Samsung is the third-biggest manufacturer of mobile handsets, accounting for 9.5 per cent of the market worldwide. It is the UK's second-most popular mobile phone brand, with 10.9 per cent of the market.
- In addition to mobiles, Samsung Electronics manufactures DVD players, TVs, digital cameras, microwave ovens, refrigerators, air conditioners and washing machines.
- Samsung Electronics entered the UK market in 1984 with the opening of Samsung Electronics (UK), headquartered in Surbiton, Surrey, which now turns over in excess of £300 million and employs 120 staff.
- Samsung Electronics saw a turnover of £16,860m and a profit of £1,534m in 2001.
Vodafone has ties with more than 50 content partners
Vodafone launched its Vodafone live! content service in October 2002 to give its users access to a mix of paid-for and free content including ringtones, games, messaging services, news, horoscopes and commerce.
The service is accessible by WAP phones, but is targeted at consumers with next-generation phones that have colour screens, picture messaging capabilities and polyphonic sound.
Picture messaging and content browsing were offered for free for the first three months after launch, with charges introduced in February 2003.
"Previously we tried to supply our own-branded content, but we realised that customers want to see the brands they know, so we are setting ourselves up as the channel and charging system, rather than the content provider," explains Geraldine Wilson, MD of Vodafone Content Services UK.
Vodafone and its content providers split revenue in a 40:60 share; the company has made various price-bands available to content providers, allowing them to choose what they charge.
Vodafone live!'s 50-odd content providers include Dow Jones & Company, The Times Online, Multimap and The Sun Online.
Future plans include the introduction of multi-player games, allowing Vodafone customers to play against others on the network.
While Vodafone live! can be accessed on a number of phones, including the Nokia 7650 and the Panasonic GD87, its main handset partner is Sharp, whose GX10 model has a button that when pressed takes users directly to the Vodafone live! menu.
Club Nokia offers content to members in 26 countries
Since Nokia launched its Club Nokia global content portal and loyalty programme in 1998, it has become a major part of the handset giant's CRM strategy.
Members of Club Nokia, which is available in more than 26 countries, can access content including games, ringtones, photo manipulation, screensavers and badges.
Universal Studios is one content provider to have partnered with the club. Members can download graphics, ringtones, text messages, picture messages and mobile games relating to more than 100 of Universal's film and TV titles and franchises, including The Mummy, the Jurassic Park trilogy and Back to the Future.
"The mobile market is an increasingly important part of our overall marketing strategy and this multi-year partnership with Club Nokia gives us tremendous reach in the wireless world," says Kevin Campbell, senior vice-president of new-media marketing at Universal Pictures. Another content provider is Lucasfilms, which has made Star Wars features available to Club Nokia.
One of the ways in which Nokia drives membership of the club is through Nokia Game, an annual multimedia global extravaganza and marketing exercise.
The theme of the game tends to fit in with a certain aspect of mobile content, such as picture messaging or polyphonic sound. "It fits well with the Nokia brand promise of connecting people," says Charlotte Fionda, marketing manager at Nokia Phones UK. "Being fun, it helps people interact more with their mobile phones and introduces them to new technologies."
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