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Getting something for free is always attractive for consumers, and it is the driver behind many of the ad-funded models we’re seeing these days.
One of the first mobile companies to give away free services in return for watching ads was Virgin Mobile US, with their SugarMama program. The youthful demographic of Virgin Mobile was the perfect group to offer free airtime in return for their subscribers’ attention.
We had a chance for an in-depth discussion with Scott Kelliher, Director of Mobile Advertising at Virgin Mobile US. Scott explained the details of the service, what works the best, and how customers feel about it.
“Sugar Mama is an online and on-phone application that allows users to interact with different kinds of branded content in exchange for free air time.” This is Scott’s one-line description of the service that has been giving away free airtime to Virgin users for the past 2 years. The user base is rapidly approaching 750,000 users, and there have been millions of free airtime minutes given away.
Even though the consumer payoff is always mobile minutes, one of the key things about SugarMama is that it is actually a multiplatform service – customers can earn the minutes both online and through mobile.
This model was driven by consumer habits and the needs of brands. Scott explains, “we work with brands that want to reach Virgin Mobile users, and normally they don’t want to reach them in only one way – just online or just on the phone – they want to reach them period. So we’ve designed our media programs to live the way our users live”.
The SugarMama Approach
Although most people in the mobile advertising business have probably heard of Sugar Mama, the details of the service are much less known. SugarMama actually consists of three different platforms.
AD TIME
In the online environment, the simplest program is called AD TIME. This is a rich media forum that lets user interact with branded content (ads) in various forms including video, flash games, even full fledged micro-sites.
The value proposition for the users is “a minute of your time for a minute of airtime”. The user signs up for the service, interacts with the branded content, and receives free airtime. So if the advertisement takes a minute, the user is awarded a free minute of airtime.
Comparing 2 potential logo designs.
The way it works is an advertiser sends a fully branded SMS message to a user, and asks for some type of response. This response might be a key word, a trivia fact, or anything else the brand wants.
The consumer then receives a second fully branded SMS and is awarded a free minute of airtime. The platform supports customized dialogues, so the follow-on messages can be set to vary depending on the what the user has sent in their response.
“Strategically, what we are trying to do is to establish a dialogue between the users and the brands that we are working with” Scott explained.
For the consumers, the payoff is two-fold: first, they get a minute of airtime for each of the TEXTIME messages they respond to. Secondly, they get exposure to interesting advertisements.
Brand View
The reaction of brands has been very positive. The reason they like it is that SugarMama is delivering more than just impressions, its all about engagement: “Advertisers love this: the opportunity to interact and get deep levels of measurable engagement with our users is something that they really like.”
Most of the brands that advertise do so on both mobile and online because in fact their customers live in multiple environments. According to Scott, “the brands that have been the most successful using SugarMama are those that are really interested in reaching the users, and so take full advantage of the different touch points.”
Scott continued, “Sugar Mama caters to the young at heart, aged 13 to 34.” Not surprisingly, many of the brands that have been successfully using SugarMama are in categories that naturally appeal to the Virgin Mobile demographic. Specifically, the QSR category (Quick Service Restaurants), health and beauty, and fashion have all done very well.
Subscribers Like It
An interesting question I’ve heard people ask is if users are getting paid to watch the ads, then can the ads really be effective?
A revealing statistic from SugarMama is that the online Click Through Rate is over 5%. This is more than 10X normal online CTR and means that the users – after having seen the ad and having already earned the airtime – are still genuinely interested and want to go on to learn about the product that was advertised.
Scott explains, “Customers have taken an active decision to go watch ads when they sign up for SugarMama. They knew there will be ads, so they are much more receptive to the messages they see.”
The Facebook Widget
Just recently Virgin Mobile decided to tap into the growing popularity of social networks with a Facebook application called “Fund My Phone”. The basic idea is that SugarMama subscribers download a widget, place it onto their Facebook page, and then select some ads that they would like to “share”. When their friends visit their page, the friends can choose to watch an ad and thereby earn airtime minutes for the subscriber. (read a more complete explanation with screen shots here).
It’s still early days for the Facebook widget, so no numbers are yet available, but Scott says it is receiving great feedback from both subscribers and brands:
The Future
While Scott understandably could not share specific future plans for SugarMama, he is very bullish about mobile advertising in general, though with one note of caution:
“Its going to be a really good time. We as an industry seem to be getting better and smarter at working with our brand partners, and helping them best utilize the platform. But, we still have to do a good job of educating and evangelizing what the mobile platform has to offer.”
It seems that giving people something they value for free is proving to be a very strong incentive in the mobile world. And doing that while simultaneously enabling a brand to communicate with a targeted consumer group will continue to be a winning strategy.
(For more on the power of “free”, download the white paper by Universal McCann- Welcome To The Free World!
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