NEW YORK-Stockholm-based Iquity Systems has established a U.S. headquarters near Wall Street to promote its Mobile Media Suite, which delivers recorded advertising messages to wireless customers interested in getting discounts on airtime in exchange for listening to 10-second promotional spots.
The company, which has about 200 advertisers and 500,000 wireless subscribers using its service overseas, recently hired John Balsamo as director of sales and marketing for North America. Prior to joining Iquity Systems, he was sales director for Nortel Networks. He also has served as director of national sales for SpectraSite Communications and global account manager for Allgon Telecom Ltd.
“It’s been easy for carriers to attract new customers to this service. It’s more difficult to convince the media side that this is a real opportunity,” said Kicki Wallje-Lund, chief executive officer.
Wireless carriers gain several benefits from using the software, she said. First, they attract “cold prospects,” those people who might otherwise not subscribe at all to cellular or PCS service. Because some of their minutes of use are free, these customers use about 15 percent to 20 percent more airtime, including that which they must pay for. Subscribers to this service have lower churn rates.
Carriers also receive additional revenues from advertisers, based on the number of responses to the ads. Because the system is interactive, advertisers know immediately the response rates, typically in the range of 30 percent, which is very high, Wallje-Lund said.
“These are targeted campaigns based on the profiles customers submit. Bouygues Telecom in France offers this to its prepaid customers, who must (each) answer 40 questions, so Bouygues knows a lot a bout them,” she said.
In a recent survey, more than 97 percent of Bouygues Telecom’s several thousand Mobile Media Suite customers said they would like to keep the service and would recommend it to friends, Wallje-Lund said.
Each carrier using the Iquity software has designed its program in a slightly different manner. Bouygues customers on this program get all their calls for free. In exchange, a 10-second ad airs 90 seconds into the call they have placed. If the call recipient also is a Mobile Media Suite user, that person will hear an ad tailored to the profile he or she has provided to Bouygues. If not, the person on the receiving end of the call will hear an advertisement with a more general focus.
Other operators have set up the system so that subscribers get a bundle of minutes of use that are subsidized by advertising and those they pay for themselves. By typing in a prefix before dialing outgoing calls, the customer can select which minutes to use. Free calls are interrupted 90 seconds from the start for the promotional spots.
After hearing the advertisement, subscribers can punch in a single digit to indicate several choices from rejection to a request for more information once their call is completed to automatic ordering. In a trial with BT Cellnet in the United Kingdom, Pizza Hut found a high success rate with people pressing the number one to order food. Likewise, Calvin Klein generated a good deal of foot traffic and ancillary sales at its Bond Street store in London because its promotion offered a free gift to wireless customers who pressed the number one after hearing its ad.
However, BT Cellnet has not been able to expand this program until it can resolve compliance with federal regulations, which define advertising-subsidized telecommunications as value-added services, which must be separately licensed, Wallje-Lund said.
In late July, Polska Telefonia/Era GSM will launch service. South Africa’s MTM, which already has trialed the Mobile Media Suite, plans a commercial rollout in the fall.
“MTM has a close relationship with a media company, which is working on all the campaigns. … Mobile carriers are not experts in designing campaigns, but when they have a good partnership with a media company, they are successful,” Wallje-Lund said.
Companies like Citroen, Credit Lyonnais, Proctor & Gamble, Toshiba, Unilever, Warner Brothers and Yahoo! are among the 200 advertisers that so far have disseminated promotional spots via Mobile Media Suite.
“Our target customers are mobile operators and other companies, like retailers, with loyalty programs. Already in Europe, retailers are looking for new channels to address their customers, and this is a way for them to brand their own phone service,” Wallje-Lund said.
Iquity Systems, founded in 1995, “has been ahead of its time, but now the market is ready for us,” she added.
