At Virgin Mobile's Sugar Mama program, there is a hard value placed on the time a visitor spends with a sponsor's ad. "The general value is one minute of your time for one minute of air time credits," says Scott Kelliher, director of mobile advertising. Users of the youth-oriented carrier come to the Virgin Mobile site, view ads from Ultramercial, and get pre-pay credits to their wireless account. And the company is not wanting for takers. According to Ultramercial, over 425,000 customers subscribe to the program, which has given away over 10 million free minutes. Kelliher says about 1,000 new users sign up a day.
Advertisers include Pepsi, Xbox, New Balance, Subway and about a dozen others. Kelliher says the average clickthrough rate on the ads is 5.5%, and the most successful campaigns spike multiples higher.
Of course, the history of digital media is littered with similar attempts to trade ad viewings for content in an explicit way. Remember the scheme for tracking your banner clicks and trading them in for e-commerce credits? Ideas for fully ad-supported or ad-subsidized wireless services have been in the ether for years now. Ultramercial, which powers the Sugar Mama initiative, may be the closest thing to success we have seen in this arena, since it famously runs the day pass model at Salon.com.
At Sugar Mama, Kelliher credits success with a combination of audience, model and timing. These young users know the worth of their mind share and are also eager to engage with advertisers who address their real needs. "They took to this more rapidly than we anticipated," he says. "This is a much more media-savvy generation, and they are tech-savvy, and the timing is right, the audience is right and the value proposition is right."
Unlike previous attempts to make this model work, the Sugar Mama approach is offering users something they already want -- air time -- and it does so in a very clear and uncomplicated way.
For the ad clients, this is not a reach play yet, so much as an engagement and research device. The platform allows advertisers to run surveys after an ad to gather data on effectiveness. There is also an SMS program that lets the brand start an ongoing conversation with the user via text exchanges and ongoing offers. Kelliher says the text messaging piece is doing especially well, because once a customer opts into a persistent relationship with a brand there is an ongoing exchange of value between the advertiser and the consumer. "The key is an exchange of value and a mutual interest and a mutual respect," he says.
But Sugar Mama also benefits from modest ambitions and modest scale. It is not trying to get all advertisers into this mix. In fact, Kelliher believes that keeping the pool well-targeted is critical to keeping the offer credible with users. The customers need to see brands with whom they want to converse and not feel as if they are being dropped into a random bazaar of barkers vying for their attention. Likewise, the program seems to accept that it is not for all customers. Virgin is not trying to make its entire ad business model or overall value prop to consumers ride on Sugar Mama. It is an interesting offer for some customers. On the ad side, too, the expectation should be more on the learning and research side than on the reach side.
All of which suggests that Sugar Mama, for all of its success, does not necessarily prove that trading ad viewings for content is a sustainable business model to drive an entire company. One of the problems with its predecessors may have been over-reaching. Bringing in too may ad clients or not being selective enough and targeted enough with the offers may dilute the experience for clients and consumers. Expecting all of a customer base to respond to the model, too, may be asking too much. As more mobile content providers explore these kinds of explicit exchanges of value with their customers, it is worth considering that Sugar Mama's initial success is grounded in modest scale, uncomplicated processes, and reasonable goals.
But man, if there were a way to cash in on all those Quaker and Post cereal ads I saw from the elbow-burning carpet of my family "TV room," I could own a Ferrari. When I think of all the brain tissue occupied by old "Quisp" commercials, it just seems that under this emerging model there should be some kind of restitution for that.