Community Workers

AirG delivers white-label mobile social networking platforms to brand partners, and in six years, it as built up a user base of 10 million unique users worldwide. Its users spend an average of 59 minutes a day on the service. 59% of them don’t own a PC, and 33% of them spend $80 (£41) a month or more on their phone bill. David Murphy caught up with AirG Director Frederick Ghahramani to find out more.

DM: So tell us about AirG Fred

FG: We started out in early 2000 as a mobile games developer, and the idea was to create a massive multiplayer game to bring tens of thousands of people together. So we licensed that to around 10 to 15 operators around the world. Then we had a random dumb luck situation where we found that, three or four months in, people were not playing the game but hanging out and socialising. So out goes games and in comes community. So we started with WAP chat, SMS clubs and Instant Messaging, and then starting these various communities, like a friend community and a Latino community and we’ve done it in a replicable way globally.
We spent $5 million last year on R&D to figure out the best way to connect people, and we go to market through various different channels like newspaper companies and media owners. They put our brand in their channel, and we work behind the scenes to interconnect them all to create one global community. We take the disparate communities and interconnect them, so someone on a Hiphop-branded community in London and someone on Cingular’s CoolTalk in Chicago are connected, and can look at each others miniblogs and communicate via the mobile. It took us five years to build 5 million users, and just eight months to go from 5 million to 10.

DM: So how do you define a community?

FG: That’s a good question. Users on the street don’t know what the word means; it’s a construct of the media. For the customer, the key pieces of value are common across all these social networking services. So for some people, Myspace is about dating. For others, it’s about finding friends. It’s different strokes for different folks, a litany of different things you put in a qualifier to find a friend. It could just be you need friends in your local city. It’s about congregating round different concepts, maybe a brand like MTV or Boost, or a topic like music or sports can put like-minded people together. I don’t believe in the ‘long tail’ business model, where a million people do millions of things and added together they equate to a business. There are three or four things that draw people into a community: dating, friend-finding or congregating round a brand or topic is what it is all about.

DM: So you’ve got 10 million users. Is it fair to say you were the original MySpace?

FG: I believe it started in 1986 with AOL Chat. People are always going to need attention and will search for connections with other people, whether that’s in a bar, a nightclub or whatever. At the end of the day, when you put a bunch of people together, irrespective of the medium, people have always tried to find like-minded people. Social networks is just a new name for an old thing.
If you look at these services, there is no one thing that you could say is social networking. It’s blogging, photo hosting, music sharing, finding like-minded people. These things have always existed, but in a disparate kind of way. So you combine it in one brand and people call it social networking. But irrespective of how the service is crafted, it’s all about communication and interacting with each other.
Every social network or community service, irrespective of where it is, needs three key things for success. The first is that every user has to have some form of identity, which is why things like AOL Chat that were session-based, though they were successful, were only successful for a certain amount of time. You need persistence of identity. The second key ingredient is presence, that people know where you physically are. And the third is interaction.

DM: So you have all these communities, but you operate behind the scenes?

FG: Yes. People don’t know who we are. We are a b2b enabler, so the way it is communicated to customers is different in each channel. With Sprint in the US, it is on your Sprint phone and you text to join. With Streetsounds in the UK, they have a flyer system that they use to promote the community, so the awareness is different in each channel, but if you have a group of users congregating round a certain service, and they have phones, it’s an easy way to put them together.
The online guys get the attention because we in the industry sit behind our PCs all day and our ‘Alt Tab’ to our social life is to open Outlook and get into IM and message our friends, or I Alt Tab into eBay or MySpace. All these things are going on behind the scenes. But if you look at people who work in professions where they are not in front of a PC all day, this is a much bigger group of people, so these services provide the Alt Tab to those types of people to take a 5-minute break from their work.

DM: Are the data charges not a problem?

FG: The data charges are more of an issue in some countries, like the UK, than in the US. When we decide which market to go into next, the key question we ask is: ‘What are the data charges, and what are people going to be spending on the bill?’
A year ago, data rates were too high. There were these all-you-can-eat packages like Web & Walk, but they had lots of asterisks at the end of them.
What’s driving it in the US is that it is not too difficult to get unlimited data. $6 for T-mobile, $9.99 a month for Sprint. This is what’s needed, because people do not understand a kilobyte. At the macro level, this has been retarding our growth. So in markets like the UK, we craft the product to be less data intensive. We refresh every three minutes instead of every 30 seconds for example. It has been holding us back, but over time, we can only assume that markets like the UK will evolve to the US-style model, where data is so cheap it is not material.

DM: So which countries are you targeting?

FG: Up until now, we have focused mainly on English-speaking countries, but that’s changing now. So we have done the US, Canada, Australia, New Zealand, the UK and the Philippines and now we have opened up operations in Italy, and we are doing a push in Spain, Italy and Germany as well.
The key challenge for building a community, though software is a part of it, is to have a critical mass of active mobile users interacting with each other, so this is why we have focused so far on English speaking markets.
The assumption people make is that you get critical mass by migrating an online service, but we have tried it and it has not worked. Mobile customers and online customers use the services in different way that makes interaction difficult. People like Match.com have tried to do a mobile version, but ended up separating the databases. With mobile it’s a different kind of communication, shorter, more terse, so it will be interesting to see if the online guys can migrate to mobile

DM: Do you use your communities for research? I'm sure there are a lot of research companies that would like a pool of 10 million mobile users to fish in.

FG: We have been asked to do a few polls. It’s so easy for us to throw a survey out and have a question answered quickly. On one survey, we got 10,000 responses in 20 minutes; on another, 30,000 in 90 minutes. But this is not something we want to turn into a revenue stream. It’s more something that shows the power of being able to interact with users really quickly. It does not provide customer-facing value. 

DM: And what about advertising? You have a lot of eyeballs to sell to advertisers.

FG: We have been doing this for about half a year. In 2006, we had over 20 billion page impressions we could have monetised, and we sold around 2% of those. The key thing here is you are not just buying traffic. The platform lets you target your campaign based on the user’s demographic profile: age, sex, location, language, ethnicity, interests, what they are into. So instead of buying page views, we have the ability to target, so if Procter & Gamble want to target women for a make-up service, they can just target women, so a big part of the customer-facing value is getting the right ads.
We are trying to do more creative focused campaigns, instead of selling real estate, because we will not be able to convince advertisers to move from trial budgets to making mobile part of the marketing mix if they are just buying pages and don’t understand what they are getting. 

DM: Which brands are keenest on mobile advertising?

FG: There are lots of them. Telcos, Jeep, videogame publishers, the US Navy, student loan companies. When you have over 10 million users you can bend and shape them and build little target groups.
We have 35+ ‘Soccer Moms’ for example. These are the midwest wives, kept women who don’t work. They take kids to soccer practice and sit and wait around for two or three hours per day for the kids to finish soccer, so they have lots of disposable income and time, which means that they also have time to vote, so they are a powerful demographic. So out of 10 million users, you can craft groups you are going to be targeting based on the latency of different categorisations.
There has been a lot of talk about mobile advertising, but the challenge is to get advertisers from outside the mobile industry. There are companies that understand the value proposition of having 10 million users on the phone because the point of sale is on the phone, so ringtones, mobile game vendors etc. The challenge in mobile advertising is to bring in the consumer packaged goods and car makers and people from outside the industry. This will be the litmus test.
At the moment, it’s not the brands that are doing it, more the agencies that are driving it. Toyota have done a deal, Reuters have done a couple of big buys, Starbucks too, but usually, it’s been done by a common media buyer or agency.
But there are trial budgets out there. One agency in the UK has £4 million a year for interactive trials, so they are looking at communities as a mobile adventure. The key thing for us is that we have a subscriber transaction-based service where we get a certain amount per user per month. The ad-sponsored service is a secondary or tertiary source of revenue. To scale that up to a level where we make the service free will take a long time. 

DM: And you say it took five years to reach 5 million users and eight months to reach 10 million. Can you sustain that level of growth?

FG: Well we’ll make an announcement when we hit 20 million, and we expect that to be in the next couple of months.