A mobile-oriented startup rewards users with prepaid credits for opting-in to advertisements, exploring several access points, like web, mobile apps and SMS.
Advertising in exchange for free services is not exactly a new business model. This is actually the lifeblood of big companies that provide free products and services, such as Facebook and Google. But what’s interesting is how advertising can still play a part in emerging economies, where eyeballs and engagement might come from different access points and with lower returns-on-investment per user.
In the Philippines, the mobile penetration rate is at 107 percent, according to the World Bank. However, a big majority of these are prepaid users, at 96 percent. Meanwhile, credit card penetration is at about 11 percent. This poses some challenges to marketers, brands and even carriers alike, given that a big part of the demographics are not exactly wont to make big expenditures.
With a team composed of Japanese founders, YOYO Holdings is a startup incorporated in Singapore and with main operations in the Philippines. The company feels for the above-described market segment, noting the importance of prepaid cellular services among Filipinos. Its flagship product, Candy, is basically an advertising network that lets users opt-in to mobile ads in exchange for prepaid load. For example, users can accomplish web-based micro-tasks, download smartphone apps, participating in surveys, and other tasks like watch video content. In exchange, users can get 6 to 30 US cents equivalent of prepaid load.
In an interview with e27, YOYO CEO Yosuke Fukada says that this particular business model is not exactly suitable to the team’s home country, and the company is focusing its efforts in emerging markets in Southeast Asia, like the Philippines. The service has gained about 75,000 users in its first eights months of operations.
To continue to scale and gain traction, YOYO is now seeking partnerships with more advertisers in order to deliver more of the proverbial candy to its users. In terms of partnerships with carriers, Yosuke told VR Zone that the Candy service acts as a regular value-added service provider, which means YOYO can deal with all of the country’s major mobile providers (Globe, Smart and Sun), as well as subsidiaries and MVNOs.
This also means that the platform can essentially work in other countries and jurisdictions where prepaid credits are a marketable commodity, as well. Prepaid as a business model is actually gaining popularity even in developing economies, where bring-your-own-device plans and international mobile broadband SIMs are becoming a viable — and less expensive — alternative to phone subsidy, which usually require expensive monthly payments.
YOYO is actually expanding to Indonesia and Thailand, two other countries with sizable prepaid mobile phone markets. The company has also launched its “Free Topup Club” Android app, which enables users to take a pick of tasks that they can do in exchange for credits.
The end-goal here is familiar. According to YOYO, it aims to enable businesses to connect with the “next billion” consumers, echoing the goals of campaigns like Internet.org in providing connectivity to emerging markets through alternative networking and business models. “The value of purchased airtime (or “loads”) is approaching that of cash money,” says the team. “We see mobile airtime as an opportunity to economically empower such users.”