ASX-listed mobile communications company Ziptel has signed on a swag of big-name sports stars – including Indian cricket captain Virat Kohli, and Real Madrid soccer player Gareth Bale – to promote it on social media as it seeks to topple Skype and Viber.
The strategy comes after the success of an earlier move to enlist former Australian cricketer and Bollywood actor Brett Lee to use his popularity in the sub-continent to boost uptake of its app, which lets users call or message any phone on any global network for the price of a local call, or call free to other app users.
The app signed on 2.3 million subscribers in the first 13 weeks since launching in late June, and the company's founder and executive director Keaton Wallace told The Australian Financial Review that the new plans would mean it would hit its target of 10 million subscribers well ahead of the 18-month schedule given to the market.
The company's new ambassadors have been recruited to help it target new markets.
Access to the sports stars' social media accounts has been facilitated through a deal with UK-based digital media agency Sports Digital Limited, with Kohli and Bale the highest-profile among a group of 11 available to Ziptel. Others include Manchester United and England player Luke Shaw, Colombian soccer players Juan Cuadrado and David Ospina, and British Olympic heavyweight gold medallist boxer Anthony Joshua, as well as other soccer, cricket and racing car personalities. Big potential reach
Together, the stars have a combined social media following of more than 100 million across Facebook, Twitter and Instagram, and Mr Wallace said the followers were spread across Europe, India, Africa and South America.
Rather than being paid in cash, the stars get various amounts of equity in the business, with Ziptel setting aside 4.5 million shares.
"The Brett Lee campaign has been a huge success in terms of reducing our cost per install across key targeted regions; it has created a lot of virality and organic growth in the application," Mr Wallace said.
"To get over 2 million subscribers in such a short time is no easy feat for any business. We are not spending much cash on a monthly basis, we still have over five million in the bank and the uptake is now starting to be seen and investors realise we are a real business."
Shares in the company shot up to $1.45 in late September after Ziptel announced impressive early customer numbers and unexpected revenue generation. The stock was at 72¢ on June 29, the day its deal with Brett Lee was revealed. The shares currently sit at 80¢.
As with the Brett Lee deal, the sporting stars will promote Ziptel over social media and take part in Q&A sessions with fans.
Head of social media at Bastion Collective, Kristen Boschma, said it was a common strategy for a challenger brand to "borrow" the influence of people with a significant social media following.
She said it initially worked simply by raising awareness of a brand, but was reliant on stars finding a way to be entertaining in their tweets and posts to avoid annoying readers.
"At the challenger start phase, it's less about meaningful engagement and more about brand exposure," Ms Boschma said.
"So providing the sports stars can find an entertaining way to tweet about the company, if it doesn't go on for too long … then their fans will be forgiving.
"Later the brand will accumulate enough of its own fans, followers and customers to rely less on influencers and build a closer, less intermediated relationship with consumers on brand social channels." First-tier markets targeted
While Kohli plays squarely to the same cricket-loving Indian demographic as Lee, Mr Wallace said other big names had been picked for their sway in other target markets, with potentially higher average revenue per user (ARPU) generation.
"We wanted to try to branch out into the first-tier markets … the Brett Lee deal gave us access to about 3.5 million followers, and this one is much bigger penetration into different key regions," he said.
"Europe is a massive region for us as we look at first-tier countries with the iOS launch imminent. They spend more money on their telephones, so we are trying to increase ARPU on each one of our subscribers and monetise the application further."
Mr Wallace said he views Ziptel as a direct rival to popular mobile calling app Viber, rather than Microsoft-owned Skype, which he said was still largely associated with PC-based calls.
"The key point of difference for us is the quality of calls that our compression technology allows with far less requirements for data," he said.
"Viber also has some really bad legacy issues in terms of the call quality. We see the market as being big enough for a similar competitor, we are free to download and use, so why wouldn't a consumer give us a try?" Read more: http://www.copyright link/technology/ziptel-enlists-star-power-in-battle-to-topple-skype-and-viber-20151101-gko8h2#ixzz3rhymy7PK
Follow us: @FinancialReview on Twitter | financialreview on Facebook
ZIP Price at posting:
80.5¢ Sentiment: Buy Disclosure: Held
(20min delay)