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Is Premium Rate right for me?

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Is Premium Rate right for me?

What is clear is that mobile is here to stay, and is growing exponentially. Mobile penetration has dwarfed other communication means in the last 10 years, providing a direct channel to consumer spending:

 

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[source]

 

 

There are a number of factors to consider when launching a service, which go far beyond simply knowing which services do well in which countries.

 

Whilst our business is built around our successful clients, we still have clients that have set up Premium SMS or IVR that come to us and say things like, "I've had a thousand visits to my ad and not one purchased", or "I've not earned as much as I thought I would do".

 

Typically, those who do not do so well as others, may not have considered:

  • Ability to test market / get market feedback. As PhonepayPlus's 2010 report Current & future market for Premium Rate Services rightly states "It is clear that the language the industry uses for these services is far removed from that of consumers. It's important to be sensitive to these differences and adopt language that consumers understand in any interaction with them. This is obviously true when advertising products and services, but also when conducting research - in particular quantitative studies, where there is no room to explain concepts to consumers."  [source]
  • Ability to test your service. Clients, ask your account manager about our testing packages.
  • Language. We've seen clients using online translation websites to re-work their pitch to users. The result is broken or awkward language causing mistrust and abandonment.
  • Regulatory environment. You can't dupe users with premium rate services, there is no avoiding letting users know the exact amount that they will be charged. Some countries have more stringent means to ensure the price is conveyed to users, e.g. double opt-in converts less than single opt-in. Some countries have spending caps, per user per day for example. USA for example has both double opt-in and spending caps per month, but the rewards of this lucrative market can be worth working for.

 


Have it your way

Before we look at what type of service is most popular, it's interesting to understand the types of service you can launch, as broken down by PhonepayPlus in their Taxonomic map of premium rate services market segmentation:

 

INFORMATION SERVICES

Directory Enquiries (DQ) - All phone-paid services classified as directory enquiries.

 

Information Services - Includes phone-paid information delivered across any platform:

  • Sports and news updates.
  • Tipster lines.
  • Specialised information services such as legal or technical advice.
  • Text-information services such as AQA.
  • Location-based information services (paid maps, find-the-nearest etc).
  • Business information lines (e.g., customer service, product helplines.

 

CALLING SERVICES

Premium rate services for alternative call routing or access, including

  • International call routing.
  • Reverse charge services.

 

ENTERTAINMENT SERVICES

Adult Entertainment - All phone-paid content of a sexual nature, delivered across any platform, including:

  • Adult chat, video, images.
  • Recorded stories and other adult content.

 

Competitions & Quizzes - Competitions and quizzes which participants engage in via call-in or text-in action (regardless of origin of call-to-action)

 

Voting & other Participation TV - All phone-paid participation TV activity, including:

  • Voting (via “red button”, call-in or text-in).
  • Text-to-screen.

 

Flirt / Date / Chat - All phone-paid chat and dating services of a non-sexual nature. Includes chat on 087x.

 

Gambling, Lotteries etc. - All kinds of phone-paid gambling and lottery activity (incl. scratch cards, casino etc).

 

Games - All phone-paid gaming activity including purchase of game applications paid for by phone, one-off access to a game, purchase of game levels etc.

 

Tarot / Astrology / Psychic - Phone-paid fortune-telling services, incl. tarot, astrology and psychic services.

 

Other Entertainment - Music, video, TV and other entertainment content paid for by phone, whether streamed, downloaded (via a fixed or mobile broadband connection or TV set-top box) or accessed through mobile applications.

 

PERSONALIZATION AND GIFT SERVICES

Mobile Personalisation - All mobile device personalisation content and services - predominantly ringtones and graphics.

 

Virtual Gifts Phone-paid payments for the purchase of virtual objects or services within community/social media sites (outside the chat/flirt/date activity)

  • Purchasing virtual gifts for friends, or virtual accessories or objects for use within a social media environment.

 

PAYMENT SERVICES

Charity Donations - Donations made using premium text or calls.

 

Payment of Non-phone based services - Payment for non-phone-based content and services, including:

  • One-off payment for Wi-Fi access, SMS-based payments for services such as parking , etc.

 

 

 

In its Simplest Form

"Which services make the most money"

"In which country should I launch?"

 

To answer these questions statistics are readily available that would go some way to answer these questions, such as:

 

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[source]

 

 

- Mobile penetration by country

image003.gif

 

Number of Mobile Subscribers by Country, per 100 people

 

[source]

 

 

Service Penetration by Demographic Group

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Phone paid service penetration rates amongst phone-paid service users only, split by demographic group.

 

 

So going by the above, to answer a client when they ask us, what type of service is the most popular, and in which country, based on the above you should be safe starting a directory enquiries service in the UK. Following just that advice wouldn't do you a bit of good. To setup a Directory Enquiries service you would need huge capital investment and infrastructure, there are numerous regulatory issues to consider. It is most likely that a client best suited to setting up a directory enquiries service would be in the business in some capacity already, so would not suit the majority of potential clients.

 


So meanwhile, back in the real world

Key factors that we often see contributing to successful revenue generating campaigns:

 

- An established service introducing premium rate as an alternative or only payment mechanism.

 

- Services with an existing loyal following, e.g. online gaming, brands launching services.

 

- Services that make it more convenient to pay via premium rate than traditional payment methods.

 

- Services that really encourage repeat payments e.g. chat services, or ongoing revenue from subscriptions.

 

- Services that take advantage of the latest technology, e.g. in-app payments / freemium app upgrades (see the Lookout mobile security app, who will have you paying when you really need it), social media. This was once ringtones!

 

- Services that are viral. Proving that you don't necessarily need a ground-breaking product, who can forget the Crazy Frog phenomenon, which managed to cross over from a multi-million download ringtone to a number 1 chart hit United Kingdom, Ireland, Turkey, New Zealand, Australia and most of Europe. There are massive viral campaigns happening like this all the time, e.g. the Facebook's Super Poke upgrade, Angry Birds, etc.

 

And now, to answer the questions 

In summary, as to which country and which service you should launch, ultimately clients are asking us for a combination that we can recommend to guarantee success. This question can't be answered by looking at ours or industry statistics, if there was a perfect recipe for success everyone would be cooking it!

 

This said, if you tell us what you are thinking of doing in this mobile space, there are not many other companies as well positioned to tell you if what you're thinking of is likely to work. We love to hear from our clients about new ideas, or projects your thinking about launching. We will talk to you about what we've seen work, and what we've seen fall on it's face, where we can, so let us help you learn from our many years in the trade. Our support team, and account management team are here to help. 

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