Cell phones offer targeted marketing in developing countries

Tech and Society: My cell phone, my coupon dispenser

Michael Fitzgerald By Michael Fitzgerald

Nathan Eagle thought he was going to be an academic. Then, while working as a Fulbright professor in rural Kenya, a panicked nurse asked him to donate blood to help with an emergency shortage. Eagle hates needles. But he gave some blood. By the fourth time this happened, he decided “in my own self-interest” to find out why the local hospital kept running out of blood.

It turns out that in Kenya, drivers in pick-up trucks check on blood supplies, replenishing as needed. If hospitals have a problem in between checks, it can take up to four weeks to replenish supplies. But almost all the nurses carried cell phones. Eagle, who was teaching a course on developing applications for mobile phones at the University of Nairobi, worked with some students to build a system where the nurses could text in blood supply levels on a daily basis to the centralized blood repository. At first, the system failed because text messages were costing the nurses a significant percentage of their salary. But when they were given airtime to cover their costs, they adopted the system. It is now used in 100 countries.

Nathan Eagle (Michael Fitzgerald)

That event prompted him to leave his life in academia to start what has become Jana, a research and marketing company based in Boston. Jana operates in about 55 developing markets, sending out cell phone-based text messaging surveys for organizations like the United Nations, or big multinational companies. It has recently branched into using cell phones as a way to distribute coupons. It is thus bringing Western-style targeted marketing and advertising to the developing world. Some of its major markets include India, China, Indonesia, the Philippines and Nigeria. Eagle sat down with Latitude News’ Michael Fitzgerald.

Latitude News: You started with surveys. Tell us about one of the more interesting surveys you’ve done.

Eagle: We’ve been working with a large consumer products goods company.  They were interested in trying to figure out the attitudes towards laundry detergent for rural Filipino women. Before us, they would fly employees to Manila, rent Land Rovers, drive out in to the field, and conduct face-to-face surveys. Now, a rural Filipino woman gets a message that shows up on her phone, saying “hey do you want to answer five questions about laundry detergent? In exchange we’ll give you 100 Filipino pesos (in airtime). If you aren’t interested, ignore, if you are interested, click yes.”

LN: You’re piggybacking on the spread of the cell phone.

Eagle: There are currently 6 billion mobile phone subscriptions on the planet. It will work on every single one of them. Suddenly, the phone is not just a way to make phone calls, it’s a way to get compensated.  And that compensation can be literally instant. Take a list of the 876 million prepared phone numbers in India. Pick one at random, I type it in to my laptop, type in 50 rupees and push enter. No matter where it is, or whether it’s a 10-year-old phone or an iPhone, the individual will receive a message saying ‘you just received 50 rupee (in airtime).” We can instantly infuse capital, and infuse it at a large scale. That’s never been seen before.

LN: In the West we’ve become cynical about marketing and advertising. What kind of reactions do you run into in developing markets?

Eagle: We’re not just pushing a message from our client to a person. We’re providing our members, individual consumers who’ve opted in, the ability to earn airtime for doing specific things.  That is a big difference.

LN: Why does airtime matter to them?

Eagle: The typical mobile phone subscriber in these emerging markets spends anywhere from eight to 12 percent of her day’s wage on airtime. We’re enabling them to offset a substantial portion of that cost by doing things like filling out surveys and trying out products. That ultimately leaves that consumer with more disposable income. The vision is more and more people entering the middle class.

LN: You’ve started to do cell phone coupons. Here in the U.S. we’d have newspaper circulars and other ways to distribute coupons.

Eagle: That’s the reason we don’t operate in Western markets. We are exclusively in regions where there is no other mechanism to engage with consumers. There is no Sunday paper to clip out coupons, no technology at the point of sale to redeem them. Our clients suddenly have this mechanism to directly engage with what they consider to be their next billion consumers.

LN: You say you’re putting money back in their pockets. How?

Not just for talking anymore. (Reuters/Andrew Caballero-Reynolds)

Eagle: There’s $200 billion spent on advertising in the developing world, and it’s spent in 1950s style, on tv ads, radio ads, billboards, that sort of thing. We’re providing brands an alternative. Instead of putting money in pockets of people who own the major media channels, why not in the pockets of the consumer they’re ultimately trying to reach?

If we can redirect less than half of that $200 billion spent on advertising to cell phones, that amounts to giving a billion people a 5 percent raise. It’s rare that you can give a billion people a five percent raise and I think it’s worth quitting your day job and actively pursuing it.

LN: What problems do you have entering markets?

Eagle: So one of the ways we build out our members database is through referrals. Techniques to engage consumers in the Philippines or Bangladesh do not work at all in Pakistan. In Bangladesh we were paying pennies to have people refer their friends. We had to end up turning that service off, there’s far more people who wanted to participate than we had demand for. In Pakistan, we haven’t gotten referrals to work yet. We don’t know why. What tends to work really well in Pakistan is providing people with free talk time for filling out very basic questions about themselves.

LN: Are you the Google or Craigslist of these markets?

Eagle: That’s so 10 years ago! The Facebook of these markets (laughs). I don’t know if there is a real analog in the West. We are providing a direct channel to consumers, and that really hasn’t happened here since land-line telephones were introduced in the States. People have just gotten these handsets and we’re jumping on that recent ubiquity of phones.