As BBM is no longer tied to the BlackBerry operating system and BlackBerry devices, it must now have its own business model. The big-picture monetization plan for BBM is all about growing the user base and driving average revenue per user (ARPU).
We are actively growing our user base by taking BBM cross-platform, with native apps for iPhone, Android, and Windows Phone. Since going to multi-platform last October, we now have 91 million BBM users on Android, BlackBerry, and iPhone collectively.
We’re working to increase our ARPU by offering value to our customers in four main categories:
- Targeted mobile ads and sponsored content,
- Stickers, music, games and other virtual goods,
- Our eBBM business suite, and
- BBM payments.
Mobile Ads, Channels, and Sponsored Content
Mass-market advertising is going through a transition. Advertising dollars are moving from national TV, radio, and print publications to social media; from paid search and banners to social media — and now from social media on desktop to social media on mobile, where targeting audiences is so much more precise. On social media, there’s also a higher level of engagement, and a more direct connection between advertisers and consumers.
BBM wants to be there. We offer advertisers a highly engaged user base, with 72% of our monthly active user (MAU) base using BBM on a daily basis. That’s the highest number I’ve seen among social apps — topping both WhatsApp and Facebook.
Social advertising is so cost-effective that this mass medium is not just for the big brands, but accessible for small businesses too. Imagine being able to receive promotions and offers from your neighborhood florist, bakery or butcher shop through BBM, direct messaging them to place an order and sending payment via BBM. These are the kinds of interactions the mobile economic ecosystem will allow. We’re laying the groundwork with BBM Channels.
Our mobile ads appear in “Feeds.” BBM is one of the only messaging apps that includes news feeds as part of the way it works. Sponsored posts in a social media news feed are the best-performing type of ad unit that exist — and we’re experiencing unheard-of, industry-leading click-through rates in our early campaigns. We believe that’s the result of a sponsored post in the Feed ad-unit format combined with the extremely high engagement level people have with BBM.
Stickers, Music, Games, Apps, and Virtual Goods
When Japanese messaging app Line announced in Q1 2013 that it had made $17 million from selling “stickers,” or fancy emoji that people use in their chat sessions, the mobile messaging world took note. BBM is no exception. Stickers make a great offering for many reasons (more on that in my previous post). We’re offering a good selection now in the BBM Shop, and seeing a huge amount of traffic and enthusiasm.
We already have a feature that allows you to share the music you’re listening to on your device, so that your contacts see it in their feeds. We’re working on relationships with a number of music providers so you can then click to learn more and buy the music you discover through BBM.
Music is a great match for social media, as the way people tend to learn about music is from friends. WeChat has even gone so far as to start a DJ channel for an “unradio” show. (I think we’ll watch how that one pans out before we venture into that territory.)
Lots of messaging apps host games that operate only within their walled gardens. The games can be another competitive advantage, but they can also bring in revenue. Many games let you buy your way to the next level. In others, you can purchase virtual goods that exist in the game but nowhere else.
For example, a game that’s made some headlines lately is called “Kim Kardashian: Hollywood.” (I’ve heard it’s addictive, but I haven’t tried it myself. Not that I’d admit it publicly if I had.) In this game, you must pony up real money to buy virtual clothes, energy, plane tickets, cash and “star power” in your quest to move from being an “E-list” celebrity to an “A-list”-er. Sounds silly? It’s projected to make $200 million this year.
Apps are another opportunity to monetize. We can offer them inside BBM, in Channels for example, and link to the provider’s affiliate program. Or we can offer our own BlackBerry apps to iPhone, Android, and Windows Phone users. For example, Android users might be interested in buying a better virtual keyboard, à la BlackBerry. (There’s definitely a market.)
The eBBM Suite
In February of this year, we announced the eBBM Suite, which will become a family of services and products tailored to meet the needs of enterprises. We released the first solution, BBM Protected, in June. It adds enterprise-grade encryption to BBM chats, protecting data in transit, and allowing enterprise employees to take advantage of all the productivity-boosting benefits of mobile messaging in the workplace. There are more great collaboration tools on the way.
I wrote this post to address the question of how we’re monetizing BBM. After providing the survey of our plans and all the opportunities in this growth market, perhaps a more pertinent question is how are we NOT monetizing BBM. (Well, OK, we’re not jumping into the DJ channel….) Still, this is a wide-open field right now.
BlackBerry has long been known in the mobile industry for its secure, private operating system. BlackBerry is still the choice of governments, highly regulated industries, and security-conscious organizations around the world. That’s why BlackBerry is a natural fit for financial transactions.
We’ve been piloting BBM Money in Indonesia over the last year, and recently launched a full version. Developed by Monitise and issued and managed by PermataBank, the new BBM Money is available for BlackBerry, Android, and iOS smartphone users, regardless of who they bank with or whether they have a bank account. You can use it to send and receive money to and from your BBM Contacts, be they friends, family or business associates. You can also pay bills from participating companies, top up prepaid mobile accounts, and make payments in participating retail stores and online.
We’re not alone in this thinking, as China’s mobile messaging giant WeChat already handles payments, and it seems that Snapchat has filed some trademarks to handle payments. I’d trust BlackBerry to handle my payments securely, but I’m not sure I’d risk that with the social network famous for disappearing-but-not-really-disappearing photos. Would you?
We’re not looking to become a bank, as WeChat has. For BBM Money, we’ve worked with Indonesia’s local Bank Permata. In our BBM Shop, we’ve integrated with Google Play, iTunes, and the Windows Phone store, as well as direct-to-carrier billing. Expect more of the same.
Line has a monthly ARPU of 24 cents. WeChat is 11 cents. With BBM’s user base of 91 million people, combined with our track record around security and privacy, we have a promising hand to play. There’s huge, huge potential.
I still believe that combining social and commerce is one of the “killer” opportunities out there. With our existing BBM asset, combined with our DNA around security and privacy, we have an interesting position to play in this growth market.