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December 10, 2007

VoodooVox In-Call Media Now Integrated into IVR Technologies' Facebook callme Service

By Patrick Barnard, TMCnet Contributing Editor

IVR Technologies Inc. has reportedly integrated its popular Facebook (News - Alert) callme voice services application, which allows free voice calling between friends on Facebook, into the VoodooVox In-Call Media Network. That means Facebook members can now make free calls to each other -- using the callme service on either their fixed line or mobile phones -- in exchange for listening to a brief audio advertisement at the start of each call. This also means advertisers have a large new base of potential customers which they can reach through the VoodooVox In-Call Media Network.

VoodooVox offers “ad supported telephony” – a relatively new phenomenon in the world of IP telephony wherein callers are played brief audio advertisements in exchange for free calls (or greatly reduced call rates). So far, the idea is mostly seeing application in the world of e-commerce, however many telephony service providers are now eyeing its potential for developing new business models, wherein they can offer their customers free or low rate calls while at the same time generating new revenue streams for themselves. VoodooVox’s In Call Media Network is basically a third party network used for “injecting” audio advertisements into call streams. The In Call Media Network can be interconnected with any other network – and typically users are given the option of placing “ad supported” or “non-ad supported” calls. Should a user decide to take advantage of the cost savings of an ad supported call, he or she must listen to a brief (typically 8 to 10 second) advertisement at the start of the call. Once the advertisement has finished playing, the call is connected – or if the user has an interest in the product or service being offered in the advertisement, they might be given the option to connect directly to a live representative. Should the user decide to purchase the product or service being advertised, then the carrier, or “call publisher,” gets a small fee, as does Voodoovox, for the transaction.

The idea seems simple enough, on the surface, but there’s much more to it than simply playing advertisements and then connecting calls: There’s the whole aspect of how advertisements can be targeted to callers -- which is really ad supported telephony’s biggest advantage. Thanks to the power of IP, advertisements can be targeted to individual callers based on their unique interests. For example, if a caller is visiting a Web site run by a certain online retailer and the caller’s computer has been “cookied” by that retailer, the caller could be offered the opportunity to make a free call in exchange for hearing a brief advertisement about a product or service that is related to other products and services the user may have already purchased. So, for example, if someone recently visited a cookware store and purchased some baking sheets, they might be given the opportunity to make a free call – perhaps to get some information – and the call would begin with a brief advertisement about additional baking products offered through the online retailer. In the case social websites like Facebook, the user may have indicated certain interests on his or her member page which could then serve as the basis for delivering targeted advertising geared to that particular user. The deal is a win-win because the user gets to hear information about products or services that he or she is interested in, in exchange for a free call, and the advertiser gets to deliver targeted advertising to callers who are more likely to be future customers.

Ad supported telephony lends itself to a variety of business models – for example, it is also seeing growing use in the call center industry: When a caller is placed on hold, they can listen to a brief advertisement -- which for many users is a far cry better than having to listen to “Muzak” while waiting on hold. Very often these ads offer a certain level of “entertainment value” or are perhaps more informational in nature – thus they tend to be non-intrusive and typically do not include a hard pitch (this would have the effect of turning the customer off). Sometimes the ad is coupled with an entertaining “skit” or something else to help hold the caller’s attention, such as the day’s top headlines, weather report, or sports news.

In some regards, ad supported telephony is not too unlike the localized television advertising now offered through cable and IPTV operators. We’ve all seen the local ads that appear on local cable TV channels – ads from local businesses right in your area – and its well known that IPTV (News - Alert) operators will soon be able to directly target ads to individual subscribers, based not only on their location but also on their past behaviors (what shows they watched, or perhaps even what purchases they’ve made recently). Many see VoodooVox’s In Call Media network as being the telephony equivalent of this capability: It gives advertisers the chance to directly target users who are a “captive audience.” (And keep in mind that at any given point during the day there might by hundreds of thousands, if not millions of people waiting on hold – whether waiting for a call center agent to pick up the line or waiting for their “free” VoIP call to be connected.) Some have said that VoodooVox's In-Call Media service does for telephony what DoubleClick (News - Alert) did for the Web traffic.

In this particular case, Facebook members are being enticed to call other Facebook members -- either from their fixed line phones or mobile phones -- for free in exchange for having to listen to a brief advertisement. (Today’s press release doesn’t provide any details as to how demographical data about the Facebook user is being shared for the purpose of delivering targeted advertising.) The social networking site now boasts more than 50 million registered users.

“The value of this integration comes foremost from the full or partial subsidization of the calls and the second benefit is that users are now able to receive non-intrusive, relevant and useful content that is targeted to them based on their published profile,” a press release from IVR Technologies states. “The rich information that can now be provided to callers through this integration, including news headlines, stock reports, entertainment and advertisements, complements the existing benefits of the callme application that includes significant cost savings, convenience and privacy. Corporate sponsors and advertisers are now able to reach a larger market with targeted messages that are placed directly in the user's attention path in a non-obtrusive manner, as opposed to being relegated to the user's periphery through banner and gutter advertisements or through obtrusive and annoying popup windows.”

"This collaboration is further validation of the benefits of In-Call Media," said VoodooVox CEO J. Scott Hamilton in the press release. "The In-Call Network Exchange was designed specifically to promote the growth of ad-supported telephony solutions like IVR Technologies' callme application.”

VoodooVox’s Web-based technology enables it to inject interactive content, mixed with targeted advertising, into any call stream, fixed or mobile. The company claims its hosted In-Call Media service, which is ideally suited to businesses that handle high call volume, helps reduce call abandonment rates and increase customer satisfaction.

VoodooVox’s technology holds great promise in that it could one day be used to deliver free, ad-supported telephony services, including free mobile services, to consumers. In fact, the technology is so promising that the company just recently announced it received $8.1 million in Series D financing led by Softbank (News - Alert) Capital. Existing investors Apax Partners, Disney’s Steamboat Ventures and Village Ventures also participated in the round.

VoodoVox last made news on TMCnet in October when it announced that it had signed a three year contract with Jones MediaAmerica to serve as the exclusive In-Call Media sales representative for US-based radio and television broadcasters. The agreement is expected to generate $2.3 million in ad sales for VoodooVox over the first year, and more than $10 million over the course of the entire contract.

The company's technology is already being used by more than 400 radio stations to keep callers informed and entertained while they're waiting on hold.

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Patrick Barnard is Assignment Editor for TMCnet and Associate Editor for Customer Interaction Solutions magazine. To see more of his articles, please visit Patrick Barnard’s columnist page.

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