Jingle Networks has already captured a six percent market share of directory assistance calls with its 1-800-Free411 service. But, with IPO rumors swirling, that might not be a big enough business. What if Jingle expanded into a voice ad network? I have learned that it is preparing to do just that. Confirms CEO George Garrick:
At this point I’d call it the Jingle Ad Network. We have advertisers that want to get into more environments, and have technology to serve ads. We are talking to publishers about acquiring enough inventory to be significant. We are starting to sign deals with companies that have large numbers of calls. I imagine it will be a few months yet before we bring anything live, probably later in the third or fourth quarter.
Today, Jingle offers free directory assistance calls in exchange for playing two audio ads, one before the caller asks for the number and one before the number is given. Its Free411 service gets 20 million calls a month. That is 40 million advertising opportunities a month. Not every call can be matched with an ad, but a very large number can. Already, Jingle has more than 150,000 advertisers, many of them local. National advertisers include McDonald’s, Earthlink, AMC Theaters, FordDirect, Allstate, Cablevision, Columbia House, Days Inn, Miller Brewing Company, and Travelodge. Its top categories include stores, restaurants, banks, and doctor’s offices.
Jingle can use the call volume and ad inventory on Free411 as an anchor for a broader voice ad network. Any information line, movie line, or call center could hook into the ad network to lay ads while people are on hold. Most companies look at their call centers as a cost center. Being able to generate one to two cents per call in revenue would be significant for many companies. And as voice apps take off on the Web, that could present another opportunity, although Garrick says the call volume is not there yet. As with any ad network, it is a numbers game. The more call volume Jingle can fill with ads, the better its economics.
Does this mean, Jingle is preparing for an IPO. Garrick doesn’t rule it out. He says:
We expect to become profitable before the end of this year. If we look at the public markets, it won’t be until next year.
Jingle is not the first company to try to do this. Already, it faces competition from startup VoodooVox, which is building its own voice 2.0 ad network. VoodooVox claims that it currently powers 320 million ad-supported calls per month, and reaches 30 million consumers. But Jingle does have a leg up in that it already generates a lot of ad inventory on its own, and it is expanding its own free ad-supoprted calls to include driving directions, weather, and other information services.
Of course, there is always the specter of Google, which offers its own free Google411 directory assistance service. Google411 does not even have ads yet, and is treated more like a research project to test voice recognition algorithms. But Google could jump on the voice advertising train any time it wants.
Finally we will get some better ads on AOL Movie Phone!!!
stupid.
can someone please update my SOX
SOX- Sarbanes Oxley. It’s a law written in a knee jerk response to unchecked corporate thievery – My idea is to have SOX optional or tiered with ratings
Do you guys realize that you have serious content management issues? Your site works about half the time.
Immediate Short on this thing. Replace the whole thing with the net and smart phones with 3G.
Anyone have grandcentral?
please invite me support@youyap.com
Monetizing on-hold time provides an incentive for call centers to increase time spent on hold, not decrease it. It’s tough enough to get a person as it is. Perhaps it pays a penny or two per call, but at what cost to customer service?
The voice ad exchange idea is not new, but is intriguing. Advertisers need a way to quickly determine the best way to participate on the MANY available free directory assistance services…and possibly other voice-activated ad-supported phone-based services too. There is a fast-growing list of free directory assistance/information services…all trying to get our search attention. I will be trying out all of these on a regular basis, just to see what’s new.
I personally prefer the ones that have operators to help when the automation doesn’t recognize me and that also don’t restrict me to only business searches – sometimes I need to find people, too! The QUALITY of the information I get and the speed at which I get it is also very important to me.
1-800-YellowPages (800-935-5697)
1-800-2ChaCha (800-224-2242)
1-800-411-SAVE (800-411-7283)
1-800-555-Tell (800-555-8355)
1-800-Call-411 (800-225-5411)
1-800-Call-Dex (800-225-5339)
1-800-Free-411 (800-373-3411)
1-800-Goog-411 (800-466-4411)
1-800-Info-Fast (800-463-6327)
1-800-The-Info (800-843-4636)
Personally I prefer having more options than less, and unfortunately not all services are equal. I just might be lucky and computers love my voice, but I don’t see the point in having a human on the other line when they’re just giving me the same information. At least FREE-411 gives out driving directions and residential listings, something google and 411-save don’t do.
The market will speak re: which is best, I guess.
Looks like a bit of timely marketing? I’m trying to understand this ad network description and the model for this delivery mechanism. So 20M calls/month. Maybe people use it 4 x/month will say. So, 5M users. Seems we’ve been hearing this 20M/month for awhile, so no growth, clear marketing expendiure needed. To even be considered worthy of an ad network, probably need the ability to show 200M deliveries/month (small on a web scale, but this is a different, “live user” delivery method, though unproven). So at 4 calls/month, would need to build additional 45M users against the backdrop of 10 competing services? At $5/net cost, that’s a required $180M further investment. This thing isn’t profitable from that perspective, obviously its not self funding at this point. So, you spend $180M on top of the cost of buying or IPOing this animal, call it an investment of $350M? If you have gross ten cents per call and it costs 7 cents to deliver, you’re netting 3 cents. On 200M/calls/mo x 12 x 3 cents, you have margin of $72M, net out huge SG&A (S especially) at say 10%, that leaves $48M, taxed at 45%, that leaves net of $26M at 20x P/E it’s worth $500M maybe 5 years from now (with very generous assumptions, since the cost of new users will be driven up given all the competing services and this one offering just the same as the others). That’s a 7% IRR in the best case? This hand isn’t even a pair of jacks.
I used $4/per new user but said $5 which I think more realistic. At $5 per new user, we’re talking a 4.5% IRR. I think you’d be better off in Treasuries?
If you factor in that I forgot your user base probably turns at LEAST 10% /year, this model needs another $25M in marketing costs/year to maintain that 50M users (BTW, that’s a heck of a lot of users, good luck). And one have to be pretty lucky to net 10 cents on average/call given partnering sharing costs at 10-40%. So in this scenario, let’s say your average net is 8 cents and by some miracle you can get cost per call down to five cents, that’s 3 cents net per call, so 8 cents x 200M/call month x 12 mos. is, call it $200M revenue, netting 3 cents or 38% on $200M revenue or $76M gross, less SG&A of 10% less steady state acquistion costs of $25M less taxes nets $18M. At 20x P/E thats just $360M value. But you invested $225M in marketing costs plus the cost of buying it to get there? Really can’t see how anyone could net even close to a minimum expectation of 20% IRR.
I wish these models well because I think its cool when people dream up giving things for free, but if you do the math it’s hard to make this work. Clearly, it’s not worth much today. Is this one of those broken models by Web 1.0ers that are still living in that distortion field? Guess well see. Just an opinion.