WhenU's CEO talks about keys to growth, desktop apps and WhenU as a quality permission-based behavioral solution.
Alan Chapell: The more privacy concepts that anyone in this space incorporates -- things like providing consumers with some level of access and transparency into the data being collected -- it would really take the winds out of the sails of those who say that this space is consumer unfriendly.
Bill Day: Behavioral is still a new thing-- and new things tend to be controversial. We don't want to remain controversial forever. One way to do this is to educate consumers by just giving them access. Someone who understands how WhenU's privacy model works -- that the data remains on the user's machine -- will be a calmer person. Education is big part… one of our advantages is that we can communicate with the user both during installation and on an ongoing basis. I agree with you that the more transparency those in the space bring to the consumer experience, the better off everyone will be. There is a "Big Brother" aspect to BT that needs to be demystified.
Chapell: On the OMMA Hollywood panel recently, you mentioned that you guys are growing your user base significantly. What are the keys behind this growth, particularly in light of recent news that others in this space appear to be dealing with shrinking user bases or exiting the space altogether?
Day: As far as I know, everyone in the space -- other than us -- is dealing with shrinking user bases and revenue. And there are a couple keys: One was moving forward early on a new strategy in a proactive voluntary way. From a consumer standpoint, we've done a couple of things well that have allowed the base to grow. One is our distribution method. Co-bundling with our software partners has worked very well for us. It allows us to establish a degree of value with the consumer, since the consumer can always make a choice. With most of our partners, you have to pay something to do something-- that's a value proposition. You can't get access to the partner's software for free unless you agree to see the ads-- we've made the deal very clear up front and people respond to that.
At the same time, we've worked very hard to improve the experience of the ads. I referenced frequency caps, the idea of greater targeting capability; you try to make the ad experience as high quality as possible, only showing an ad when it is most likely to be considered useful and welcomed by the consumer.
The last thing is focusing on user communications-- the retention side of the business. While I can't say that we have things licked there, I think our retention has been improving, and that adds to the overall user base as well.
Chapell: The downloadable software space would seem fairly robust these days. One application that I've kind of kept my eye on recently is Ding by Southwest Airlines. If Ding is successful, I can certainly envision others in the retail and travel space following suit with their own desktop applications. Do you think others will announce their own desktop applications, and do you view that as a potential threat to your business?
Day: Actually, I don't think it is, and I'll explain why.
First of all, though, I do think you will see others follow Southwest Airlines' lead. I agree the market for downloadable apps is very robust. I know there have been spyware issues, but consumers, with anti-spyware tools, still seem in control of their desktops. We just look at it empirically: the number of downloads occurring is increasing very rapidly.
Ding is a great example of a corporation saying, hey, we can take advantage of this. So I can certainly imagine another travel company doing that and communicating with their best customers.
The advantage WhenU has is that it's a horizontal play. I'm not a big fan of vertical software solutions when it comes to these sorts of applications. The reason is, for the vast majority of consumers, downloading software is still an effort. If you think, vertically, how often does someone look for a date, or buy a car, or book travel or shop online? You do these things once a month, maybe three times a year-- not enough to support a downloadable application.
The WhenU opportunity is to play horizontally and offer these values to users when they need them, all in an all-in-one sort of situation. I think Southwest or others can develop their own complimentary applications, but I think they're still going to value partnering with a third party like us because they'll always want more users, who they won't be able to reach through their direct efforts.
So the Southwest application is great for us. It just drives a greater degree of consumer awareness and comfort with downloadable software, which really aids us.
Chapell: Any final thoughts?
Day: I think behavioral is in a place to grow well. One of the impediments to online advertising's growth is a lack of targeting for those consumers who don't target logically. The fundamental rocket power that's going to propel the space is, I think, going to be behavioral targeting. The most interesting thing for WhenU continues to be the transition from adware, and all the controversy, to being recognized as a quality permission-based behavioral solution.