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May 31, 2006
Virgin Mobile: Watch Ads, Earn Minutes

Virgin Mobile USA plans to launch a program that lets people earn one minute of cell phone talk time by watching a 30-second commercial on a computer or receiving text messages on their phones and answering questions, the New York Times reported.

The program, called SugarMama, is scheduled to be available on June 14 and will be the first ad-supported cell phone service in the United States.

Pepsi Co. and Microsoft Corp. are two advertisers that have signed on the program.

SugarMama offers consumers up to 75 minutes of free talk time per month.

"Sugar Mama's deal for free airtime in return for watching ads looks sweet at first. but my concern is that when users realize they can only earn a max of 75 minutes per month, it may turn sour. Average use on cell phones is about 700 minutes per month -- 'working' to get 75 minutes of that free may just not be sweet enough," says Joyce Schwarz, iMedia contributor. "This is a case where a little bit of marketing may not go a long way. Recently announced competitor Xero is promising to go whole hog in the fall giving away phones for free and dangling the carrot of free service for watching TV-type ads. There's no doubt that advertising offers great revenue opportunity for mobile carriers, but my call is that it's much more valuable when it fully subsidizes services such as watch ads and you get free games or free texting. Even free cartons of Pepsi might be a better incentive."

WHITE PAPER LIBRARY

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