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Chat apps threaten to siphon ad dollars from social media giants / Chat apps “demand attention”

by on September 29, 2014 in Apps, FaceBook, Google, iPhone, Lead Article, LinkedIn, Marketing, Metrics, Mobile Marketing, Music, Pinterest, Social Media, TV, Twitter

With 21 million people following her on Facebook and 18 million on Twitter, pop singer Ariana Grande can’t personally chat with each of her loves, as she affectionately calls her fans.

So she and many other stars are spreading their messages through new-style social networks, via mobile apps that are more associated with private, intimate conversation, hoping that marketing in a cozier digital setting adds a breath of warmth and a dash of personality.

It’s the Internet’s equivalent of mailing postcards rather than plastering a billboard.

Grande, whose second album reached No. 1 this month on the Billboard 200 sales chart, could have shared on Twitter that her most embarrassing moment on stage was losing a shoe. The 21-year-old instead revealed the tidbit during a half-hour live text chat on Line, a smartphone app built for close friends to exchange instant messages.

It’s increasingly expensive to advertise on Facebook and Twitter, and the huge volume of information being posted creates uncertainty over what people actually notice. Chat apps such as Line, Kik, Snapchat, WeChat and Viber place marketing messages front and center to people enthusiastic enough to follow stars and brands on them.

Chat apps “demand attention,”

The apps threaten to siphon advertising dollars from the social media leaders, which are already starting to see chat apps overtake them as the most-used apps on smartphones, according to Forrester Research. Chat apps “demand attention,” said Rebecca Lieb, an analyst at the consulting firm Altimeter Group.

Chat apps are loaded with features that many teenagers and young adults find more alluring than either traditional social networks or basic SMS texting – animated smiley faces, words transformed into colorful digital stickers, drawing tools, quick photo-sharing, video and the like. In fact, sticker sales to Line’s 10 million users in the U.S. and 480 million abroad provide the bulk of the company’s revenue – $175 million worldwide in its most recent quarter.

Chat apps’ popularity is leading a wave of investment and experimentation as marketers charge after the coveted demographic. Music stars and youth-oriented companies are turning to chat apps as an alternative route to better-targeted publicity, and to show they’re hip.

Paul McCartney’s tour

When singer Paul McCartney’s tour headed to Japan, his team tapped Line and offered followers a free pack of stickers featuring his cartooned self. Line said that McCartney’s willingness to personally respond to Line fans paid off: Compared with his social media fans, Line users were three times more likely to engage with his posts. The CW series “America’s Next Top Model” and AMC’s “The Walking Dead” are using Line too.

“Instead of reaching multiple millions on Facebook, if we can reach the right people, it’s the right option,” said Tack Kim, a senior manager of business development at Tokyo-based Line’s Los Angeles office.

Line partners only with trending stars who can offer “high-quality” content, said Jeanie Han, a former Paramount Pictures executive who’s now chief executive of the chat app’s Euro-Americas unit. That’s left a long wait list of movie studios and other content owners that want Line accounts.

Kavi Halemane, executive vice president of digital at the Collective, a music management company, sought a deal with Line after hearing about it from Japanese friends and one of his part-Japanese clients, Linkin Park vocalist Mike Shinoda.

By the end of the year, Linkin Park plans to offer its 2 million Line fans a free digital sticker pack. The goal is to keep the rock band on people’s minds, Halemane said.

“Creating a presence on every social media network is not the right strategy, but we add platforms because we’re committing to it,” he said, expressing excitement about Line features such as video streaming.

Another chat app, Kik, based in Waterloo, Canada, has 150 million users worldwide and is the 25th most popular app of any kind in the U.S., according to tracking firm ComScore. Columbia Records and Syco Music worked with IPG Media Lab to promote a new album from teenage pop band One Direction on Kik. The band’s account drew more than 3 million visits, and users met a challenge to buy a total of 7,500 album copies through the app.

“That helped us prove out that this is really something we want to do going forward with other clients,” said Mel Wilson, head of strategy at IPG Media Lab.

The next challenge for Line and its competitors is persuading non-entertainment brands to use and advertise on them, said IPG’s Wilson.

Whether advertisers can appropriately inject themselves into the mix of emotional and trivial banter is still a concern. Too many useless vibrations in pockets and purses could alienate users and cause them to switch to a chat app with fewer distractions, Lieb said.

“Saying, ‘Click here, buy this laundry detergent’ won’t work,” she said. “They have to provide entertainment, education or utility that will help consumers welcome and embrace these messages.”



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