This week Bizcommunity.com caught up with CEO Trevor Ormerod and sales and marketing director Wayne Bischoff in Sandton to find out more about the company's operations.
"We have a partnership with a mobile network operator whereby we will have access to their subscriber base - both prepaid and contract. They will market the product. In other ways, they will offer airtime incentives to their subscribers - both prepaid and contract - to encourage them to sign up with us," Ormerod says.
"In return the subscribers will opt-in and provide valuable information back to us. We will be asking them more segmented questions - not only age and income. And we will take that information and package it for our advertisers.
"Subscribers will receive free airtime from the network operator and discounted coupons and vouchers from our advertisers, targeted to specific segments of the subscriber base that can be redeemed at major retailers and points of sale across the country."
There are currently 50 million 38 million cellphones and 50 million SIM connections in South Africa, according to a recent study conducted by World Wide Worx in collaboration with First National Bank.
And Spectrum Mobile SA, which will have access to a database of 18 million subscribers, is taking advantage of that massive boom to strike a crucial blow right at the heart of the industry by going hunting where nobody has ever ventured before.
"The way mobile marketing is being done currently is that you have to start building a database by running competitions and promotions. Our biggest advantage is that we already have a subscriber base that we can tap in, and that database has a demographic aspect," Ormerod explains.
"Advertisers will only pay for engagement and interaction, so there is no risk whatsoever. Besides, we will target subscribers as individuals, not blindly, and this means there will be no wastage from the mobile network operator," Bischoff points out.
Furthermore, Ormerod says Spectrum Mobile will use the Unstructured Supplementary Service Data (USSD), which is a protocol used by GSM cellular telephones to communicate with the service provider's computers.
"It is a very much selected process," Ormerod insists, adding that USSD ensures a heightened interaction between consumers and advertisers.
"Firstly, it encourages you to interact, and secondly it is compatible with any phone model."
Asked whether they are braced for competition in a tight market with few opportunities, Ormerod says: "Of course. We know that competition will come but it will take some years, probably three to four years, because of the developments we have done, including aspects around the segmentation models.
"You will register with us, and we will know your details. And every time you use your voucher we will automatically know that a certain man or woman is using that voucher. We can track your buying habits and purchases and we will know that you are in a certain area.
"So, strategically and tactically there are a lot of opportunities."
Neither Ormerod nor Bischoff would disclose the name of the mobile network operator, due to the behind-the-scenes negotiations and paperwork procedures currently in progress.
Spectrum Mobile SA is looking forward to expand into Africa in the next seven months or so to take its new paradigm shift in mobile marketing to higher levels.
Corrected at 4.01pm, 16 February 2011
