Kids Can Text, Call -- All Without a Cellphone

Ad-Supported Pinger Draws 8 Million Users, Including Tots Too Young for Their Own Phones

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No phone? No problem.

Virtually no one older than 25 uses it, but Pinger, an app that turns iPod Touches, a parent's castoff iPhone without a service plan, or Wi-Fi-only iPads into "phones" with texting and calling capability, has drawn 8 million active users, with 80% of them between the ages of 12 and 24.

Pinger assigns phone numbers and, using software and Wi-Fi, allows kids to call and text for free in exchange for viewing advertising. "We turn non-phones into phones," said Pinger CMO Terrence Sweeney. Especially for the playground set.

Pinger and TextFree users (TextFree is the predecessor company) send more than 2 billion texts and use 75 million voice minutes every month. Mr. Sweeney said that Pinger is the fifth-most-installed app on iOS devices, and is now on almost 20% of them, and is the seventh-largest carrier in the country by SMS volume.

Pinger makes money with its ad-supported apps, bringing in 60¢ to 75¢ per month on every user, Mr. Sweeney said. With the company coming off its best quarter ever, it's on target to hit $30 million in annual revenue, almost all advertising generated. Its cost-per-thousand ranges between 25¢ and $4 with averages of around $1 at the end of 2012.

Pinger runs a variety of advertising within its apps, including banner ads across the bottom of the mobile screen, full-screen "pop up" ads that can appear after a text or voice call and promotional ads where kids can add additional voice minutes by doing things such as watching a movie trailer or signing up for an email newsletter. Among its advertisers are Paramount Studios, Universal Studios, Macy's, Gatorade and Activision's "Call of Duty."

"Call of Duty" -- for young kids? Pinger says it has a solution through age restrictions. Its users register and include their age during registration so they can be targeted, or restricted, from seeing certain kinds of content. An R-rated trailer, for instance, can be allowed on only those accounts registered to 17-plus users. Mr. Sweeney said Pinger has "turned down huge ad buys because we deemed them inappropriate for our audience."

Last month Pinger added a new ad vehicle it calls "buzzwords." When a user types a word in a text message that Pinger has predetermined as a buzzword, such as pizza or movie, for instance, the word will show up as underlined and is clickable. When clicked, extra information pops up, such as a listing of local pizza parlors or a list of shows and times at a nearby cinema. Pinger doesn't have any buzzword advertisers yet, however. Most of its advertising is done through ad networks, Mr. Sweeney said, although it is building out its own direct-sales team.

Parents and privacy advocates don't seem overly concerned about Pinger. Parent and kid web reviewers for child and family media watchdog Common Sense Media gave the app four stars with parents recommending TextFree for age 11 and up.

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