BlackBerry Turns to Ads to Get Back In the Social Messaging Race

The Ailing Handset-Maker Invites Advertisers Into BBM

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It's hard to believe, but BlackBerry once had a huge headstart on the hottest new thing in tech. The Canadian device-maker unveiled BlackBerry Messenger, a mobile chatting platform, in 2006, three years before WhatsApp was even born.

But BlackBerry bet on its hardware---and lost. When handset sales plummeted, Messenger, later shortened to BBM, a service stuck on one operating system, saw rivals zoom past. WhatsApp claims 450 million users, next to 85 million for BBM. On the day that BlackBerry executives spoke with Ad Age, Tango, one of a cornucopia of popular messaging apps, picked up a $280 million investment from Alibaba and boasted a user base of 200 million.

Yet BlackBerry isn't surrendering. In October, BBM was opened up to Android and iOS, spurring 10 million downloads in one day, according to BlackBerry. A month later, the company launched BBM Channels, a social platform for individual users and companies built within the messaging application. Brands like Rolling Stone, Virgin Atlantic and MercedesAMGPetronas, the F1 racing team, added their own channels, which BBM subscribers can sign up to follow.

Next week BlackBerry plans to introduce two new marketing features in a bid to make BBM a cash cow: sponsored content and a virtual goods store that opens with branded "stickers" for users to share. They could be a harbinger of how other messaging apps will attempt to monetize. And it may be the last hurrah for BlackBerry---who has seen an exodus of executive leadership, serious cutbacks, and waves of acquisition rumors---to resuscitate itself.

Ad Age spoke with David Proulx, senior director of business development for BBM. Excerpts:

Ad Age: What is your strategy behind BBM Channels?

David Proulx: Media consumption is moving to mobile---we all know that; we all acknowledge that. The investment in the medium from marketers has lagged, because it's hard. Traditional forms don't really work.

SMS is still a very viable marketing tool, but SMS is by nature lo-fi. And it's very economically upside-down, because you're paying a carrier to traffic it. But SMS is cool because it supports the thesis that messaging and communication are core to the mobile experience. If you're going to reach somebody on their phone, if you can get them inside that communication experience in a way that is non-intrusive, you're going to win.

The other approach is to build apps. Consumer-product brands: they're all building apps today, because they've been indoctrinated that that's the way to get a rich consumer experience on mobile. But it's really expensive. You've got to build multiple apps for multiple platforms; you've got to figure out how you keep that message 'on-brand.' Assuming you get that right, you've now got the discovery and engagemnet part---being buried out in the long-tail of the app store, along with the other 90% of apps that never get downloaded at all.

So, looking at those three options---SMS, messaging, as well as building apps for a brand---we've sort of tried to marry the best element of all of that inside of BBM Channels. It gives you a branded inbox on the device.

Ad Age: What do the new advertising tools within BBM mean for marketers?

Mr. Proulx: Everything we've described is part of the organic experience. You're getting an application built inside BBM. So you don't have to worry about driving a download. You don't have to worry about building the application yourself.

It's all native. No banners to be seen. Each of the units is expendable.

Ad Age: Will you have similar mobile ad rates to Facebook?

Mr. Proulx: Not necessarily, no. We're not benchmarking solely off Facebook or Twitter, but we acknowledge that there's a market we're participating in. Right now, we're taking the product to market. We're bringing advertisers in. It's about how to accurately reflect value.

Ad Age: You have a fairly extensive user base in developing countries, like Indonesia and Nigeria. What does that mean for advertisers?

Mr. Proulx: It's a pretty cool opportunity for a marketer. You could look at the developed world and say, Well, I've got a whole bunch of digital and mobile enagement platforms. What about the next billion? And in places like Asia-Pacific, Middle East, Africa, where BBM is really, really strong, our proposition to a marketer focused on those markets is: Here's not just another mobile channel, but here's maybe the only digital channel. And where the audience is dense enough, you've got near ubiquitous reach.

Ad Age: Jan Kuom, the CEO of WhatsApp, has pledged an ad won't run on his company's product. Can ads work on social messaging apps?

Mr. Proulx: It's important to distinguish between the core messaging utility with an app like BBM or WhatsApp (which we fully agree should never be compromised by an ad) and an experience like BBM Channels, where we're providing a vehicle for users to find new and engaging content that they can discuss with other BBM subscribrers. And we provide marketers or brands the vehicle to reach those users in a way that is non-intrusive.

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