Saturday, November 27, 2010

Stickybits: Fun for free?

There is a new way to use your mobile phone while shopping these days. The new phone app, Stickybits, allows you to scan bar codes to win prizes and score discounts on products. Their "Explore and Score" motto mixed with their bubblegum website makes you feel like a kid again. Remember how much we all loved scavenger hunts? This time though, there could beer and more waiting at the end of the rainbow.

To add to the fun, they have created programmable bar-codes that you can leave on products with a message including audio, video, text, or photo. As people find the bar-codes they can leave their own message, creating a stream as the product changes hands. Combine that with geo-tagging and you have a whole new way to communication via product dispersion. It reminds of, but more temporary. (Money is made to last unlike a Coke can.)

While this all sounds very fun and engaging for the consumer, where is the return on investment for Stickybits? According to their website, the app is free and the prizes are free. They still collect your credit card info and shipping address. Their intent with these items seems harmless enough. They sometimes make the user pay shipping and handling and having your address is required to send your free prize.

As of March 2010, Stickybits had received $1.9M in funding (see the Tech Crunch article). The problem is how are these investors going to earn a return on their investment? My guess: they're selling your data. Marketing data is lucrative, but difficult to get. Facebook has been routinely selling data about it's users for years. When the alternative for companies is to engage in costly focus groups and market surveys, Facebook data is gold mine of uninhibited consumer thoughts on products. In a Feb 2009 article from the Guardian, Facebook Lexicon is mentioned as a tool that allows users to track topics and postings on people's walls. Add this to Facebook's advertising revenue and you have a company valued at more than $65 billion. Facebook has laid the path, now Stickybits can use their model to generate revenues the same way.

I think Stickybits will possibly eclipse Facebook in lucrative data, if they can generate enough users. The key is that Stickybits is linking the users with actual products. To the makers of Coca-Cola, Stickybits means they have direct access to how many people are scanning their bar-codes, what they are saying about that exact product on the message stream, and where the products are traveling. If I were a brand manager, I would be jumping with joy. Easy access to data? Yes, please!

Stickybits' combination of products and social networking looks like fun and games to users. To a business, it's a dream come true.