Flock to renewable advertising
Advertisers understand the concept of renewable advertising because they really like the idea of helping customers and a community live better lives, says Tom Higgins.
At his Sofia offices, Tom, chief executive of Yatoto.com, and Radoslav Tsonov, chief operating officer, are explaining the concept of their new generation of Bulgarian social network.
Yatoto (translated as “the flock”) launched in November 2013 by Tom Higgins and Elvin Guri, generates revenue from socially responsible advertisers, distributing 90 per cent of the net revenues back to society in the form of monetary awards to its users and their chosen causes and projects. The remaining 10 per cent of the revenue is invested in further development of the start-up.
Those causes are charitable endeavours needing to raise funds to implement their projects.
For projects, the guiding spirit is that a project should be one that improves the lives of people in Bulgaria, stimulating co-operation towards a common goal. Projects can be, for example, in the field of design, technology, photography, stage, dance, education or nature – and that is not a comprehensive list.
A requirement is that a project should be able to be implemented fully with 1000 leva.
Users – there are currently over 70 000 registered – go on to the social network, look at premium content, and click to support the cause and project of their choice. Like other social networks, users build up groups of friends that they share things with.
Users get “tickets” through new posts, through viewing advertising and by successfully inviting new users.
Each week, four winning projects are chosen, two personal and two causes. The winning projects are decided on the basis of the amount of tickets each got from users.
Tom explains, “Rado and I have been working together for many years, and discussing this concept from a long time”.
Note that advertising is a $500 billion annual global industry, he says, “we were thinking about how it would be possible to use this money for social good”.
The idea of Yatoto grew out of an earlier project, still going, called Club 50+, a social platform that is a hybrid between an online magazine, social network and social club, aimed at helping people over a certain age live a dignified, happy and productive life.
For Tom, the “flock” name represents “the way we view our users, a community of socially responsible people”. The stakeholders are three groups of users – individuals, the largest, NGOs and charity causes, using the network to raise funds, and socially responsible advertisers; he names, for example, Mtel and UniCredit Bulbank.
As of March 2015, the system has changed, with weekly instead of monthly awards, with smaller amounts of 1000 leva each awarded instead of the previous system of one award of 15 000 leva monthly. The idea behind the change was to spread out the support for good causes, casting the net wider.
“In Bulgaria, 1000 leva is not a lot of money but it also not a little – that can be used, for instance, for a playground, for medical supplies.”
Charitable organisations and individuals like the idea that awards are given on the basis of the amount of support they attract from society, rather than on the basis of a random draw. “To win, you need to go beyond your circle of friends of family, to persuade society that it is a good project.”
Rado says that of the awards made so far, 100 per cent of projects have been fulfilled as described in their bids.
He adds that short videos are made about winning projects. He describes one winning project, to buy inhalators for a neonatology clinic for premature babies. Other Yatoto users, touched by the project, topped up the award with some additional money.
“When we went there, a person that works in the clinic said that the five devices we brought meant that 20 babies were going to live. That’s mindblowing,” Rado says.
Tom says that the advertisers who have got involved in the network see it is a long-term project and so have been willing to work it into their advertising budgets. Rado adds that the connection between users and the ads that they click on is a very direct one, the result of a conscious and active choice: “we don’t charge for accidental clicks”.
So far, Rado says, there has been 250 000 leva in awards to more than 1200 people, close to 40 charities and more than 20 projects. In accordance with the rules, there are no partnerships with or involvements of political or religious organisations.
Yatoto has a team of 11, made up of five developers, an illustrator, a sales and a communications person and the chief executive and chief operations officer.
Bulgaria is by no means the final market for Yatoto, which in anyone’s terms is a unique project in the way in which it brings together advertising, charity and social components.
“When we are more comfortable, then we shall take it on outside Bulgaria, probably to the US,” Tom says. A number of factors will influence the taking and timing of the decision, including passing the 200 000 user mark in Bulgaria, which Tom hopes to see happen in 2016.
“We are working closely with major brands to get their feedback. To have some major international brands that have good experience in Bulgaria could open some doors in larger markets.”