While watching the Super Bowl last week, the following commercial from kgb (Yes, they keep the company name lower case, I immediately do not like them). My friends and I are all 22 and 23 year olds so we were familiar with the service they provide. In brief, kgb takes text message questions (Any question) and provides an answer, at a cost of $0.99. A couple of months ago, a few of us were at a bar without an wireless connection and we needed an answer. This gave us a chance to see if this kgb thing worked. They came through. The service works just as described with a quick, precise answer being provided immediately (We needed to know what was the name and age of the Dos Equis Most Interesting Man in the World). Worked like a charm; never even considered using it again. This led us to this question on Sunday, how exactly could kgb make enough money to support a Super Bowl commercial (going rate of $3 million)? We are headed towards a world in which we will always be connected to the internet. Most phones released now have some sort of connection and these are only providing a more complete, full functioning experience. Networks are getting faster and covering a larger area. It would seem like now would be the worst time to push a service like kgb. Let the investigation begin.
First thing I didn't know about kgb: it is an acronym (Knowledge Generation Bureau). Please do not confuse it with the real KGB, the Soviet intelligence unit, as this may lead to some problems. Problems involving your "disappearance" in the middle of the night, if you get my drift. While kgb is the name of the company, it is not the center of the business. I'll let the official summary from the kgb website explain their structure (highlights added):
kgb (www.kgb.com) is a privately held, New York-based company and the world's largest independent provider of directory assistance and enhanced information services. During its fifteen year history, kgb has built some of the most successful and recognizable retail brands in the telecommunications and enhanced information services sector. kgb's European retail brands include The Number 118 118 in the United Kingdom and Le Numero 118 218 in France, both of which have the largest market share in their respective markets. kgb is also the largest and fastest-growing independent wholesale directory assistance service provider in the U.S.
kgb has pioneered the provision of a broad range of wholesale and retail information services beyond traditional directory assistance services, including call completion, movie listings, train schedules, price comparisons and "Ask Us Anything" service across multiple platforms, including mobile and landline phones, SMS and the Internet. In January 2009 kgb launched its U.S. flagship text answer service, kgb 542542 (kgbkgb) following the success of kgb's similar "Ask Us Anything" premium text answer service in the United Kingdom. Last year kgb served more than a hundred million consumers globally and answered nearly a billion questions.
kgb has pioneered the provision of a broad range of wholesale and retail information services beyond traditional directory assistance services, including call completion, movie listings, train schedules, price comparisons and "Ask Us Anything" service across multiple platforms, including mobile and landline phones, SMS and the Internet. In January 2009 kgb launched its U.S. flagship text answer service, kgb 542542 (kgbkgb) following the success of kgb's similar "Ask Us Anything" premium text answer service in the United Kingdom. Last year kgb served more than a hundred million consumers globally and answered nearly a billion questions.
Read that last line again. 100 million consumers!? Nearly a billion questions!? I am shocked. Who are these people that are using this service? In a Time piece, Bruce Stewart, KGB's CEO of mobile and digital, explains how he wants kgb to fit into the public's minds.
OK, Bruce, you want to be the know-it-all that we all turn to, I get that. But you know who that person is now in 2010? His name is Google, he has his act together and he works pro-bono. You might also want to look around in your own neighborhood. ChaCha has been living around the corner for a while now. Have you guys met?
"When you want to know something, you text your friend or someone who might know. We are looking to be that someone."
Here is the summary of ChaCha from their website (Sorry for the deja vu):
Sounds awfully familiar, huh? ChaCha even has the added benefit of being free. The trade off?: the responses you get through ChaCha have ads in them. You be the judge, is it worth it to pay $0.99 for a text message sans ads? Personally, I think not.ChaCha is like having a smart friend you can call or text for answers on your cell phone anytime for free! ChaCha works with virtually every provider and allows people with any mobile phone device - from basic flip phones to advanced smart phones - to ask any question in conversational English and receive an accurate answer as a text message in just a few minutes.
With what you know about these two services, you would expect kgb would employ experts to get to the bottom of your questions while ChaCha might simply be one guy sitting in his basement. Not so fast. The companies have the same basic set up. If you are so inclined, you can become a kgb "Agent" or a ChaCha "Expeditor, Generalist, Specialist, or Transcriber" with little more than passing a simple test and doing some brief training. You read correctly, the free ChaCha service is actually more complex and well organized than the premium kgb service. Nothing about this makes sense.
Unless kgb is twisting the facts by coding the inquiries into their directory services as "questions", then we have a true miracle. Millions of people are making a clear non-rational choice. Imagine going to a concert. You arrive and are given two entrance options. The door on the right allows you to walk in for free and sit in the lower section of the arena. The door on the left costs $25 and you have to sit in the upper bowl. If the world works as kgb and ChaCha illustrate, then the upper section would be full and no one would be sitting in the closer section. Pure madness.
My best bet is that the marketing effort from kgb is proving to be the difference, as I have never seen as ChaCha commercial anywhere. If this is the case, then the Super Bowl commercial made more sense than I could have imagined. The CEO of kgb would have been willing to pay any amount for the exposure. Why? Because it is clearly their only advantage.
If anyone has any insight into this very strange situation, please let me know.
Or maybe I should just text kgb: "How are you making so much money with much better alternatives available?" - send.
GRM
