Skype North America's Don Albert interview - part 1 of 5
I interviewed Don Albert on Tuesday, 28 November 2006, over lunch at eBay's cafeteria. Albert is Skype's general manager for the United States and Canada, what Skype calls North America. This transcript is roughly edited. Jennifer Caukin, Skype's North America public relations director sat in.
The day before our talk, Skype started reorganizing, moving marketing functions to their London headquarters under chief marketing officer Henry Gomez.
Skype Journal: With marketing more centralized in London and engineering in Tallinn, what's here?
Don Albert: So Henry and the rest of the executive team thought it was really important to have a team on the ground. Because this market requires some special attention. Skype is not as well known or as well penetrated here as it is in Europe or Asia. We have a few marketing folks and a few business development folks here. I think our total team is probably ten or eleven people now. We have a couple of PR folks that you'll be getting to know, and someone that does promotions within North America.
We're also looking not so much at unique product for North America but at packaging, pricing, things like that, that might make sense for this market. I report to Henry and we have been working closely with the marketing functions over there and will continue to do so. We're not totally self sufficient here; there aren't enough of us to do everything.
Have you worked with Henry before?
A little bit.
Will the free SkypeOut continue in North America? Do you know yet?
We're getting pretty close to finalizing that and we'll probably be coming back to you in about two weeks.
How are you thinking about that decision?
The first thing is the program did everything that we wanted it to do. We saw a nice ramp up in new user acquisition in the U.S. and it stuck at the higher level, which was great. And we've seen a big surge in SkypeOut calling, so more people are trying SkypeOut, which is a good thing.
Jennifer Caukin: The calls on SkypeOut are beyond just North America; a lot them internationally too. Because people kind of adopt using it for their local and domestic calls going beyond as well.
Don Albert: Our revenue is back up above where it was pre-promotion, even though we're giving away all the U.S. and Canada calls. So we have got so many more users now that our international revenue has more than made up for what we gave upon the U.S. and Canada revenue. We viewed the promotion as a marketing expense; obviously it required investment on our part, paying all the termination fees. And the amount of calling in the U.S. and Canada went up 10X so those fees, especially as we get bigger, can get fairly significant.
Our Canadians all want to know about SkypeIn. What is Skype doing to get SkypeIn in Canada?
The issues really are regulatory in nature. Chris Libertelli, working out of our Washington office, is the right guy to talk to about that.
From where you sit, what business is Skype in?
I would say generically we're in the communications business. We try when we talk about our business both to consumers and to the press, to not define Skype as just cheap voice phone calls. I think you know the product very well and you can see how we're really trying to create a whole new way to communicate. Cheap voice calls are one benefit of using IP but there are many other benefits that we're working hard to get consumers excited about it, to communicate differently.
Jennifer Caukin: If I can just add, when you think of Skype it's expansive as well. It's cross platform. It's also across many different devices. So when we think about Skype for voice or video or SMS or for conference calling - all these different ways to communicate - but also across many different platforms too.
So what do you see about building Skype's awareness in North America? Beyond this promotion, I know you've been doing some advertising experiments. Do you think you're getting budget this next year?
Don Albert: We'll be getting some budget from our friend Henry, who obviously understands the importance and challenges of this market. But you still won't see big broadcast TV commercials from us. We will continue to invest in promotions. You saw "Skype Days of Summer" which worked really well for us in terms of introducing specific expat[] communities to the value of Skype calls to their home countries or countries where they have friends and family. So we'll continue to invest in things like that. And use those promotions combined with guerilla marketing aimed at specific communities to generate word of mouth among those communities. It worked very well for us so far.
Another area where we're going to try to get a lot better, especially here in North America, is working with our hardware partners. We've got some terrific partners that share our interest in growing the base here in North America. They have retail footprints, they have marketing budgets. How we can work more effectively with them to convey the Skype value proposition at point of sale, for example, or in their own marketing activities.
Do you have a co-op advertising program?
We're looking at some limited co-funding of specific marketing opportunities with them. For instance I don't know if you saw a college promotion we ran on Facebook. Last month we did that in conjunction with Sony Mylo, where we chipped in.
The social networks, the Facebooks, the MySpaces; what is your strategy for working with folks, getting Skype adopted in those hives of intense communication?
So we think they should all want to integrate Skype fully. And it would be of great benefit to their communities. We have or are having discussions with many of them. Some of them are owned by folks that have competing communications products, but I think we see tremendous opportunity and tremendous utility for their users. And those discussions continue. It makes a ton of sense to us.
Are you managing it as a business development and distribution alliance?
I think the way we view those deals is how can we help each other grow, how can we add value to their existing users, how can we help them attract new users from among the Skype community and vice versa.
Skype awareness is still pretty low among the general North America public. The economics that are driving adoption in the U.S. are really different than what drives Skype adoption everywhere else in the world. What are you doing to improve brand awareness in the U.S. in 2007?
I think you hit part of the nail on the head when you said the economics driving adoption are different here. So one of the things we're doing is targeting our limited marketed resources against target segments where the Skype value proposition is clearest, where they really can see some value. So for example mobile business professionals, small businesses, people with friends and family abroad who do a lot of international calling, even though they may have a cell phone plan and a landline plan, they still get why they need Skype. So that's still on the cost side.
I think the bigger challenge for us is to move away from being low cost voice calls. How do we continue to innovate and build features that make people want Skype because of the features, not because of the cheap voice calls? How do we make video calling, for example, something everyone wants to have? Or really convenient conference calling for small business?
So more focus on product and service benefits, because over time everyone will offer cheap phone.
continued Tuesday
