In this Open Briefing®, Executive Chairman Nigel Lee discusses:

- The progress of Veterans Call and Ralli

- Potential across new opportunities including white label agreements

- Marketing of Activistic’s apps and growing the user base

Record of interview:

openbriefing.com

Can you discuss the growth in download numbers and how many people have donated through the Veterans Call (VC) app?

Executive Chairman Nigel Lee

I should be clear that the model is working, we have donations and downloads today and they are building. The download rate has been steadily building from hundreds per week to thousands per day and we are now close to 50,000 downloads. The engagement in the app, that is people registering and exploring the app as well as donating, is increasing week on week.
Our experience thus far has shown that there are drop off points in the experience for consumers, including at the sign-up screen. We are in the midst of changes (to be released end of the month) that will increase the engagement of people in the app.  

openbriefing.com

The recent cash quarterly did not show any donation amounts even though you say you have people on the platform? Can you take a moment to explain the business model a little – especially the revenue to cash cycle?

Executive Chairman Nigel Lee

The first thing to note about the business model for Activistic is that it is a “direct revenue share model”. Many app and internet models are indirect, that is making money from eyeballs and hope to get advertising). In the case of the Activistic platforms this is not the case. What this means is that as donations happen then revenue occurs. In fact, 15% of the donated amount comes as revenue to Activistic. The reason that this didn’t appear in the recent cash statement is that there is a delay associated with the cash cycle. For example, if I donated on 1 January 2016, $10 to Veterans Call, then the actual cash (ie $1.50) will only get to Activistic in April 2016. I first need to pay my mobile bill (30-45 days), then the telcos pay the money to the charity through our partner aggregator MGF (30-45 days) and we bill the charity for 15% of the proceeds (30-45 days).
This is a normal lead/lag for the cash cycle. That doesn’t mean we do not have revenues logged, it simply means the cash lags. The good news though is that having made a $10 donation on 1 January then that continues each month and so as more people join the platform the monthly cash number builds steadily.
So while there was no cash received in the first quarter, given we’ve only been actively marketing VC since January, this does not mean no donations and no revenue.

openbriefing.com

You have talked recently in the way of improvements to the technology, what are they and what are they aiming to achieve?

Executive Chairman Nigel Lee

The VC app is working well today, as is the beta version of Ralli as it currently stands. The app has launched successfully in both geographies and feedback has been excellent, which I’ll touch on further.
While the technology is sound in its current state, there is a registration screen up front which has resulted in some friction points and drop offs. By making some changes over the next month related to this we believe we will get a dramatic increase in adoption of the app.

openbriefing.com

Can you provide a general overview of where Activistic management is currently focusing its attention?

Executive Chairman Nigel Lee

Activistic is delivering a revolution to the charity sector by providing a unique approach to allowing everyone to make micro-donations through their mobile phone – charged direct to their phone bill. You might recall that the reason this space is so interesting is its scale (over USD 360 billion of donations in the US last year), and its unique state today (less than 10% of donations are online or mobile and over 95% are one-off). We are aiming to change that. The platform has been in market and we have been marketing to it for the last quarter and there has been real progress.
There are three key things that we are focused on today, downloads, donations and deals. In particular, the downloads and donations are targeted around the VC platform as it is the most advanced of the product set. We also have a number of deals both in terms of additional charities to add to the VC platform and distribution partnerships that we are developing and these will help to accelerate the uptake of VC. In addition, we are in various stages of discussion with a range of parties – from celebrities, charity festival organisations and major domestic and global charities regarding white labelling the platform. Ralli – our global charities app – is in technical beta in the UK and we are working with charities there to craft the right approach to getting traction.

openbriefing.com

Can you discuss the traction Activistic is achieving with VC?

Executive Chairman Nigel Lee

We are already seeing downloads and revenue today. Whilst the beta launch happened mid-November last year we have only actively marketed the platform since January. In that time, we have seen an increasing level of downloads and donations week on week. Currently we have nearly 50,000 downloads of the app with 14% of people registering and 6% donating. Through this we have been learning a great deal about what works in the app, what we need to change to improve conversions and what assets we can use from the charities, while also gaining interest from distribution partners.

openbriefing.com

Are you receiving any feedback from early adopters of the VC app?

Executive Chairman Nigel Lee

The nice thing about digital products to consumers is that the feedback loop is immediate – you can track everything from the effectiveness of ads by channel, through to the progress of consumers at each stage, or from the point of click to download through to each action within an app product. We can subsequently change the product in approximately two weeks to improve the statistics. We are now into the cycle with VC of that learn, launch, grow, learn, change, release, improve approach, having started to get mass downloads and engagement occurring.
To date on the App Store and Google Play we have more than 200 unique comments and our average rating is above 4.3 (out of 5). This is outstanding for an app at such an early stage, and as previously mentioned we are continuing to improve the product further.

openbriefing.com

What is the status of Ralli?

Executive Chairman Nigel Lee

Ralli has taken a bit of a back seat. We know it’s a critical step in the UK to ensure that the market has a reference point but the building of donors there will require a different strategy. We have a beta version in market today and will look to market it in conjunction with the partner charities later in this quarter.

openbriefing.com

What progress has been made on white label agreements?

Executive Chairman Nigel Lee

We have made excellent progress but as we have told the market previously these things take time. We are actively engaged with parties ranging from major charities through to celebrities and large festival/concert organisations. We were hoping to conclude one of those in Q1 but it’s taken a little longer to work through than planned. The good news however is that everyone we are speaking with is keen to make something happen. It’s really a question of who first. We are confident that a first white label transaction can be achieved in the short term but of course we are dealing with large celebrity and organisations so the timing is not always within our control for completion of an agreement.

openbriefing.com

Celebrity charities have previously been mentioned as a key target market, how has this progressed?

Executive Chairman Nigel Lee

As I mentioned, we have a number of celebrity related discussions ongoing. I can’t reveal exactly which parties, but they are major stars and we have negotiations with several different agencies at this point. In addition, we have direct discussions with a number of organisations that hold major charity festivals and concert events (some of which have global reach) who are also looking for Activistic to white label a solution for them to create a route to collecting donations and engaging donors.

openbriefing.com

Can you provide an update on Church Call and Patriots Call?

Executive Chairman Nigel Lee

Faith based giving is a market of over $100 billion in the US and political giving is an area ripe for change. The VC platform and its increase in downloads and engagement, combined with the uniqueness and visibility it is providing, is resulting in inbound calls and access to churches and political parties. In the faith based area, we have brought Church Army on to the Ralli platform in the UK and they have expressed their desire to move to a white label approach over time. In the US we continue to have discussions with church organisations that are interested in the platform. Political giving is also progressing. Around October last year we discovered, in conjunction with our partner aggregator Mobile Giving Foundation (MGF), that the telecoms companies in the US have traditionally not supported the political giving process. As a result, whilst we continued to have discussions and make progress with candidates and political parties, we had de-emphasised that effort. However, as recent as this month they have changed their direction to allow federal election activities to be supported, and this is a major breakthrough that will allow the Activistic value proposition to now become a focus for the candidates and parties go forward.

openbriefing.com

What is being done in the way of marketing Activistic’s available apps?

Executive Chairman Nigel Lee

With the nature of the charity sector being largely offline and mostly one-off, finding the right way to make apps visible to donors, get them to download and then engage, is a learning process. Our partners and charities have some assets that can be useful in this process, but even then, items like their email lists of donors, some of their websites and their “on the ground” assets are proving not to be that effective. To date we have engaged a specialist app marketing agency called SwitchedOnMedia to help in this process using their ad delivery platforms and experience.
The recent addition of Association of US Army (AUSA) to the platform also provides us with an opportunity to use partnership assets to help with the app distribution approach. AUSA has a large number of current corporate partnerships that we are jointly initiating discussion with for them to help use their assets to promote the VC app to help AUSA and veterans causes. We also have some direct discussions at late stage with distribution partnerships that will be able to immediately give VC visibility to very large audiences with whom veteran’s issues resonate. These arrangements are likely to be revenue share related and thus help mitigate the need for upfront marketing expense while creating a win/win/win for Activistic, the distribution partner and the VC charities.

openbriefing.com

What potential is there for entering political donations for the upcoming US elections?

Executive Chairman Nigel Lee

Political giving via app is nascent, but grassroots fundraising in the political arena is growing with every state, senate and national campaign. As I described above, the telco companies in the US have traditionally not allowed direct billing to be used to raise funds for political purposes. Whilst we have been speaking with political candidates and parties about the Activistic platform – and with a very positive response from them all – up until as late as last month, the technical route to enable it was opaque. It is now clear that the telco companies will support this approach and we can begin to pursue a deal in the political space. While we are at the eleventh hour in terms of the US national election this year, we will aggressively pursue any possibilities available. The elections at the federal, governor and senate level over the coming four years are a more realistic target and we are already planning a route to have political giving enabled for those elections by Q1 next year.

openbriefing.com

Early next month shares come off escrow and enter the market. Does this mean there will be a big sell down of these shares at that point?

Executive Chairman Nigel Lee

The escrow process is an important part of the protection of value for shareholders. The shares that come to market next month represent shares held by pre-RTO investors. Most of these holders became involved in Activistic in its formation and invested for the long run. Our discussions with a number of them indicate they are keen to remain on the journey given the huge potential of Activistic so we do not envisage a large sell down of shares, particularly at current prices.

openbriefing.com

Finally, it seems that Australia is also a very philanthropic geography and that this platform could have a profound effect on the marketplace here also. At the RTO you announced a partnership with Royal Flying Doctors locally, what’s stopping you from bringing the platform here?

Executive Chairman Nigel Lee

It would be great to have the platform available to charities in our own backyard, but we also need to remember that the industry in the US and in the UK is much larger than here. These geographies therefore have to be our priority. In addition, though, the telco and aggregator infrastructure in Australia does not support the Activistic repeat giving direct carrier billing model. Perhaps later in the year that may change, and we remain engaged with our partner charities, the telcos and aggregators locally should that happen. In the interim we are full steam ahead to tackle the US and UK markets in 2016.    

 

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