Blue Calypso (BCYP) Platform Serves as Social Media Enabler
Facebook Inc. (NASDAQ: FB), Yelp Inc. (NASDAQ: YELP), Groupon Inc. (NASDAQ: GRPN) and other social media companies may have a lot of users, but many of them are struggling to find a way to help advertisers effectively reach those users. Blue Calypso Inc. (OTCQB: BCYP) has a social media technology platform that addresses this challenge by helping advertisers cultivate their social media presence.
Blue Calypso drives sales and consumer engagement for companies by mobilizing customers, fans, and employees to spread the company’s messages via social media. The company then tracks the sharing of these social messages and gives companies real-time feedback on consumer engagement and calls to action.
Products Addressing Two Macro Trends
Blue Calypso’s technology platform benefits from two strong macroeconomic trends within the advertising industry. First, according to Mobile Marketer, mobile advertising continues to grow at a faster rate than traditional online advertising, with an estimated 27% of mobile phone users clicking on ads. And second, two-thirds of all economic activity in the U.S. is influenced by shared opinions, according to an eMarketer reported cited in the company’s 10-K filing.
In fact, a recent whitepaper by MarketShare looked at brands in four categories to determine how much impact online and offline “social voice” (word of mouth referrals) had on marketing and sales. In these cases, social voice increased marketing effectiveness up to 54%, and as little as a 10% increase in social voice resulted in a sales lift of up to 1.5%.
Blue Calypso’s technology capitalizes on these trends by providing advertisers with a robust platform that can be accessed across all mobile devices, while engaging and incentivizing those users to share the brand’s messages. These products include EMGAGE™, which mobilizes employees and SocialEcho™, which mobilizes consumers and fans.
Strong Intellectual Property
Blue Calypso’s technologies are backed by a robust intellectual property portfolio, which includes valuable patents in mobile advertising and social media. U.S. Patent Numbers 7,664,516, 8,155,679, 8,438,055, 8,452,646 and 8,457,670 cover a basic method and system for peer-to-peer advertising between mobile communication devices.
Recently, the company has taken legal action against several popular social media companies believed to be infringing upon these patents, including Yelp, Groupon and LivingSocial. The first Markman Hearing from these lawsuits, which will take place in November 2013, will define the terms that will set the stage for the claims being made.
While these lawsuits could generate licensing income, the intellectual property rights also enable the firm to build new software products nearly exclusively in the peer-to-peer social media advertising space. The dramatic growth and size of this niche market means that these products could generate significant revenues as they gain traction among consumers.
Dual Opportunity for Investors
Blue Calypso represents an interesting play for investors in two ways. First, the company’s robust product line has already begun to generate revenue and addresses a large potential end market. And second, the company’s valuable patent portfolio could generate significant licensing income down the road.
For advertisers, EMGAGE™ and SocialEcho™ represent innovative solutions to a common problem – the inability to monetize their social media presence. Blue Calypso uses its proven, patented technology platform to help clients launch content and promotions into social media platforms. By combining the technology platform with its marketing and social expertise, Blue Calypso helps clients realize a positive business impact from their social media initiatives.
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