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Let's Talk About LINE

  |  January 31, 2013   |  Comments   |  

As marketers, here are several ways we can take advantage of this service.

LINE celebrated 2013 by signing up its 100 millionth user globally. More impressive is the speed in which it has attained these numbers - 19 months - almost triple the pace in which Facebook hit the same milestone. Despite LINE being a service from South Korea's search giant Naver, to date Japan is the largest market for the service, and also its most robust marketing performer. Currently there are 40 million "users" of the Japanese service (the final "real number is likely to be lower, as it doesn't count duplicate accounts created from phone upgrades, etc), with a regular active rate of 40% meaning that at a minimum about 16 million people use the service in some form on a regular basis.

Though there is a "social" aspect to the service, LINE isn't really a social network per se - it's a smartphone-based free voice and text service similar (but differentiated) to Skype or Viber, recently spawning competitors with identical business models in Japan like DeNA's "Comm"  and Yahoo Japan backed venture Kakao.

The first key feature to understand about LINE is that it's an app that is only available for smartphones. The LINE app has had time at the #1 slot in the App Store in over 24 countries, and once installed it syncs your phone number and contact list to the service, allowing you to make free calls and texts to friends and acquaintances via the application. It's not surprising that a majority of the users (60 percent) are 12-29 years of age; circumventing the higher text and talk charges is an instant benefit of the service to relatively cash-strapped youngsters looking for ways to cut down on their mobile bills. And with a 40 percent daily use rate of the service, to date LINE probably has to be one of the most effective ways to reach this hard to "pin down" online demographic.

Breakdown of LINE demographics (from Macromill, June 2012)

What's the secret behind the service growth?

What separates LINE from standard smartphone-based text and calling is how it has been able to enhance the experience of simple chat and text by bringing a unique, almost Japanese "game center" style system of reward and entertainment to the format, and placed it alongside a robust ecosystem that includes brand interaction, local business coupons, and games.

Here's an overview of the key "popular" features of the service:

1. Stamps/Stickers: These are unique emoticons/illustrations that users can send back and forth in chats. A number of these are free (including brand sponsored stickers), but there are limited versions that are also available for sale. In the first two months of the service release last year this generated over 350 million yen (US$3.9 million) in revenue for LINE.

2.  LINE Camera: Camera application that turns your smartphone into a portable print-club (purikura) machine with a variety of frames, filters, and decorative stamps.

3.  A complete "local" ecosystem of tools and services: Outside of calls and SMS, the camera and stamps are the main draw to the service, but the rolling out of local and location-based services such as coupons, games, and group chats (through LINE BAND) have helped keep the service fresh, while creating more value for users as the service has grown and expanded.

As marketers, how can we take advantage of these services:

Enhance drive to store/web with a sponsored account:

Brands have been very quick to take to the service, especially in Japan. The big difference between LINE and a service like Facebook is that an official "page" or account requires an ongoing monthly fee, which will allow the brand to send direct messages up to twice a week to their followers' smartphones. The initial cost layout aside, this account service that is suited for brands that are national in scope and scale and can take advantage of location and incentives to drive people from "mobile" to online/in-store. Some brands, such as Coca-Cola use it to help bolster their strong CRM offerings, while other brands such as Uniqlo low-cost spinoff G.U. use it as they would traditional communication tactics like flyer inserts in newspapers - advertising sales and new product releases.

Despite the relatively steep initial outlay for an account, one of the benefits of these accounts is priority placement in LINE that allows sponsors to attract a large number of followers. Active LINE accounts have staggering followings - national convenience chain Lawson, an astounding 6 million followers - about 15 times higher than its Facebook fan page count of 400,000.

Brand awareness and campaign support through stamps/stickers:

LINE also offers a "brand awareness" type product through the purchase of customized stamps, typically featuring the characters and mascots that brands have developed. Once downloaded by users, these stamps can spread virally within LINE, as they are used directly in text conversations between friends, as well as being included in photos that are passed around in the service.

Conclusion?

The question that we are asked most often is "should I use LINE or Facebook (or Twitter, or some other SNS)? My answer is usually that both are still necessary - think of Facebook as your daily brand newspaper - engaging people through content, interesting stories, and as a unique place to talk about the things that make your brand special. LINE shares some of that, but it's really much more effective at driving real-life and virtual foot traffic, especially for brands who need a national/local component to their advertising, and who target a younger, less affluent demographic with their services.

From a brand marketing perspective, however, one might feel a bit wanting for the type of advertising products available. Though accounts seem to be effective in driving traffic to brands, the "creative" offerings are limited to things like character marketing in text messaging - while interesting in the context of the app, these really aren't vehicles that can help brands gain some strong, multi-channel "true" viral traction. Over time that will likely change, but for the time being LINE's paid advertising caters to brands that are noticeably niche. The company will have to find other ways to adapt this more broadly if it wants to succeed outside of its home markets.

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ABOUT THE AUTHOR

Jeff Lippold

Jeff is the Digital Strategy Director for Havas Worldwide Digital Tokyo. His professional experience spans integrated communication planning, social media, branding, web strategy/online business development, and e-marketing in Japan and North America. A bicultural Canadian who is fluent in English and Japanese, he is a frequent speaker and blogger on the challenges of cross cultural communications and advertising Japan, where he consults local and global clients alike on the finer nuances of the market.

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