NEW YORK When it comes to marketing, Internet-calling startup Ooma has learned from the mistakes of those who came before it. Companies like Vonage found themselves in dire financial straits from massive marketing expenditures to build their businesses.
Instead, Ooma, which sells a device for unlimited home calling over the Internet, is taking a low-budget approach in the hopes of gaining TiVo-like cachet among early-adopting tech enthusiasts.
The Palo Alto, Calif., company is not dipping much into its $27 million of venture capital for marketing. Rather than TV spots or a broad Web ad blitz, it is readying a series of a half-dozen viral videos with a touch of Hollywood pizzazz: they were conceived by actor and Punk'd host Ashton Kutcher, who holds the role of creative director at Ooma.
"We cannot do what our predecessors have done," said CEO Andrew Frame. "Marketing success should not be a function of your budget size."
Unlike other VOIP services, Ooma is not requiring a monthly fee, instead selling hardware that covers free domestic calling for $399. It will raise that price to $599 next year.
Frame said the company initially is squarely focused on the Engadget readers rather than the mainstream audience. It hopes to build buzz by seeding the viral films on video-sharing sites and tech blogs. The goal: "become the iPhone of land lines," according to Frame, by eliciting approval from technology early adopters, which it pegs at about 18 million.
Frame declined to disclose how much the company is spending on the marketing initiative, saying only it is "not very much."
In the first video, a child approaches a group of kids at a playground and asks to play. After he is told no, he walks off to a spot in the grass, where he sits cross-legged and conjures up images of sunflowers, clouds and a hot-air balloon. The other kids soon surround him, wanting to play. The screen then shows "Oooma" with the company's logo.
Future videos will build on this theme, Ooma executives said, playing on the notion that Ooma has a near magical quality to improve life.
The 8-year-old boy in the commercials also appears in an introductory video on the Ooma Web site. Frame said he would appear in more viral videos, also created by Kutcher.
In addition to the videos, Ooma is relying on other viral techniques in the hopes of spreading the word of the new product. In July, it gave away 50 Ooma boxes on influential blog TechCrunch, inviting users to write why they wanted one. The posting attracted 747 responses.
"For any technology product, you need to have it validated by the early adopters," Frame said.
Ooma has also developed a signature tone that will play briefly when Ooma users connect on phone calls. Barely perceptible, the tone is expected to elicit discussion and further spread the Ooma message, Frame said.
"It's not about media buys for us, necessarily," he said.