Cellfire Inc. is the latest player to get into the mobile-couponing game, partnering with retailers including T.G.I. Friday’s and Hollywood Video to deliver discount offers to wireless phones.
The startup last week launched a downloadable application that delivers coupons from national and local retailers within a specified area. The offering initially will be available only to subscribers of Cingular Wireless L.L.C.; Cellfire said it is in talks with other carriers looking to support the offering.
Eight retailers have signed on to the service, which Cellfire had been quietly testing since December in California. The application, which can be downloaded from Cellfire’s Web page or via a short code, delivers a menu of offers users can click on to receive coupons.
Each coupon has a five-digit code that can be presented at the point of sale, and retailers pay Cellfire for each redeemed coupon.
Marketing companies and retailers are increasingly looking to mobile coupons as a way to engage consumers—especially young consumers—on their handsets. A handful of other California developers are scrambling to gain a foothold in the mobile coupon arena, including NetInformer L.L.C., Juice Wireless L.L.C. and Gamut Industries L.L.C. BlueFire Digital, another California startup, recently released an offering that delivers coupons, music clips and video trailers to phones via Bluetooth.
Virgin Mobile U.K. is delivering offers of free food and pints of beer to subscribers at concerts and other outdoor events in Europe. NeoMedia Technologies Inc., a Florida-based company that has acquired several mobile marketing outfits in recent months, is offering mobile coupons to World Cup fans in Germany and has partnered with McDonald’s Portugal to deliver discount offers in restaurant kiosks.
Such efforts appear to be gaining acceptance. Cellfire and others report redemption rates between 15 percent and 25 percent, far outpacing those of traditional print coupons. “We are seeing remarkable growth in both the number of users and retailers who are excited about embracing” the service, said Cellfire Chief Executive Officer Brent Dusing.
Mobile advertising is expected to explode into a $10 billion industry worldwide by 2010, according to The Shosteck Group, but marketing firms and carriers face a difficult task: approaching potential consumers without appearing intrusive. Some Bluetooth-based marketing efforts have already been derided as “Bluespamming,” and misdirected messages could shackle wireless advertising in its infancy.
“We believe the next two years will be critical as other technology and market trends could prove to be barriers in the anticipated growth of this market,” said John Darnbrough, a senior associate at The Shosteck Group. “A damaging consumer backlash against intrusive and unsolicited mobile marketing could occur if overzealous marketers fail to respect consumers’ right to privacy and inundate them with unwanted and irrelevant mobile marketing messages.”
Operators will see only about one-fifth of mobile marketing revenues, the firm said, but stand to benefit from increased data revenues as uptake of wireless Web services increases. Carriers must team with handset manufacturers, content providers and advertising companies to offer compelling content supported by targeted, effective marketing campaigns.
“It is our view that … mobile advertising and mobile content are inextricably linked,” Darnbrough said. “The success of one will enable the success of the other.”
