‘Third screen' takes marketing mobile

By Jim Stafford

Published: October 24, 2006

The cell phone has morphed from a mobile voice communications device into a gadget from which users can send and receive text messages, e-mail, view photographs, surf the Internet and watch videos.

Call it the "third screen" behind the television and computer screens.

A pair of enterprising University of Oklahoma graduates are attempting to capture that "third screen" as an advertising medium.

Brian Teague and Daniel Wagstaff have created a Dallas-based company called cityphone, which attempts to connect cell phone users and Dallas-area restaurants and night clubs.

Wireless users can visit www.mycityphone.com and choose to receive discount offers online or sent via text messages to their mobile phones from more than 100 Dallas-area establishments. The cityphone founders launched their site in beta test in April and opened it for full use earlier this month.

"Basically, our system combines mobile marketing with reviews, articles and listings published on a Web site," Teague said. "Members can either instantly download a Mobile Offer to their cell phone or they can register in a specific Mobile Club. Registration in a Mobile Club then gives a merchant permission to send Mobile Offers at a later date."

On the surface, the concept looks like a promising venture, said James Wheeler, executive director of the Center for Entrepreneurial Studies at OU. For instance, a restaurant on a slow night might blast out a discounted dinner or drink offer to 1,000 or more registered users in a wireless text message and expect quick responses.

"It's the ultimate direct marketing, and you can do it over cell phone," Wheeler said. "It makes all the sense in the world to me."

Cityphone is not the only company riding the wave of technology-based marketing. Showmewifi.com was launched by Oklahoma City native Seven Williams earlier this year and has financial backing from Florida investors at Warner International Networks Inc.

"We have seen many cellular programs similar to this launched in the past," said Jeff Kagan, an Atlanta-based telecommunications analyst. "Some are successful, and some are not. It all depends on how well they market their service. How fair is the price? How accurate and how easy it is to use? What kind of competition there is in each city they cover? These are all important issues."

Showmewifi.com is attempting to take its mobile advertising concept to several major cities nationwide, including Oklahoma City, said Rich Kaiser of Yes International, the investor relations firm for Warner International.

Showmewifi.com lists four Oklahoma City restaurants and a tanning salon on its Web site. Visitors can watch a short video online or download them as a podcast into an iPod or a wireless telephone, Kaiser said. It's a concept that connects customers with retail establishments at a lower cost than traditional advertising, he said.

A surge in mobile marketing is anticipated across the United States in 2008, cityphone's Teague said. That puts marketers such as cityphone and showmewifi.com ahead of the curve.

"So far, our service has been well-received in Dallas," Teague said. "The restaurants and bars that participated in the BETA test showed a 20 percent redemption rate between the offers that were downloaded and the ones that were redeemed."

Cityphone generates revenue from banner advertising and the "mobile offers" embedded in the ads.

"When a user clicks on the Interactive banner ad, a Mobile Offer window pops up," Teague said. "The user can then send the mobile offer directly to their cell phone. Advertisers pay in advance for a block of 100 mobile offers."

Even as it develops the Dallas market, Teague and Wagstaff are working to expand their version of the mobile marketing concept elsewhere, including Oklahoma City. Target partners would be a company that already has an established base of advertisers and customers, Teague said.

"One other key aspect of our service is that the user controls the experience," he said. "You will never receive a spam message from cityphone since everything is ‘opt-in.' This is only the beginning."