WILMINGTON N.C. Students attending the University of North Carolina here this fall can expect a wave of mouthwatering messages for myriad restaurant deals. But when the local Atlanta Bread Co. franchisee steps into the advertising fray, he won't be using paper flyers or radio commercials. He's going high-tech with cell phone coupons.
Print messages placed throughout the campus will invite students to punch a text code into their cell phones and receive an electronic coupon that, unlike a text message, is graphical and branded. Students who want the offer then show their cell phone to a cashier at the restaurant.
A.B.C. franchisee Jon Bibb said the head of the university's computer science department is a regular at his store and encouraged him to try the new advertising vehicle. UNC-Wilmington also is a partner with the cell phone marketing company that's managing the pilot.
"He convinced me of how forward-thinking the concept is," Bibb said. "I think it's the wave of the future, and I wanted to be a part of it before everyone else was."
The technology behind cell phone couponing has been available for at least a couple of years, but retailers have been cautious to use it. While intimately familiar with print, radio and TV, many restaurateurs are like Bibb, who first wanted to understand how it worked "to be sure this wasn't just a gimmick."
Cyndi Richardson, vice president of company marketing for Arby's Restaurant Group in Atlanta, said the chain researched the technology for a few months before it was confident it met the needs of a specific target market of 18- to 24-year-olds.
"They're on their cell phones all the time — the same time they're on their computers and the same time they're watching TV," Richardson said. The company on July 27 launched a 250-store pilot in five major cities to test the new technology. "We know they don't use paper coupons, so this is another way to get that message out to that customer."
In 2006 a Subway franchisee in Buffalo, N.Y., launched a cell phone ad campaign in 12 locations that reportedly was so successful it led 300 stores in the Seattle and Tacoma, Wash., markets to follow with similar programs. Recent published reports claim more than 500 Subway stores use cell phone couponing, though calls to franchisees were not returned by press time.
Cell phone couponing services are free to recipients when they download the proper software. Advertisers, however, pay to reach those customers via click-through arrangements. Even when customers download coupons without using them, that information is valuable to Arby's, Richardson said, because it helps determine whether the offer was effective. Arby's expects "some variability [between] our redemption numbers and our click-through numbers," she said.
Bibb and Richardson wouldn't say how much their companies pay for the service, though both called the investment worthwhile. Bibb also called the effort easy, since all he has to do is tell the provider what message he wants to send and then train his cashiers to track redemption.
Both said it's too early to tell whether their programs have been successful. Arby's pilot is only in its third week, and though summer-school students at UNCW have received A.B.C.'s coupons, the bulk of its students don't return for class until the last week of August.
"Right now, we're starting small and seeing where this thing leads, but when the students come back for the fall, they'll be heavily marketed to," Bibb said. "We're not right on campus, we're close. So I still believe this is a market we want to tap into."
Richardson said Arby's wanted to get into cell phone couponing early on to assess its potential and understand the cost. She believes growth in this type of marketing will be exponential once consumers learn how to use it and retailers see its potential.
"We're looking at any opportunity to reach a customer, and if it's cost effective for us to do it, we'll consider it," she said. Getting into cell phone couponing on a smaller scale now will allow Arby's "to understand how much we want to invest in the future."
