Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=155652
Story Retrieval Date: 11/22/2014 9:30:44 PM CST
Q101 radio station
The recession hammered most industries, but for mobile marketing provider Vibes Media LLC in Chicago, it equaled growth. Vibes grew to $12 million in revenue last year.
“The mobile device is the most powerful marketing tool ever,” asserted the 33-year-old co-founder and CEO, Alex Campbell.
Companies are utilizing short message service, or SMS, text messaging more and more to market brands and to create more interaction with consumers. With the ability to personalize and directly target specific consumers, mobile marketing is set to become very popular in the future.
“One major factor was when the economy went south, a lot of companies took the time to analyze how they were spending money in the market,” Campbell said.
Vibes clients include national wireless leaders Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone Group Plc, and AT&T Inc., over 60 national sports teams, including the Chicago Blackhawks, Bulls and White Sox, and many radio stations and concert venues around the country.
“Marketing budgets overall have been drastically cut, but this is a great way for us to super serve our listeners and put a direct message into their cell phones,” said Jeannine Moose, promotion director for WKQX-FM in Chicago.
Also called Q101, the station has been a Vibes client since 2006 and regularly uses Vibes product to engage its listeners. Vibes created a platform rather than software for the disc jockeys and others to log into.
“Every month and year, we can see the number of messages come into our radio station grow,” said Moose. “We’re noticing those numbers growing because our jocks are really taking advantage of creating those relationships with the listeners. For them to get a text back from Electra who’s on the air right now is usually a cool thing.”
Vibes had its beginnings in 1998 when the name was just PhiCam—a combination of the co-founders' last names—and when pagers were still popular.
The company operates with 80 employees specializing in technology and marketing. Vibes plans to expand in revenue and people, having already hired seven new employees in January. Campbell says Vibes is able to operate on a large scale with so few employees because of technology.
Campbell and Jack Philbin, co-founder and president, were raised in New Canaan, Conn. and have known each other since kindergarten. Once the two went to college, the University of Pennsylvania and Boston College respectively, their entrepreneurial drive kicked in.
“We always knew we wanted to start a company, we just didn’t know what in,” Campbell said. “So it was kinda the opposite way that you normally start a company—with a great idea.”
According to Campbell, since text messaging was in its infancy, the two men spent most of their time going around the country trying to convince people that text messaging and mobile marketing would work. Campbell lamented that they have always been “painfully early” on many projects in the past.
“The idea was eventually people are going to access the Internet through their mobile device,” Campbell said. “That seemed very obvious to us.”
Campbell and Philbin raised approximately $100,000 in seed capital to start the business. They declined to raise money through a venture capital firm.
“We have a big philosophy: we’ll never do a program for free because we need to create value,” Campbell said. “For us it was a reinforcement of ‘customers are willing to pay for what we’re providing’ and therefore, we know we’re delivering value to them.”
In 1998, they created a mobile couponing program for Pizza Hut Inc. via pagers. Participants received a message containing a code that the cashier entered for the customer to receive free breadsticks. A few years later Vibes bought a Web domain and began Internet promotion of its business.
Vibes works with two types of clients: publishers and marketers. Publishers comprise radio stations, television stations and concert venues to which Vibes licenses its text software and platforms.
The programs run by the sports team or venue help to engage ticket holders by posting questions or inviting the audience to text the short code to see his or her message on the screen.
A short code is a specialized telephone number to execute the mobile programs and deliver SMS and multimedia messaging service, or MMS, text messages. Text-2-Screen, as they call it, prompts the thousands of spectators to look at the screen that happens to say which wireless carrier is promoting the program. The goal is for a spectator to remember the brand.
Campbell and his employees continue to communicate with clients after the software has been delivered.
“They’ve always been very helpful,” Moose said of Vibes. “[They are] definitely always looking for suggestions from us on how to make it easier and more user friendly for us to be able to utilize the platform and the best way possible to reach out to listeners.
“We mostly use it to have general conversations with our users. We have the ability to text them back with a personal message. On the platform, it almost looks like an instant message conversation that we’re having,” she said.
Q101 uses the program for contests as well. Monday through Friday the station holds a contest five times per day, choosing the 500th person to win tickets to a major show or event. Last week the station gave away tickets for a World Wrestling Entertainment, or WWE, event on Feb. 19. The majority of the giveaways are for concerts, but exceptions are made when there aren’t any concerts happening.
The radio station also has a concert text alert club that notifies members of when tickets go on sale for their favorite bands. Listeners can also text to the short code 99161 to have the last three songs the DJs played texted back to them.
“Nobody out there is doing exactly what we’re doing,” Campbell said. “I honestly wish we had more competitors. I think from an industry standpoint we’d be much further along if people were out there using mobile the right way and getting the industry further along.”
The second type of clients are marketers. Vibes assists them with overall marketing programs and teaches them how to effectively use mobile marketing. There are many factors that are taken into account such as the age of the consumers that buy a brand and what type of phone they may have.
Vibes mostly works with SMS text messages, but also works with mobile apps, short for applications, and WAP, wireless application protocol, more frequently referred to as mobile Web but not to be confused with the Internet.
Patrick Collins, CEO of 5th Finger Inc., in San Francisco, another mobile marketing agency, said, “The open rate of an email is .1 percent. If I send an SMS to someone, 90 percent of the time they’re going to open it.”
Collins and Campbell estimate the value of mobile marketing to be in the range of $500 million to $1 billion, although they say the number is widely debated within the industry. Forrester Research Inc. estimates that mobile marketing will become a $54 billion industry by 2014. Campbell says that "time, location and interaction" are key factors that make mobile marketing an attractive option for companies.
“I think location services are going to be huge,” Collins said. “The ability of my phone to know where I am: that’s going to be huge. And that’s real. That’s coming.”