A new economic theory
For college students, being on the go is a way of life, whether the destination is a class, a library, an activity or just a place to hang out. Mobility has become such a given that many students don’t bother to have a traditional landline phone, instead depending on cell phones and other hand-held devices.
For universities, text-messaging alerts — from the cancellation of classes to a change of venue for an organization’s meeting — to devices that are always with students makes sense, but establishing and maintaining such a system would not be at the top of a budget-prioritization list. With this in mind, a fledgling company called Mobile Campus has devised a business model to solve the financial issue by letting advertisers provide beneficial promotions to students.
At 11 universities nationwide — the largest being the University of Texas at Austin and the University of Florida [at Gainesville], each with enrollments of more than 50,000 — the schools and sanctioned groups can update students about happenings on campus free of charge using the Mobile Campus platform.
While the service helps students connect to the university and each other, subscribers receive no more than two promotions from vendors per day. Key to the program is the fact that students must opt-in to be part of the program — at which time, they indicate the type of messages and promotions they want to receive — and that advertisers only can offer promotions that provide tangible financial benefit to the students, said George Tingo, Mobile Campus CEO.
“You’re not going to get spammed; you’re not going to get inundated,” he said. “You’re going to get a minimal number of messages, and those messages are going to be valuable to you.”
Meanwhile, the university and its sanctioned groups — from fraternities and sororities to student government to activity-oriented clubs — can send text messages to students at no cost.
“We don’t charge the universities for anything, and we allow them to use our platform,” Tingo said. “It would otherwise cost them money to build a platform and maintain it, and it would also cost them money to send these messages. Instead, we pay for the messages … in return for the marketing assistance they give us and the exclusivity provided in the contract.
“Not only is it free, we give [the universities] a percentage of our gross revenue from content sales and advertising sales.”
Based on early returns, the Mobile Campus model works quite nicely for advertisers, as well — something that doesn’t surprise Tingo, who noted that 94% of university students have cell phones, virtually all of which are capable of receiving text messages.
Rudy Napier, owner of Archer Auto Repair in Gainesville, Fla., said the response rate from the Mobile Campus promotions offering oil-changing specials has been very effective.
“It’s one of the few forms of advertisement that I’ve done that I’ve received an immediate response on,” he said. “The biggest problem is scheduling. We’ll send out a text message, and we’ll get a dozen phone calls within the first half hour or 45 minutes. Of course, you can’t do them all right away.”
To redeem a coupon, students typically just show their phone with the text message to the vendor at the place of business. The fact that the offer is on a device that is always with the student makes the electronic coupon more beneficial than one cut out of a newspaper or other print media, Napier said.
“It’s been one of the most prolific marketing I’ve done. Even after the initial rush, we’ll have students come in a month later,” he said. “With a newspaper, people may pull out a coupon if they need it, but the next day, it’s gone. I haven’t found that people save those kind of coupons for a period of time.”
Effective advertising in a college town is especially important because there’s at least a 25% turnover in a university’s student population each year, meaning the customer base for area vendors also is changing significantly.
The operators of the Villagio Apartments, which are about a 5-minute drive from Texas State University in San Marcos, Texas, have taken note of this reality. Although the Villagio depends largely on the student population to rent its 492 beds, university rules prohibit students from living off campus until their junior year.
With vendors banned from the university grounds, Mobile Campus promotions regarding events at the Villagio — featuring free food, non-alcoholic drinks and giveaways — are helping make students aware of the apartment complex prior to the time when they may choose to live off campus.
“Since we started with them, we’ve probably had six parties we’ve advertised with them, and we’ve had a great turnout for each,” said Robert Botello, Villagio’s leasing manager. “At this point in time, text messages are so popular with students — not only because they are faster, but because you can receive the information anywhere. It’s a very effective way to reach an audience that we wouldn’t have contact with before.”
Another recent Mobile Campus promotion offered 18,000 students from five universities discounts on hardware from Dell Computers, which were redeemable by visiting the Dell Web site. Dell received a 30% response rate, Tingo said.
“That message received a greater response in four hours than 30 days of advertising via a traditional advertising medium,” he said. “The power of text messaging — in its immediate receipt and immediate response — is something I think the advertisers are beginning to see.”
While there have been questions about whether universities should grant such exclusive rights to businesses, others have applauded the fact that Mobile Campus provides the schools with the text-messaging functionality and additional funds — one university reportedly used the money to purchase large-screen TVs for its student union.
In the future, Tingo believes the Mobile Campus model can benefit high-school campuses, as well as some corporate campuses and other communities. However, the company’s current focus is on the university market, hoping to build on the subscription rate — about 20% of students at the University of Texas and the University of Florida — achieved during the first year of the schools’ five-year deals.
Among other things, Mobile Campus is considering the integration of academic applications — such as the Blackboard e-learning software suite — on its Web site and mobile portal, Tingo said.
“Ultimately, the goal is to get them to wake up in the morning, get online or on their phone and open up Mobile Campus because everything you need — everything that’s essential to you at the university — you can get on the Mobile Campus Web site,” he said.
There is plenty of room to grow elsewhere, as well. Tingo notes that there are more than 17 million university students in the U.S. with an estimated discretionary income of $55 million per year. As long as advertisers are willing to make financially attractive promotions to reach the “Holy Grail demographic,” Tingo believes the model will work.
“It’s sustainable if value is provided, because value will never go out of vogue,” he said. “But it has to be about what’s good for the students; otherwise, they’ll opt out, and we don’t have a business.”
