A new player in the $7.2 billion-a-year coupon business has emerged locally, offering a new way to advertise local businesses to cellular phone users.
Sorrento Valley-based Astroleap Inc. launched “eureka!mobile,” a wireless software application, this month.
The service makes it possible for cell phone owners to search for merchants and businesses just as they would in the phone book, but for far less than it costs to make a couple of calls to 411.
Participating merchants can sign up to include a wireless “coupon” to entice consumers when their business pops up during a search.
“What’s great is someone will only be looking at the mechanism when they’re looking for somewhere to go for something to buy,” said Dan Bailey, executive vice president of Astroleap, founded in 2004 to develop the technology.
So far, 600 Southern California businesses have signed up for eureka!mobile.
Currently, the service is accessible only to Cingular Wireless subscribers. Bailey said he’s talking to other cellular providers and hopes to take eureka!mobile national as soon as it’s proven itself regionally.
For consumers, the service costs $1.50 for the initial software download and then 10 cents for every search, with all profits going straight to Cingular.
Astroleap hopes to profit from selling the service to merchants. The cost to post a coupon starts at $250.
Risk Takers
“Our hopes are that it reaches a new group of people,” said Steve Goble, director of marketing communications for PostalAnnex+ Inc.
The San Diego franchise has 64 locations in the county, and offers $2 off ground shipments and $5 off air shipments for UPS and FedEx on eureka!mobile searches.
PostalAnnex+ is one of several franchises to sign up.
Individual store owners are not obligated to honor the coupons. But Goble said they have been briefed on the new service and it’s unlikely to cause problems in the franchise community.
“Certainly, a prudent PostalAnnex+ owner wouldn’t turn down the opportunity for new business,” Goble said.
Anthony Vitale owns Pazzo’s Pizza in Scripps Ranch and a number of other ventures in hospitality, property management and real estate. Vitale has posted a coupon for Pazzo’s Pizza but he said he wants to how well eureka!mobile fares before he spends more money on the service for his other businesses.
“I can’t imagine it not taking off,” Vitale said. “But I wouldn’t want to go all in with everything that I do without a performance marker.”
La Jolla real estate broker Seth Obyrne of Obyrne Real Estate Team doesn’t expect a slew of new business right away but hopes his coupon for $1,000 closing costs will help get his name out.
“Though I don’t necessarily see immediate business in it, I certainly see brand value in it,” Obyrne said.
In addition to paying for listings and posting coupons, businesses can pay to become eureka!mobile sponsors. The service will display names and logos for added exposure while searches are run. The cost is $500 for three months.
A New Way
Three out of four, or 76 percent, of U.S. consumers use coupons, according to the Promotion Marketing Association, a trade group based in New York.
The emergence of mobile coupons, first as text messages and now as a software application, comes on the heels of a fast-growing trend toward more tech-based advertising.
“We’ll have to wait and see how it works,” said Goble of PostalAnnex+. “On the other hand, we would like to continue to explore other forms of technology-based advertising.”
Published reports show that coupon redemption fell 6 percent in 2005 compared with 2004 and though they account for less than 1 percent of the billions of coupons distributed each year, use of electronics coupons was up by more than 50 percent last year.
Because they are code-based, no equipment is required to redeem mobile coupons. Consumers can use the coupons once or several times, depending on the contract signed with Astroleap.
“Practically speaking, anything condition or restriction you see on a paper coupon, this system does that, too,” said Hasam Saqallah, managing director for Astroleap, which employs 15 people.
