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The firm has linked up with about 200 marketers, including entertainment and fast-food shops such as Virgin Megastores, Hollywood Video, Domino's Pizza and Quiznos Subs. For the right to send mobile coupons, the marketers pay Cellfire an upfront fee and additional subscription rates if the number of cellphone subscribers to their coupons increases. Cellfire has separate arrangements with major cellphone carriers such as Verizon Wireless to ensure its coupons are available through their services. The companies declined to discuss the terms of these arrangements.
Ms. [Dee Mc Laughlin], who says she has met with various cellphone marketing companies, sees Cellfire's subscription-based service as a safe first step into mobile marketing. Virgin Megastores has offered discounts on products such as DVDs through Cellfire-distributed coupons. The early results have been good, she says, with redemption rates for mobile coupons at seven stores in New York and California at 15%, far higher than the typical 5% return for paper coupons. Virgin is also using Cellfire to market in-store events such as a Halo 3 videogame competition.
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