N5R ready to ride the wireless wave
Direct Marketing News
01/01/03

Digital marketing firm N5R, Toronto, is ready to ride a powerful youth-driven wireless wave that is about to sweep across North America, similar to the way it has already gripped other parts of the world. For N5R the preparation occurred last year with its acquiring Quartez, London, England, last July and Bat Cave Inc., Toronto, last November. Quartez is a text messaging company. Bat Cave is an experiential youth marketing firm. It’s the coupling of these specialties, along with the considerable online expertise of N5R, that promise to open new vistas for relationship marketing and measurable direct marketing.

"Imagine the potential for Bat Caveproduced offline events to work seamlessly with online components powered by N5R," says Bat Cave Founder and President Andrew Turner. "We can now offer clients real-time analysis and measurable return on investment that few if any companies can provide."

Bat Cave is best known for its knowledge of youth culture and its holistic approach to creating brand experiences from events such as the Pepsi Taste Tour, Coors Light Power Station, Doritos Loud Zone, Benson & Hedges @ Night program and The Mountain Dew All Star Skateboard Tour. It consists of five full-time employees and continues to operate as a separate company under its current name.

An expert in incentive and relationship marketing, N5R creates complete, customized online digital marketing strategies. In addition to developing turnkey online contests with real-time online tracking and full statistical analysis, it produces permission e-mail, viral and one-to-one marketing programs offering online and now wireless customer acquisition, conversion and retention strategies and tactics.

"The younger demographic, is of course, an early adopter of innovative technologies," notes N5R Founder and CEO Roman Bodnarchuk. "N5R and Bat Cave have produced amazing results for clients like Pepsi and Hershey in the past and now with this new relationship and our focus on emerging trends, the opportunities are limitless."

The N5R acquisition of Bat Cave further consummates a relationship that began two years ago when Holmes Creative Communications, the public relations firm for both companies, suggested they work together on some projects. They did just that on events that involved the promotion of Jolly Rancher, a chocolate bar made by Hershey, Coors Light beer, and Pepsi.

"When you get into the event business, it can take almost a year of planning," says Bodnarchuk. "It’s not like our business where we can create a marketing program in 30 days."

Bat Cave produces big events costing millions of dollars for about five major clients, he says. They are often staged in a couple of hundred cities.

The biggest difficulty in the event business is giving clients concrete results proving the success of the events, he says. Organizers usually send clients weekly reports with photos meant to show how well the events were attended. But they don’t amount to adequate yardsticks.

"We believe text messaging, which is really taking off right now with the youth market between 12 to 24 years of age, will change that. If we can get people to use their cell phones at these events, we can start tracking and measuring these activities."

Text messaging promises to take the event business to a new level, he says. It serves as a real measurement tool. At the end of an event, clients can have a database of a few hundred thousand people who have provided permission to send them text messages.

The objective of an event like Pepsi might hold may be to give out samples of a new Pepsi drink, he says. Buttons people can pin to their shirts could be distributed at the event with the wording ‘Text Pepsi to win.’ People can then enter on their cell phones the 10-digit phone number and the word ‘Pepsi.’ In doing so, they may automatically qualify for a sweepstake, are filed in a database, and may receive a coupon back for a sample.

"It’s like getting an e-mail address. So we are capturing their data and sending them back a coupon, a thank you, a free ticket to another event, or a free concert. Instead of just having a good feeling of giving away 300,000 coupons, Pepsi now has a database of 300,000 customers to drive to the nearest 7/11 store or Shopper’s Drug Mart with possibly a two-for-one offer on a new one litre size Pepsi bottle."

It allows clients after an event to nurture and build a relationship with prospects, and not just get a good feeling of holding an event, he says. When the event ends, it’s now no longer finished. It’s just the start of many relationships.

Text messaging can be demonstrated in about 10 seconds, he says. It’s perfect for outdoor events where field crews can show people how to do it.

Text messaging is dominating Europe and is on the cusp of exploding in North America, he says. Almost everyone in the 12 to 24 year old demographic has a cell phone now. And many of them are already using text messaging.

He’s noticed when going to movies that young people sitting near him are often barely watching the movie. They are text messaging friends inside and outside the theatre.

"It’s no longer some Forrester Research statistic. Kids are really doing this."

It’s similar to e-mail when it first started around 1995, he says. Not many people had e-mail addresses on their business cards then. Now they are on all business cards.

He maintains text messaging will happen faster than e-mail because it’s associated with a device people have with them all the time. When people leave home in the morning, they take their car keys, wallet and cell phone.

“When you’re out at night, you don’t have your wireless laptop hooked up to the Internet, but you have your cell phone. So the fact you can reach people in a mall, nightclub or restaurant, and reach them anywhere, anytime, becomes very convenient.”

Young people today are multimedia creatures who have created their own text messaging language to deal with the 160 character limitations on cell phone screens, he says. They have developed short-form descriptions for almost everything.

"There are high schools and universities now that are teaching this new language. E-mail at least was in English, but these kids have built their own text messaging code."

Kids prefer to be on instant messaging like MSN chat because it is live, he says. They can’t even wait 10 minutes for their friends to e-mail them back. The appeal of text messaging is it reaches people in realtime and they respond to it in seconds.

"As direct marketers, you’ve got to watch these trends and try to figure them out. Radio, TV, direct mail may not be hitting these people, if they are living on their phones. We all know how much teenagers love talking, and now you have a device they own themselves. They are no longer sharing their parent’s phone. The cell phone has become like a James Bond tool for marketers."

Quartez was purchased for its text messaging know-how, he says. It wasn’t acquired for its customers or revenue, but purely for its technology.

Bat Cave was almost the opposite situation, he says. It didn’t have any technology. It was bought for its brand name, client base, experience and case studies.

Staging an event first calls for organizing it, he says. That’s where Bat Cave excels. But it also requires getting people to attend it.

"At N5R, we know how to drive people to events and get them to refer their friends. We know how to work with databases, whether mail or e-mail, and text messaging. We know how to capture more data at events, and follow up and build relationships with people later. That’s how the two companies fit together."

Clients don’t have to deal with three different companies—an event company, a DM company and an Internet company, he says. The objective is to make it seamless, easy and integrated for clients.

Bat Cave realized about $2.5 million in revenues and earnings of about $450,000 last year, he says. For 2001, N5R achieved revenues of more than $2.1 million and a profit of slightly less than $200,000.