Called to action

James Eberhard's new venture has a charitable ring to it

Jeff Smith, Rocky Mountain News

Published February 13, 2006 at midnight

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James Eberhard became rich overnight selling his Denver ringtone business 9 Squared for nearly $40 million 18 months ago. And the college dropout was only 26 years old at the time.

Eberhard, a Broomfield native, worked for the buyer, Monstermob of England, for almost a year, traveling for business to Africa, Eastern Europe and Asia. Then he quit and kicked back on a "three-month sabbatical," visiting Hawaii, Thailand, Hong Kong, Tokyo, Australia and New Zealand.

Now Eberhard, 27, is at it again, this time as co-founder of Mobile Accord, a Denver wireless marketing and fundraising business.

Mobile Accord is on the cutting edge - at least in the U.S. - of cell phones as marketing and transactional devices. Eberhard is especially interested in the "social component."

"You can make donations from the cell phone," Eberhard said. "Text in a five-digit code and keyword. The donation shows up on your cell-phone bill. It makes it easy to give money."

A nonprofit also could inform people by cell-phone text message about volunteer work or send video clips illustrating its latest project. Or a political group could organize people through a text-message tree.

"It's such a viral pass out," Eberhard said.

Eberhard formed the business last June with childhood friend Dan Weaver, who was working in the financial services industry in San Francisco.

"I was looking for the next venture," Eberhard said.

Sports marketing veteran Mike Ricci and former Jones Media Networks executive Tony Aiello also are part of the management team.

Mobile Accord already has lined up the U.S. Luge Association, a Denver footwear business, a cable TV network and a musicians' relief agency as clients. And the company is in discussions with a host of other prospects, including professional sports teams and a leading outdoor retailer.

For the U.S. Luge Association, Mobile Accord is providing the technology for a trivia contest during the Winter Olympics in Turin, Italy. A "call to action" is on a billboard in Times Square in Manhattan. By dialing in a five-digit code and text messaging a keyword, cell-phone users will be able to vie for prizes such as jackets signed by luge team members.

Mobile Accord helps develop the wireless content, deliver it to intended audiences, enable transactions and establish a billing system. It prefers to work with all major wireless carriers and maintains a secure Web site so customers can manage and track the effectiveness of their campaigns.

Laura Marriott, executive director of the Mobile Marketing Association, an industry association based in Boulder, said there's a growing number of companies that offer similar services, but Mobile Accord is one of only a few to focus on the nonprofit sector.

For nonprofits, "it definitely represents a new medium," Marriott said, one she believes will prove to be more cost effective than direct mail, television, door-to-door and other means. So far such campaigns have mostly focused on disasters such as the Asian tsunami and Hurricane Katrina.

Mobile marketing is benefiting from the proliferation of cell phones.

The U.S. market now has around 200 million wireless subscribers, and more than 80 percent of those have text messaging capabilities. Some 7.3 billion text messages were sent in June 2005, up 154 percent from June 2004, according to CTIA, the wireless association. The trend especially has caught on with younger people, but it gradually is becoming mainstream.

It's difficult to get a handle on the exact size of the wireless marketing industry. But market research firm Frost & Sullivan predicted last year that the number of subscribers who participate in mobile marketing campaigns would grow from 9 million in 2003 to 36 million by 2007.

Dunkin' Donuts, for example, recently sent latte coupons wirelessly in the Boston area. Customers could get a free latte by showing up with the coupon on their cell-phone screen, where it was scanned by a store employee. The company reported a 21 percent increase in store traffic during the campaign.

So far, cell-phone users aren't being bombarded by spam, and the industry is trying to keep it that way through standards requiring customers to give their permission, or "opt in," before receiving marketing messages on their cell phones.

Ricci, Mobile Accord's vice president of marketing, said the company saw a massive opportunity in the nonprofit sphere, where organizations often struggle to get smaller donations.

But consumer acceptance isn't going to happen overnight.

"We're sitting at the early embrace stage in the U.S.," in comparison to parts of Europe and Asia, Ricci said.

Currently, carriers also are limiting the amount that can be donated to $10 per transaction and $100 per month. And they are insisting nonprofits provide something in return - such as a "wallpaper" for the contributor's cell phone or an exclusive ringtone.

Mobile Accord executives said the U.S. Luge Association is using the Olympic sweepstakes event to generate a data base for future fundraising.

Verizon is the association's official sponsor but has agreed to allow other wireless subscribers to participate in the event.

"The U.S. Luge Association was worried about Verizon, but we said we would promote the program as powered by Verizon and they (Verizon) ate it up," Ricci said. "It added value to the Verizon sponsorship."

Another client is the Sweet Relief Musicians Fund, a California nonprofit that provides assistance to musicians facing illness, disability or age-related problems. Attendees of the South by Southwest Music Festival in Austin, Texas, this year will get exclusive ringtones by musical artists in exchange for a donation to the musicians fund.

Eberhard said he also is excited about the potential to organize and lobby voters via cell phone. The company is the only mobile marketing firm to be invited to speak at George Washington University's prestigious Politics Online conference this year.

While Mobile Accord is focused on nonprofits, it also is eyeing commercial opportunities.

Eberhard said he saw people in the Philippines use text messaging to place orders at McDonald's.

Said co-founder Weaver, "The device creates the synergy between the online world and the bricks and mortar world."

Aiello, the company's vice president of business development, said Mobile Accord is working with QTN, a national gay television network. Those partying at a QTN-sponsored lounge at the recent Sundance Film Festival could get festival gossip on their phone by punching in a code and keyword.

Mobile Accord is working with The 400 Store in Denver on a program to send text-message alerts to customers about limited edition shoes.

Eberhard said he is financing Mobile Accord himself, to the tune of more than $1 million so far, with the goal of completing a venture capital round by the third quarter. He is excited about his latest endeavor after his ringing success with 9 Squared.

"We're taking the next step," he said.

Mobile Accord at a glance

• Founded: June 2005 as a mobile marketing and fundraising firm

• Corporate headquarters: 2401 15th St., Denver

• Co-founders: James Eberhard and Dan Weaver

• Employees: Eight

• Business: Helps nonprofits and companies raise money or market their products via cell phones. Subscribers must give permission to receive the marketing pitches - they often do so by dialing a five- digit code and text messaging a designated keyword.

• Clients include: U.S. Luge Association, Q Television Network (QTN), Sweet Relief Musicians Fund, The 400 Store

smithje@RockyMountainNews.com or 303-892-5155

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