Cell phone makers tap teen-aged crowd

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By Josh Newman

(IDG) -- The flagship Kode store is tucked inconspicuously into a California shopping center just across from a Subway sandwich shop. But Kode's ultramod design is more avant-garde Soho than Sacramento Sunset Mall. Inside there's a circular "Pod" where three teen-agers are logging on to a purple iMac. Another group of kids is hanging out in blue-and-green translucent blow-up chairs. Just beyond them is a stage equipped with two turntables and a microphone. Kode holds weekly clinics for DJ-wannabes.

Is this any way to run a cell phone service? It is if you're startup wireless carrier Talking Drum and you're after the largely untried teen market.

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There are 31.5 million kids in America between the ages of 12 and 19 who spent $105 billion of their own money last year. According to a recent poll by Harris Interactive (HPOL), 30 percent of kids 15 to 17 have cell phones. European and Asian wireless carriers have targeted the youth market with some success, yet in America it's considered too risky. In fact, the past year witnessed one spectacular flameout, with New York-based Modo going down before it even went public with its service. That hasn't discouraged Talking Drum and several other independent wireless ventures from jumping into the market.

As for the big boys of wireless, they wanted nothing to do with what they viewed as child's play. Verizon Wireless' strategy is representative of the industry at large: "We don't market to teens," says spokeswoman Brenda Raney. "We market to parents as a life productivity tool." That's one way to not reach 16-year-olds.

Forget about life productivity tools. Talking Drum wants Kode to be the teen accessory of choice ö this year's answer to the beeper. It offers a hip cell phone with an embossed scarab on the flip cover, cheap calling plans (starting at $29.99), and clique-friendly features like Blast, which allows for five-way calling. There's also Mojo, a voice-recognition system featuring rapper Kool Mo Dee. "The idea is to tap deep into the teen lifestyle," says CEO Vinnie Longobardo, who ought to know what he's talking about after nearly 15 years at MTV.

The world of music isn't incidental to Talking Drum. "The idea for the company has its roots in digital music art festivals," according to Victor Friedberg, Talking Drum co-founder and minister of culture. A Julliard-trained pianist, Friedberg has worked with Laurie Anderson, David Byrne and Vladimir Horowitz. It was at music festivals that he first noticed teen-agers fiddling with such devices as scanners and CB radios.

"I saw kids using wireless in totally unexpected ways ö like to find the frequency of the local fast-food takeout window headsets to make phony orders," says Friedberg. "That's when I first understood that kids would lead the way through the convergence of communications and technology."

Friedberg and his music partner Rand Siegfied recognized that communications technology would become as important to teen culture as clothes and music, and they formed Talking Drum in Oakland, Calif., in 1999. It's the first wireless service to specifically target teen-agers, but it won't be alone for long.

Talking Drum launched its Kode service in Sacramento in November, targeting 30,000 of the city's 70,000 teens with the goal of attracting 2 percent of them as subscribers by the end of the year. They're in the early stages, and Longobardo won't release subscription information, but he says the company is on track so far.

Talking Drum is marketing Kode the way labels do their records. Kode makes heavy use of street teams, the groups that blanket a college or downtown with promotional posters, handbills and giveaways. "When kids first see the stickers, they think it's a band or a fashion company," says Kode's Summer Bradley. She's in charge of "sniping," or plastering stickers around teen hangouts at a pace of 500 per person per night.

Longobardo chose Sacramento as a launch pad because of the city's unique concentration of distinct market segments in a low-pressure media market. Predominantly middle class but with pockets of low-income urban residents as well as suburban and rural denizens, the city is an ideal backdrop to test how different teen-age social circles respond to the marketing.

The smaller venue also allows Talking Drum to test the limits of the marketing campaign. VP of Marketing John Lewis, who left behind a jet-setting ad job at Nike (his last shoot was the Lance Armstrong elephant commercial in Baghdad) says "safe" is not in Talking Drum's vocabulary.

The first Kode print campaign in Sacramento newspapers featured a retouched photo of a fireman dousing flames under a semi-tractor trailer that a suicidal man had recently driven into the side of the California State Capitol building. The Kode logo was drawn in on the side of the truck and the copy beneath read, "Kode delivers HOT mobile product to Sacramento." Many adults found the ad offensive, but kids seemed to get the joke. "If you're 16 and grew up in Sac, this explosion was the biggest news to come out of Sacramento ever," says Lewis.

If Kode fails in planned launches in Los Angeles and New York in the coming months, that fireball of a truck may take on an ironic twist. But initial response at the Sacramento store is promising. Back in the Pod, one dread-locked teen explains, "Mom can take away my computer. She can take away my car. But she can't take away my Kode phone. That's mine. It's my connection to people."

Music to a marketer's heart.

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