- The Washington Times - Monday, July 31, 2000

Jordan Weitz may not learn much about mar-keting as an English major, but as a college student he certainly knows about the buying patterns of one group his own.
About a year ago, Varsity-Books.com, an on-line college textbook seller looking for grass-roots marketing help, hired Mr. Weitz to court his peers. At first it was just about books, but now he is selling other students on everything from office supplies to magazines.
Mr. Weitz, a junior at the University of Michigan at Ann Arbor, is part of a segment that companies salivate to win over the college demographic.
VarsityBooks sees him as the perfect man to help them figure out what, when, how and why students buy. Mr. Weitz, who is interning this summer at the Washington headquarters of parent-company Varsity Group Inc., is one of thousands of students recruited by the marketing company to help harness the fleeting attention of their peers.
Mr. Weitz said he is learning some skills that could help him find work if the market for English majors runs dry in a few years.
"You're actually doing some-thing which you can use out there in the real world," he said.
Varsity Group is the latest entrant in a field of specialty-marketing firms that are using a combination of Internet technology and youthful energy to tap the lucrative college market. Other companies like Boston-based Student Advantage Inc. and Snyder Communications, the communications marketing firm owned by Daniel M. Snyder, the owner of the Washington Redskins also have staked a claim in this arena, where spending patterns are heavily influenced by peer groups and word of mouth.
College students spend more than $100 billion annually on goods and services, making them a huge target for marketers, said Jonathan Kaplan, Varsity Group vice president.
"Too many companies market down to college students and that's wrong," Mr. Kaplan said. "We treat college students like the adult consumers they are and that's incredibly important."
But it's not just the money they spend that makes college students valuable targets for marketers. College-age consumers, 18-to-24-year-olds, are trendsetters for other groups.
"They are taste-makers; in the case of music, film, and entertainment brands and services, they can help market a brand," said Patrick Keane, director of on-line marketing for Jupiter Communi-cations, an on-line research firm.
Marketers also say college students because of their age are forming brand loyalties that often last a lifetime.

New mission

VarsityBooks.com was founded in 1997 by Eric Kuhn, then a 27-year-old who was pursuing a legal career. He wanted to provide goods and services to college students efficiently and cheaply, so he started a Web site to do just that.
Until June, VarsityBooks.com was focused primarily on convincing students to get out of their university bookstores and go on line to buy textbooks. The Web site is one of the most frequently visited by college students, posting more than 1 million individual viewers in January.
Like most booksellers, on line or off line, VarsityBooks.com quickly discovered that profit margins are low, and company executives decided they needed to expand the business to generate cash flow.
Still, getting the attention of so many students so quickly is no small feat, and the company decided to begin selling its marketing prowess to others. In June VarsityBooks.com officially changed its name to Varsity Group Inc. to reflect its new focus on marketing.
Mr. Kaplan called his company's transition a "natural evolution" because the business of selling books involves a great deal of marketing.
Varsity Group's new mission is to bridge a gap for major companies that have never before specifically tried to reach the market or are unsure of how to successfully corner it.
Varsity Group's services include marketing strategy and planning, creative development and media planning, market research and program measurement and analysis.
Strategies include an on-campus student-to-student mar-keting effort, distribution of promotion materials and targeted e-mail campaigns.
Varsity Group targets the large college market, about 15 million students at 3,700 schools and universities around the country. Varsity has a large presence at Georgetown University, George Washington University and the University of Maryland.
"We've really learned over time and experience which campuses are strategically the best ones to be on to reach more students students who are wired and students who are really con-sumers and trendsetters in the marketplace," Mr. Kaplan said.

Big clients

Varsity Group has inked mar-keting agreements with several major companies and organizations including Staples.com, Time Inc., AT&T; Wireless Services Inc., REI, Sallie Mae and MVP.com, an on-line sports and outdoors store.
Sallie Mae this spring signed a two-year $2 million contract with Varsity that provides the student loan organization branding space on VarsityBooks.com, as well as access to what is likely Varsity's greatest asset: its army of approximately 2,700 college representatives, like Mr. Weitz, who are deployed on campuses throughout the country.
During the school year, Mr. Weitz spearheads a 15-member student marketing team, a sort of surgical strike force that promotes Varsity clients through mini-marketing campaigns. For instance, they distribute promotional materials on campus, give away novelty items and hold special events to attract students. Last spring the team showed the movie "Girl, Interrupted" on campus prior to its release, which Mr. Weitz said attracted many students.
Flexible hours, real experience and good wages $9 an hour at Michigan attracted him and his team. Then there are the perks.
For instance, Mr. Weitz was awarded free airline ticket vouchers because of good sales on his campus.
"There's definitely been an incentive to get out and work hard with perks like that," Mr. Weitz said.
Though in the full-time market-ing business for just a few months, Varsity already has racked up a few big clients.
Staples, for instance, worked on a limited level with Varsity last year, a move deemed so successful the company formed a full-time partnership to market to college students. While Staples hasn't focused in the past on targeting college students, it now is seeking to court a group that has so much spending potential, said Kelly Mahoney, chief marketing officer for Staples.com.
"We feel that they will be a great partner because they've got the knowledge of this demographic and they've also had some previous success with the college market," Ms. Mahoney said.
"Students and teachers represent a tremendous selling opportunity for Staples.com, especially during the busy back-to-school rush," Ms. Mahoney said. "VarsityBooks.com gives us a cost-efficient way to capture the seasonal spending. Their unique understanding of the college market means that more college students will be coming to Staples to purchase their school supplies."
Staples would not disclose how much it pays Varsity Group for its services.
Similarly, AT&T; Wireless Services Inc. signed on with Varsity Group in early July for help in reaching an estimated 250,000 students. AT&T; Wireless serves more than 12.5 million customers worldwide.
The company was attracted to Varsity Group because it offered both on-line and off-line targeting, said Jane Ann Regan, youth segment manager for AT&T; Wireless. Like other groups, the college generation is quickly integrating wireless services, perhaps even more so since college students often are rarely home, Mrs. Regan said.
She estimates that about one-fourth of college students use cellular phones.
AT&T; Wireless also would not disclose how much it is paying Varsity Group for its services.

Rough ride

While swift, VarsityBooks.com's transition into a full-time marketing firm has not gone smoothly.
Since its started as VarsityBooks.com, the company has burned through cash as it struggled to increase student awareness of its presence on the World Wide Web.
To raise money for its transition into full-scale marketing, Varsity in February conducted an initial public offering that brought in $36 million. While the IPO was successful in raising money, like many public on-line companies this year, Varsity's stock has tanked in recent months.
From February to early June, VarsityBooks stock has plummeted from about $10 a share in February to around $1 in late July. The company in June was forced to lay off 27 employees, 18 percent of its full-time work force, in an effort to reduce costs and steer the company toward profitability.
Robert Martin, an analyst for Friedman, Billings, Ramsey & Co., an investment bank in Northern Virginia, said it was critical for VarsityBooks to expand from being just a textbook retailer; a business that has a low profit margin over time.
"I would say that it is certainly where the business model needed to go for them to survive over the long term," Mr. Martin said.
Yet the stock dive has meant that Varsity's management has lost some credibility among investors. He said the company still needs to prove that its new marketing business will be successful before Wall Street endorses the move.
While investors remain cautious, some marketing analysts say Varsity's early and aggressive efforts at getting its footprint on campuses could pay off.
Student Monitor, a Ridgewood, N.J., college marketing research company, ranked the VarsityBooks.com Web site as the most visited and recognized in the college market.
Eric Weil, a managing partner for Student Monitor, said VarsityBooks.com is popular because most all students need books, are Web savvy and like to save money.
Mr. Weil said Varsity's greatest asset is likely its presence on the college field, as well as its passion and commitment.
"They seem to be very highly motivated and very driven," he said, adding that becoming complacent in business is problematic but Varsity is displaying a fresh outlook and commitment.

Stiff competition

Though Varsity has been aggressive in staking a claim in the world of college-age spending habits, it is not alone and the field is expected to grow.
Other companies like Student Advantage Inc. and Snyder Communications also have moved aggressively into college marketing.
Boston-based Student Advantage, which has provided news, information and services for the higher education community since 1992, now offers on-line and off-line marketing services.
Student Advantage, which has about 1.85 million student members, expanded in late 1998 from just a portal and student membership club to a marketing company.
The student membership program is fee-based, providing students with discounts at national partner retail and service companies like AT&T;, Amtrak, and Textbooks.com.
For instance, Student Advantage partnered last year with Textbooks.com to build a campus marketing initiative for the company, applying its marketing services and campus connections to 20 U.S. colleges and universities.
To promote Textbooks.com, Student Advantage student employees across the country conduct a marketing campaign.
According to Student Advantage, the marketing partnership has been successful, targeting more than 1 million students on 100 campuses nationwide in 1999-2000.
"They are clearly looking to us as the experts in the market and looking to us to drive their media plan and their marketing plan," said Todd Eichler, executive vice president of Student Advantage.

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