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Ads heading to cell phones, mobile devices

April 12, 2003 12:46 IST

In the movie Minority Report, a beer ad recognizes Tom Cruise's character as he walks by and calls out: "Hey, John, you look like you could use a Guinness."

That kind of future -- where ads identify targets by scanning a person's retina -- may be fictional and far off, but advertisers are hoping timely, personalized marketing messages to cell phones, handheld computers, and other wireless devices will capture consumers' attention.

Automakers are inviting users to test drive their latest models on mobile Web pages.

TV networks such as Fox Broadcasting are encouraging viewers of "reality" talent show "American Idol" to vote for their favorite rising superstar via short text messages on their cell phones.

The emerging medium is compelling because it costs a fraction of the price of a traditional campaign of similar scope, and it offers a relatively easy way to track who sees an ad and who acts on it.

"From what we can tell, we were very pleased with the results," said Richard Loomis, vice president advertising and marketing for Comedy Central, which recently advertised its program "Chappelle's Show" by sending text messages to its target audience.

"We're always looking for new and different ways to connect with our audience. Both the young guys and the urban African American audience, we know, are early adopters of wireless technologies."

British research firm Ovum estimated in a report last year that global revenue from mobile advertising will reach $16 billion by 2006.

Treading carefully around privacy

Sybase Inc. unit AvantGo said its advertisers see average response rates five to 10 times higher than a typical direct marketing campaign. AvantGo provides a service that allows users to download news and information -- and ads -- onto their personal digital assistants.

For advertisers, the allure of mobile marketing lies in the potential to target audiences in the right place at the right time as more and more cell phones and devices include global positioning system (GPS) location pinpointing technology.

The promise is that McDonald's, for example, could offer a coupon for free fries as a consumer walks past one of its restaurants.

However, the average person is already bombarded with dozens of advertising come-ons each day and the high-tech possibilities of personalized ads whenever and wherever you are could be even more annoying than telemarketers, experts say.

"Most people (on cell phones)... do not seem to want to be reached unless it's someone they want to be reached by," said David Doft, advertising and marketing services analyst for CIBC World Markets. "Companies would have to figure out how to make it relevant to their customer base to accept promotions."

While location-based advertising is not yet possible in the United States due to the inability of third-party

firms to access location information, advertising firms say they must tread carefully.

"There are tremendous privacy issues," said Barry Peters, vice president at ad agency Carat Interactive. He and many others believe that mobile marketing only works if users opt to receive it.

Still, companies ranging from Coca-Cola to Adidas to car makers like DaimlerChrysler and Ford have promoted their brands via short text messages and the wireless Web.

"It's a compelling idea because there's the promise of one-to-one marketing unlike the PC (and the Internet) that's shared by multiple individuals," said Adam Zawel, director of wireless mobile enterprise and commerce at research firm the Yankee Group.

While mobile advertising has yet to grab momentum in the United States, initial results elsewhere show promise.

In Japan, snack and beverage makers, travel agents, and consumer credit companies are using banner ads and Web-based giveaway campaigns on mobile phones to attract consumers.

For example, candy wrappers might feature a phone number to which customers can send a short text message through their handsets to get a free ring tone or gift.

But as with unwanted e-mail ads, or "spam," mobile marketing could offend its intended targets.

In Europe, cell phone owners occasionally receive messages inviting them to dial sex lines or dating services. Travelers might receive unprompted welcome messages from the networks onto which they roam.

"Spam is the potential killer not only of wireless advertising but for wireless messaging and possibly for the wireless Internet experience," said Yankee's Zawel.

Another convenience

For now, many analysts and industry executives believe that the most effective way to use mobile marketing is to provide existing customers another convenience.

Carat Interactive, for example, helped Bank of America Corp. set up a system so its customers can access their accounts via mobile devices.

AvantGo earlier this week unveiled a new Web site with American Airlines that allows customers to access flight schedules, contact numbers, and frequent flyer details.

"One scenario that we're looking at is maybe retail shops using it (to measure) customer satisfaction," said Peters.

"Let's say you go into the Banana Republic. We can ring your cellular device and say, 'Please enter answers to these three questions about your satisfaction with the experience.'

"If it's done correctly, it's valuable."

(Additional reporting by Kiyoshi Takenaka in Tokyo and Lucas van Grinsven in Amsterdam)

Yukari Iwatani in Chicago
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