With the wireless Internet, billboards no longer have to be stationary. Mobile advertising presents extensive opportunities to reach consumers anywhere and everywhere. According to Durlacher's Mobile Commerce Report, "mobile advertising will be the number one m-commerce application (23%) by 2003. The mobile device provides unrivalled 1-to-l marketing capabilities, which the direct marketing industry will exploit moving forward."
For all of its benefits, however, mobile advertising is a double-edge sword. Although the service may offset the price of m-commerce services, as it does with the Internet today, the last thing consumers will want is a company spokesperson living in their wireless phones.
"(Mobile) advertising must not be annoying," said Risto Laaksonen, Add2Phone president. "It must be useful and helpful for the receiver, like daily information about lunch offers."
Furthermore, the consumer must opt in to receive the ads. Paul Palmieri, Advertising.com vice president & general manager of wireless services, said that providers and vendors alike will not allow ads to be sent to customers without their consent. The lone exceptions would be if a subscriber visits a WAP site with a posted ad or agrees to receive ads to subsidize the cost of value-added services.
Privacy is a continual mantra for consumers; no one wants to be spammed or have too much individual information disclosed. Add2Phone believes that consumers should control who can send them ads, the time of day they can receive them and the number of ads per day. Ultimately, the company feels that mobile marketing must respect the end user and provide real value to be successful. Because vendors operate behind the scenes, the wireless provider will always be the ads' source in the mind of the subscriber.
Palmieri does not believe consumers will pay to receive mobile promotions.
"It has to be a situation where everybody wins," he said.
Pairnieri also thinks the service will build customer loyalty and reduce churn. Once a subscriber benefits from the advertisement, that will be "one more touch point where the consumer has created some sort of connection with the carrier," he said.
Advertising is a dirty word; the term done may turn off information-overwhelmed consumers. If a provider wants o send promotions to its subscribers' handsets, the first thing to do is come up with an appealing name. Add2Phone calls it mobile marketing. The company's mart Mobile Advertisement Server allows providers to send direct or sponsored promotions to their subscribers. Via SMS and WAP, providers can have push or pull ads with rich media such as ring tones and bitmap images.
One option is to compensate consumers for opting in to the promotions. Advertising.com's AdBroadcast service currently supports more than 150,000 digital phone and pager users; the subscribers have agreed to receive the ads and in turn are paid between 5[cent] and 50[cent] per ad. Advertising.com also offers an adtracking system that "allows a carrier to understand all of the advertising that is going through their pipe," said Palmieri. The software allows providers to track the ad revenues of their portals' content providers and determine their own share of those revenues.
Mobile advertising is poised to be a key service in m-commerce development.
"Mobile advertising as a part of the overall value chain of the wireless Internet is critical," said Palmieri.
With timely and location-based promotions, fixed retailers will be able to drive mobile customers their way and subsequently push the growth of location-based commerce. The trick for success with mobile ads will be for the industry to balance privacy concerns while offering user- or location-specific promotions that will extend real value for consumers.
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