NEW YORK-As viewed through rose-colored glasses, selling over cellular phones presents an enticing opportunity for advertisers and carriers to extend their reach and revenues.
Clearly however, there are many potential interceptions in the way of the play for good consumer reception, said panelists participating in a mobile advertising forum at the recent “Fall Internet World 2000.”
To address the many complexities, the Internet Advertising Bureau, Rye, N.Y., recently spawned an offspring, the Wireless Advertising Association. Tim DePriest, vice president of AdForce EveryWhere, Cupertino, Calif., chairs the WAA and moderated the Internet World round-table discussion.
Citing a new Ovum Ltd. report, he said the number of wireless advertisements this year is projected to be 16 million worldwide, rising to 16 billion by the end of 2005.
“I’m a consumer, and I don’t want you intruding on me. What are consumers willing to put up with?” DePriest said.
“Location-based advertising gets a lot of play, but there is a no buyers, no sellers issue. Rick’s Burritos doesn’t advertise on the Internet, far less on wireless. How many feet (salespeople) do you need on the street to get Rick’s Burritos?”
For this reason, national chain stores with many locations likely will be the first targets for wireless advertising in this country, said Bruce Mello, senior vice president of 24/7 Media, New York.
“The Yellow Pages are the only ones with the manpower to go after the $50 local ads,” he said.
24/7 Media launched the first wireless ad server and network in Europe about a year ago, using push-pull, text links and click-on logos, Mello said. “We are about to launch the first U.S.-based test (in November) with a fairly large sample base … We are working in Asia with Spotcast, offering a free minute of airtime if you listen to a 15-second ad, and we are looking to bring this to the United States,” he said.
“There is virgin, uncluttered territory on this screen. But we don’t want to go down the path of the Internet, of clicks only. We need privacy and opt-in protection,” he said.
Lycos Anywhere, the voice portal developed by Lycos Inc., Waltham, Mass., is developing audio advertisements that are seven-to-nine seconds long. Lycos gives wireless and wireline listeners the option “to push or barge through them, or say `yes’ or click for more information,” said Jason M. Pavona, director of wireless strategy and personalization.
“We have hundreds of millions of people coming through our front door every day, and each wants something different. Some will pay to be left alone. For some, our applications are so important to their daily lives that they would be willing to listen.”
For advertisers to succeed, they must offer audio ads that are different from radio spots and text ads that are different from those posted on the Internet, said Allyson Fryhoff, vice president of sales and business development for Oracle Mobile, Redwood Shores, Calif.
“Voice is key to the overall experience, but it is only part of it. People want to get information in different ways, depending on what they are doing. Lists, for example, are easier to read than hear,” she said.
“This is not your father’s Internet. The challenge is how to cram things into screen-challenged phones, so advertising has to be approached differently.”
Because personal digital assistants have bigger screens, Lycos views their burgeoning numbers in the United States as an important gateway to wireless advertising. The merging of devices will abet this process. One leading indicator of this trend “is the new Ericsson model that combines a flip phone and a PDA,” Pavona said.
Besides differentiating itself from existing ways to advertise, wireless advertising also must compete for limited promotional dollars against other media outlets.
“I am very excited about wireless because it represents a way my clients can build relationships with their customers. But I also have skepticism because advertising is a fractured world, and there are a lot of ways to spend ad dollars,” said Tom Bair, director of convergence technologies for sfinteractive inc., San Francisco.
“There are specific ways wireless will work well, and a lot of ways wireless will work poorly … A number of business models are tied to direct compensation for listening to ads. These are not good eyeballs, although the number is large, so the rates advertisers are willing to pay are lower.”
If carefully targeted and crafted, wireless advertising offers telecommunications carriers the real possibility for new revenue streams that will help fund next-generation networks, said Brett Calder, director of marketing for pcsinnovations, Toronto, Ontario. It is up to the advertising industry to make the business case to carriers.
It also is incumbent upon the advertising industry to make the case to advertisers that wireless gives them a worthwhile return on investment, said Pavona of Lycos.
“The Internet brought advertisers a great way to measure response, and wireless will also,” he said.
If executed properly in conjunction with loyalty and rewards programs, wireless advertising also offers network operators a means to retain valued customers, said Mello of 24/7 Media.
“Carriers will play a very large role, and they are planning for it,” Mello said. “Right now, they are making all their money on minutes, and their biggest issue is churn. You saw what happened to their stock prices when carriers announced that churn rates are going up.”
