Advertisers, like everyone else, want the biggest bang for their buck.
They want to reach as many people as possible without a lot of expense, and they want to get those people to see and understand their ad. Advertisers want to own the eyeballs of whoever might be around.
For this reason, TV is a fantastic medium for advertisers. It’s colorful, it’s loud and people sit in front of it for hours on end. Other mediums also can be used well, such as magazines, newspapers and billboards. In each instance, advertisers use the medium to show people something, and with enough impact that they’ll remember it.
Along these lines, the Internet should be another gold mine for advertisers looking to entice eyeballs. Web surfers have nothing better to do than check out the newest SUV for sale, right? But to date Internet advertising hasn’t quite lived up to the expectations of advertisers or Internet companies, a major factor leading to the dot-com economy tailspin.
Yet a new advertising medium is launching, one that could rival TV in its coverage and attention-grabbing powers. You guessed it-wireless. But the question haunting those in the industry is: Will this new mobile medium live fast and die young like the wired Internet or will it become the next Super Bowl of advertising?
Betting on wireless
A variety of smaller companies, and some major ones, are betting on the side of wireless. SkyGo Inc., WindWire, Riot Entertainment, DoubleClick Inc. and others are studying ways to lure advertisers to the new medium with the promise of measurable successes, personal communications and inventive technologies.
For instance, wireless entertainment provider Riot Entertainment scored the rights for wireless interactive games for New Line Cinema’s “The Lord of the Rings” movie trilogy. Riot will develop interactive games for movie fans and gaming communities, as well as a portfolio of inter-related wireless entertainment features, throughout the movies’ three-year cycle. The company is developing a variety of products for the movies, from simple, short message service applications to third-generation multiplayer experiences. The contract is a major example of the potential for wireless advertising campaigns.
While Riot is an illustration of future possibilities, other wireless companies have been relying on less-complex approaches for years.
“In June of 2000, we launched our first advertisement,” said Mike Aufricht, the general manager of AvantGo Inc.’s mobile marketing and commerce division.
AvantGo, which makes most of its money licensing its mobile software solutions, also operates one of the largest mobile Internet services in the United States. The company counts more than 3 million registered users on its wireless Web service, which offers a variety of standard content channels over mobile phones and personal digital assistants. The portal’s home page offers advertisers a small banner space at the top for forms and graphics.
“It’s a new and exciting medium to be in and the demographics are very good,” Aufricht said. Many advertisers are looking to nab the eyeballs of the young and technologically savvy, he said, and AvantGo’s mobile Internet service offers them a clean shot.
“They (advertisers) are interested in the fact that it’s a very uncluttered environment,” Aufricht said, explaining that a wireless Web screen is much less crowded than a typical wired Internet screen.
The big-name advertisers that have taken advantage of AvantGo’s advertising service are as diverse as they are well known. Bank of America, Nortel Networks, The History Channel, Toyota, Handspring and all kinds of other companies have doled out the cash to have their name at the top of the company’s wireless home page. Aufricht said most of the ads are simple banner headlines promoting a particular product or company, while others are more inventive. CompUSA, the nation’s largest PDA seller, offered AvantGo users a 10-percent-off digital coupon for PDA accessories. The ad was much cheaper to run than a nationwide print coupon campaign, Aufricht said, and ended in a 5-percent redemption rate-an extremely high percent for a coupon ad campaign.
“We’ve been getting a lot of interest,” Aufricht said.
While the company’s click-through rates-the measure of how many users actually click on an advertisement for more information-have been much higher than those typical of the wired Web, AvantGo still faces some hurdles in gaining advertisers, Aufricht said.
Education and standards
“How can you advertise on a phone” is the most common question the company must answer, he said. “It really remains an educational process.”
To entice advertisers’ eyeballs and wallets, AvantGo must sometimes show them the larger screen of a PDA, dispelling the belief that wireless advertising is possible only on a mobile phone’s tiny screen. Most AvantGo users view the service on a PDA, Aufricht said, and the real estate on a PDA screen is much easier to sell.
AvantGo’s advertising troubles and successes can be compared with the beginnings of advertising on the wired Internet. And, as in the wired Web, a standards organization has sprung up to help control the growth of wireless advertising, making sure that advertisers and wireless companies are operating on the same page.
“This year, in the United States at least, is a year of trials and learning,” said Don Albert, vice chairman of the Wireless Advertising Association. “We’re putting in place a foundation for this industry to grow.”
Since it was formed in May 2000, the association has been working to create a set of guidelines for wireless advertising, covering everything from how to charge for the letters in an SMS message to opt-in user privacy. The group has even hired a congressional lobbying firm to push its privacy policy in Washington.
Albert said the WAA is hoping to learn from the initial difficulties of the wired Internet, which was stymied by a fractured set of advertising specifications.
“Every Web site that was emerging created its own shape and sizing, which created a lot of chaos,” he said. “A lot of sites had to redesign themselves” when ad standards were introduced after 1996.
Along these lines, the WAA has set some detailed specifics on selling ads for WAP, SMS messages and PDAs. But this isn’t the only challenge the group faces, Albert said. Perhaps the most important aspect of wireless advertising is determining how effective it is.
The effectiveness of electronic advertising traditionally has been decided by click-through rates, and according to a variety of findings, wireless advertising sports an extremely high rate of clicks. A study from SkyGo found that 64 percent of ads sent to mobile-phone users were opened, and 15 percent of those advertisements led participants to take some kind of action or plan to take action, such as buying an item, calling about it or visiting a Web site. Advertisers on the wired Internet can expect only a fraction of these numbers.
However, Albert said, the findings are only preliminary and don’t present the full picture of wireless advertising.
“There’s some debate and not a lot of fact,” he said.
And, Albert cautioned, perhaps click-through rates shouldn’t be the final determinant on whether an ad is effective.
Television, for instance, has no click-through rate. Advertisers must trust that the ads people see on TV eventually will persuade them to buy a particular brand. Advertisers refer to this as branding-getting people to know and recognize their product. And this, Albert said, needs to be given careful study in the wireless environment.
“There’s terrific potential that we need to understand,” he said.
If branding becomes an accepted practice in wireless advertising, then perhaps the industry won’t suffer the fate of the wired Internet, which
met with waning interest as advertisers began to feel cheated by miniscule click-through rates.
So will wireless ads ev
entually give advertisers the bang they’re looking for? The answer is still unclear, but that won’t stop today’s companies from positioning themselves to take advantage of whatever may come along.
“We’ve only begun to push the envelope,” Albert said.
