The interview discussed this & mentioned it could be done with their software ...
Is That an Ad in Your Pocket?
Advertising on mobile devices could be e-marketing's next big thing
By Michael Pastore
Managing Editor, CyberAtlas
Eleven years ago, in the days before the Internet, Steve Stutman had an idea for a
start-up: a business that would deliver advertisements and coupons to pagers. But
back in the pre-Internet days of the one-way beeper, the devices were considered an
instrument of doctors and elevator repairmen, a demographic not nearly wide enough
to be deemed worthy of advertising dollars. So the idea waited for the technology to
catch up, and sure enough, it has.
Two-way pagers, PCS and Web-enabled cell phones, and PDAs are big business,
and they present even more opportunities for people looking to market goods and
services. US consumers spent $7.3 billion on digital devices in 1999, from digital cell
phones and PDAs to notebook PCs and MP3 players, according to a study by
Strategy Analytics. Seventy percent of the 32.8 million units shipped in 1999 were
digital cell phones, the study found. According to IGI Consulting, 830 million mobile
devices will access the Internet by 2005. In Europe, the popularity of cellular phones
is almost impossible for North Americans to grasp. In Italy, there are more cell
phones than land-line phones. The devices and users are certainly there, and so are
the marketing ideas.
The advertising possibilities presented by mobile devices have a lot in common with
other forms of Internet marketing. Delivering advertisements to digital devices allows
for better targeting than traditional advertising (print, radio, and television) and also
allows for more interaction and a two-way flow of data. Thanks to the differences
between wireless networks and the Internet, wireless marketers can even target better
than Web banners or e-mail ads.
Is the delivery of ads to someone's pager, cellular phone, or PDA something the
public is willing to accept? That has yet to be seen. Is it a market worth exploring if
you're trying to reach a busy, technology-savvy, and high-income demographic? Most
of those close to the business think so.
"I think there's a huge market if it's handled correctly," said Alan Reiter of Wireless
Internet & Mobile Computing. "I think pagers and cellular phones represent the best
direct marketing mechanism in the world because wireless networks know where and
who you are. It's both intriguing and scary."
Too scary, perhaps, for some. Consumers ever fearful of "Big Brother" may not like
the idea of the cell phone nestled safely in their pocket receiving an advertisement,
especially when they step off a plane in New York, and the advertisement is to see
their favorite band, which just happens to be playing in New York that night.
Targeted? Yes. Too personal for some, certainly.
Alerts and Special Offers: It's All About Opt-In
According to Reiter, targeted advertisements delivered to wireless devices make a lot
of sense. The best opportunities, he says, are in opt-in e-commerce deals. A world
where our visitor to New York receives a message alerting him his favorite neck ties
are on sale at the local department store is not far away, according to Reiter. But what
happens when the rival department stores learns where the visitor is, and promptly
sends off a message advertising its own sale? Where does it end?
Opt-in offers would allow the audience to set limits on dates, the number of offers,
and the companies that send them. In addition to notifying users of sales and events,
marketers could also sponsor content to delivered to wireless devices, much in the
same way they sponsor Web content. A brokerage firm could sponsor stock quotes
delivered to a PDA, for example, and let users open an account with a text link. Reiter
points out that once digital signatures gain widespread acceptance, mobile users could
open the account without ever signing a piece of paper. Then, the e-commerce
possibilities offered by wireless devices would truly be limitless.
Which brings us back to Steve Stutman. Now that the devices and their users have
caught up with his idea, Stutman is president of a start-up called Clickadeal. Users of
the service opt-in to receive various types of electronic coupons and related offers or
services. The company is in the process of developing a service that facilitates
transactional capabilities using a relational database.
You want targeting? How does a database with enough specificity to include 10,000
categories with 10,000 subcategories sound? That means a company advertising
coffee wouldn't just know what brand you buy, but what flavor, what size, and how
often you buy it, among other things.
According to Stutman, one of the great advantages that marketers using mobile
devices have over any other form of reaching a customer is immediacy. After all, isn't
that why these things were invented in the first place, so the repairman could be
summoned when the elevator wasn't working?
A simple text message can be written and sent in a timeframe that makes recording a
radio spot seem like the building of Rome. Stutman's company is working toward a
system where the control of the ad goes to the advertisers, and the delivery is handled
by a firm like Clickadeal. Advertisers would enter the creative through a gateway and
check off their targeting categories, and then send the ad. Best of all for marketers, a
system like this works similar to most Internet ad servers that marketers are already
familiar with.
"We're greatly increasing immediacy and control over distribution and content,"
Stutman said. "We think there is a lot of efficiency to this model."
Nothing Gets You Nothing: Targeting Isn't Cheap
Then there is the issue of cost. Given the targeting capabilities and the immediacy,
marketers could expect to pay more than the average banner ad rate for reaching the
wireless audience. With an ad serving system like the one Clickadeal is working
toward, advertisers would pay a nominal insertion fee and then be charged on a
system similar to the CPM method used with Web banners. Once transactional
capability is fully developed, advertisers could be charged on a system that takes into
account a portion of transactions. With the average full-banner CPM sitting around
$33, according to AdRelevance, Stutman says the price of mobile ads are worth it.
"I think we're significantly more valuable than most CPMs," Stutman said. "You're not
going to get some 7-year-old surfing his dad's bookmarks."
Stutman's opinion is echoed by David Rice, Director of Content Development at
AvantGo, which allows individuals on the go to access Web-based information from
their PDA. The demographics of PDA users allow AvantGo's content partners to sell
their ads for a higher price than regular Web ads. The PDA ads, which are smaller
versions of Web banners in most cases, also get a better response than traditional
Web banners.
"The sense of banner blindness is not as prevalent," Rice said. "Click rates are much
higher on devices."
Rice also said that once PDAs and other mobile devices become more prevalent, and
the demographics appear more mainstream, the prices for a basic banner ad will
probably mirror those on the Web.
AvantGo delivered the first PDA ad on content from Wired more than one year ago,
and Rice said the company has received no backlash from consumers to date.
AvantGo users always have the option of switching to another content channel offered
by the company that does not sell advertising if they find the ads intrusive.
"The desktop was very helpful in setting an example," Rice said. "People know the
content is free and these guys have to make money somehow."
The Privacy Issue Strikes Again
Just as it is with desktop Internet advertising, the collection of data that makes
targeting possible is bound to raise red flags with consumers concerned about their
privacy. While the Internet advertising industry has been struggling with the issue of
consumer privacy since its inception, it is a foreign subject to wireless companies who
have dealt mainly in voice data transfer until recently.
"What's really crucial for this, is for the wireless industry to have security and privacy
policies," Reiter said. "I suspect the wireless industry has not paid enough attention to
privacy because they haven't had to. On a voice call, you can count on the phone
company not tapping the call."
Reiter says there are few reasons to think the privacy issue will be solved more
smoothly among wireless companies than Web companies. On one hand, phone
companies in particular are large and slow-moving firms, but on the other hand, they
have a lot of lawyers and are used to dealing with regulations.
It's Reiter's opinion that the wireless marketing pace will be set by companies that are
both Web-savvy and consumer-savvy. Companies such as Yahoo! and Amazon.com.
In Europe, Virgin has already made progress in this area with a co-branded wireless
phone service that allows its customers to listen to and buy CDs over their wireless
phone, and more innovations in this area will likely come from abroad. According to
Marissa Gluck, an online advertising analyst for Jupiter Communications, opportunities
abound across the Atlantic for wireless marketing.
"I think it's probably going to take some time in the US," Gluck said. "The greatest
opportunity is in Europe. I think the market in the US is still a couple years away."
Content distribution is the key issue in the wireless industry at the moment, according
to Gluck, and once that has been resolved, advertising and marketing will be the next
step. As with all advertising, wireless ads will have to show some demonstrable
benefit to consumers in order to be accepted, and that's why Gluck sees wireless
marketing geared toward utility and distribution, not brand building.
Like Reiter, Gluck sees no reason to believe the privacy issues that haunt Internet
advertising will simply disappear for wireless companies. "I think it will be interesting
to see how it plays out on the Internet and what repercussions it will have for
wireless," she said. |
