CHICAGO, April 8 (UPI) -- Advertising to mobile phone users may be a brand new marketing medium, but it already represents a significant threat to commercial television, industry experts told UPI's Wireless World.
Results of a survey released this week in London by the global advertising agency BBDO, a division of Omnicom, indicated that consumers today are more willing to forgo their televisions than their wireless phones. That means before the decade is over, advertising to mobile phone customers eventually may surpass TV as the most potent media for marketers.
"Over the past few years, mobile marketing has evolved from an innovative yet daring marketing vehicle to a proven and a successful method of reaching a targeted audience," said Erin Delaney, a spokeswoman for AvantGo, a free mobile Internet service that generates revenues through advertising. "Today, the delivery of marketing messages via (personal digital assistants)PDAs and smart phones results in recall rates twice that of TV advertising."
Research from International Data Corp., an IT industry consultancy, indicated so-called "non-voice wireless services" grew by 139 percent last year. These advertising-supported mobile phone calls generated nearly 5 percent of the revenues of the mobile phone industry last year.
As new technology comes online, such as 3G -- or third-generation wireless telephone networks -- this medium will become even more alluring for marketers.
"These networks have made capable the delivery of ad content ranging from simple text to streaming video," said Joan Cear, managing director of G.S. Schwartz & Co. Inc., a marketing consultancy in New York City.
Services such as AvantGo's iAnywhere have delivered ads over mobile devices for major brand names, including American Airlines, General Motors, Microsoft, Rolling Stone magazine and even the New York Times. The free Internet service -- supported by eight channels of ad content synchronized for PDAs and mobile phones -- allows these brands to "influence and interact with the hard-to-reach audience of educated, tech-savvy business professionals through customized, mobile Web site content," Delaney said.
Some advertising executives remain skeptical the ads can be persuasive when delivered in short-bursts over a mobile phone, given the ceaseless stream of ads that consumers have seen through other media on a daily basis.
"The average consumer is bombarded by 5,000 commercial messages per day," said Robert Smith, a marketing consultant located near Rockford, Ill., about an hour northwest of Chicago. "Mobile phone advertising will increase this number significantly. It's smart, but it could backfire."
Smith worries that if advertisers harass consumers with pop-up images on the small screens of their PDAs and mobile phones, they may become annoyed and "won't buy."
Delaney disagreed, saying AvantGo has higher click-through rates -- users going to an ad site -- and conversion rates -- users actually buying from an ad site -- than other Internet advertising.
"Conversion rates range from 15 to 20 percent and click-through rates average 5-10 times higher than typical Internet advertising," she said.
Mobile advertising technologies are expected to evolve in the coming years. Excel Switching Corp. in Hyannis, Mass., a provider of wireless network infrastructure, foresees personalized ring-back tones and location-based concierge advertisements as driving future revenues, a company spokeswoman said.
For example, she said, a clothing store could use the ring-back tones to notify consumers who have this feature on their phones or PDAs that there is a sale.
The ring-tone supplier Flycell.com last year ran a promotion using a mobile messaging service tied to the Olympics, said company spokesman Alberto Montesi. This can drive sales during a special event.
"Technology essential to increased mobile phone advertising includes -- but is not limited to -- instant messaging, IP media servers and signaling platforms," the Excel spokeswoman added.
A report from Deloitte & Touche's Technology, Media and Telecommunications Group calls these kinds of services "embedded advertising."
Some analysts think there are several reasons -- mostly cultural -- for the seemingly surprising trend of mobile phone advertising.
"Since wireless devices are almost an extension of our bodies, content delivered to a mobile is regarded as higher quality," said Dave Mock, an analyst for the research firm CurrentOfferings.com, and author of "Tapping Into Wireless" (McGraw-Hill). "A desktop PC is stagnant and impersonal, whereas our mobile is part of our life. This facet of mobile devices makes marketed content delivery much more promising."
The technology also can be used to track the habits of consumers surreptitiously, something that might attract the attention of consumer privacy and civil liberties activists if its popularity surges, as expected.
Experts said companies such as SmartTrust have developed technologies for wireless carriers to figure out which users own the most expensive mobile phones, which ones spend the most money on online content, where they live and similar private information. Other issues may have to be worked out as well.
"Wireless customers will need to come to terms with the concept and carriers have to determine who gets the message and who pays for it," Cear said.
--
Gene J. Koprowski is a 2004 Winner of a Lilly Endowment Award for his columns for United Press International. He covers telecommunications for UPI Science News. E-mail: [email protected]
