Online Advertising - Wireless Advertising

WIRELESS ADVERTISING

Although advertising opportunities on wireless devices are limited by small screens, text-only capabilities, and the potential to annoy consumers, marketers have found ways to exploit this opportunity. According to a study published in the eMarketer Newsletter, wireless advertising was projected to grow slowly through 2002 due to technological hurdles. However, it was then expected take off in 2003 through 2005.

The top three markets for wireless advertising were Europe, Asia/Pacific, and North America. In Europe, for example, expenditures on wireless advertising were projected to grow from $2 million in 2000 to $443 million in 2002, accelerate to $1.5 billion in 2003 and then reach nearly $6 billion in 2005. Expenditures in Asia/Pacific were projected to reach $4.7 billion by 2005, and in North America expenditures were projected to increase from $363 million in 2002 to $4.6 billion in 2005.

Wireless advertising can take many forms. Brand building and awareness messages can accompany other content, such as news or stock quotes. Wireless devices can be used to notify users of sales or other timely offers. Discounts or coupons that users can redeem through their mobile device can be offered. In addition, traditional telemarketing pitches can be delivered to cell phones.

Other forms of wireless advertising include e-mail messages that allow mobile users to buy an item by clicking on an advertisement. Links also can be embedded in advertisements that enable users to click through to an e-tailer's Web site. Finally, direct response ads can be sent to wireless devices that allow users to call the marketer with one click.

Wireless ads can be part of a "push" strategy or a "pull" strategy. Ads that users download as part of other content rely on the user to "pull" them to their device. Other types of wireless ads can be sent to mobile devices at unexpected times as part of a "push" strategy.

Wireless advertising offers advertisers the possibility of delivering ads based on the user's location. While current technology only allows wireless operators to roughly estimate a user's location, that is expected to change. As part of a Federal Communications Commission (FCC) initiative, mobile operators will be required to be able to trace users to within 400 feet of their location. While the initiative was designed for emergency calls, it potentially could benefit marketers.

One big question affecting the viability of wireless advertising is how receptive consumers will be to the ads. Unsolicited wireless ads that are pushed at the user have the greatest potential for alienating consumers. Such annoyance can be alleviated to some extent by using opt-in models, whereby the consumer has to agree to accept commercial messages on his or her wireless device. Another problem affecting wireless advertising concerns how wireless time is billed. Most wireless users are billed by minutes of use, so that an ad sent to a wireless device would cost the consumer in terms of time used. To overcome this, wireless advertisers must be prepared to compensate users for every ad received.