Mobile Marketing Blog by InMovil Media

Advertisers recognized the current iPhone as a new marketing platform and some even developed campaigns targeted to iPhone users. Although it was a it is a good looking device, the phone’s slow Internet speed was a real shortcoming. However…

The new iPhone, which Apple CEO Steve Jobs is expected to unveil next week, will be a high-speed 3G model. With the new iPhone connecting to the web is faster and less frustrating, this will improve the user experience for example for downloading music and videos.

Another great prospect are rumors that the iPhone will come equipped with GPS, this makes it possible to pinpoint where the device is being used. The ability to target users in this manner is particularly appealing to marketers.

“Both from the marketing side, as the consumer side, there is the promise of location- based targeting,” said Tim Ruisbroek, director of InMovil Media, a mobile marketing firm. “Marketers get re ally excited about this.”

For years, the advertising business has been waiting for mobile marketing to catch on. Mobile Advertisers have to work with an array of service providers and device makers with different capabilities. Therefore making mobile campaigns for large audiences is diffucult job.

While the 3G iPhone won’t solve all these problems, however marketing experts believe it will help advertisers to deal with mobile phone shortcomings.

Moreover, Apple is putting pressure on other hand set companies to come up with “iPhone killers” that make the whole mobile phone experience faster, easier and more userfriendly.

Rivals are also making mobile-ad moves. For instance, Finnish phone giant Nokia purchased mobile-ad company Enpocket last year, while Google is expected to rock with their open-source software “Android”, for mobile phones in the fall.

All in all the conclusion is the mobile industry is moving fast powered by the urge for marketers to use the mobile channel ready to deliver highly targeted ads and create the best advertising medium so far.

Contact us to see how we can help your business to monetize this mobile advertising medium.

M:Metrics has published mobile marketing data which reports that young males are a rich target for mobile advertisers, as among mobile phone users 36 percent of 18 to 34-year-old men accessed mobile media in February. Men in this age group are also highly receptive to SMS advertising and marketing, with 9 percent response rate, versus a 4 percent market average.

In Western Europe, the male population is inclined to browse and download content on the mobile Web. A quarter of all male mobile phone users accessed mobile media, like for example mobile websites, compared to just under 19 percent of women. The audience is also quite young: 28 percent of 13 to 17-year-olds consume mobile media, only 12 percent of those 55 and older do.

“Reaching the 18 to 34-year-old age demographic is a real challenge to advertisers, as this group is spending less time consuming print and broadcast media,” observed Paul Goode, senior analyst. “According to TGI M:Metrics data, in Great Britain, young consumers are redirecting that attention to mobile, as 18 to 34 year olds comprise 56 percent of mobile media users, compared to only 29 percent of TV viewers.”

Interestingly, U.S. mobile users are more active consumers of mobile media and they use the mobile medium in a different way. As unlike Europeans they use SMS less frequently for news and information retrieval and are more likely to have data plans, which impacts mobile content consumption directly. Among Europeans, the UK has the highest percentage of mobile media users, at 26.8 percent, while Germany and France lag, at 18.4 percent and 18.5 percent, respectively.

“In Great Britain, mobile media is attracting a highly desirable audience that is 44 percent more likely to be defined as ‘cash rich, time poor’ than the market average,” said Goode. “In fact, data from TGI M:Metrics confirms that one third of all UK mobile media users agree they are tempted to buy products they’ve seen advertised.”

“Since the early days of mobile marketing an advertising, SMS advertising has been an effective way to reach the masses, but advertises are now actively looking at the mobile web to access new audiences,” said Goode. “According to TGI M:Metrics, adding mobile to a media plan increases the efficiency of reaching key target groups, a metric that will continue to improve with the growth of 3G and smartphone ownership.”

Contact us to see how we can help you to reach your target group via SMS or the mobile web.

I came across this article by Kenneth Hein made for Brandweek

It gives a good overview of mobile marketing, what can be used in reality and especially the so called “fantasies”, which appear with some irony not to be fantasies.

Those who doubt that mobile marketing hasn’t made headway might want to go amp themselves.

Among the brands that ponied up millions for a piece of the Super Bowl this year was PepsiCo beverage Amp Energy. While its 15-second TV spots didn’t venture far from the proven realms of Big Game locker-room humor—one featured an overweight truck driver starting a stalled-out car via jumper cables hooked up to his nipples—a quieter, related effort was reaching much further out. How far? Well, to people who might not even have had the game on at all. As part of its NFL deal, Amp Energy sponsored Sprint’s exclusive Super Bowl mobile channel, which allowed it to run ads via cell phone. A photo of the Amp can materialized on cell phone screens along with music, swirling green flames and the tagline “Go Amp Yourself.” (Hopefully, none of those cell phone users elected to do it with jumper cables.)

When a Super Bowl ad effort stretches into the cellular realm, it’s surely a sign that mobile marketing has arrived, right? After all, even though the third-screen spot was a timid boil-down of the in-your-face TV version, the very idea of adapting a commercial for mobile distribution would have seemed like an alien concept only a few years ago.

Today it is a reality, sort of. Around this time 12 months ago, experts were busy touting mobile marketing as the Next Big Thing. It wasn’t. And not a whole lot is different. Mega brands like Pepsi and Burger King are still toe-dipping in the mobile pool, testing various forms of advertising and promos even as the bulk of their spending dollars go elsewhere.

As mobile expert John Hadl puts it: “It’s hard to get a real read on the value of mobile when you’re only spending $25,000 to $50,000 on it.”

But things are beginning to change. Mobile marketing is “headed in the right direction,” said John Vail, director of the interactive marketing group at Pepsi-Cola North America, Purchase, N.Y. “It’s just taking a lot longer than people thought.” Mobile analytics firms such as U.K.-based Bango are helping companies measure mobile Web site traffic, what devices recipients used and the countries they’re in. In February, 58 million mobile subscribers reported that they’d already been exposed to mobile advertising, per San Francisco-based Nielsen Mobile (a unit of Nielsen Co., which also owns Brandweek). While that’s only 23% of today’s total mobile subscribers, that number will spike as marketers’ mobile experiments continue to grow. And Hadl, who serves as managing partner of Beverly Hills-based BrandInHand, overseer of Procter & Gamble’s mobile efforts, added that a threshold is approaching: “Once there’s direct proof of ROI,” he said, “the spend will shift faster than the industry can handle.”

That might happen as soon as two years from now. Forrester Research forecasts that mobile-marketing spending in the U.S. will surge from the $270 million it stands at now to $405 million in 2009. Then it all goes exponential, doubling every year through 2012, at which point the Cambridge, Mass.-based research firm predicts mobile marketing will be worth $2.8 billion.

Marketers view the mobile marketing explosion as “inevitable,” said Bill Jones, president of Atlanta-based mobile Internet platform provider Air2Web, which counts Starbucks and UPS as clients. Some are “really trying to accelerate” the channel because “properly used it is the most effective mechanism to interact with customers and prospects.”

All of which begs the question: How can marketers profitably use mobile devices to deliver their brand messages right now?

What follows are some of the answers. Like many emergent ideas in the tech realm, mobile marketing’s birth has been attended by as much fantasy as reality, and marketers are learning the painstaking (and, at times, just painful) differences between the two. For instance, studies repeatedly show that many consumers don’t like to get ads on their phones. (A mere 10% of mobile data users deem ads received via PDAs to be acceptable, according to Nielsen Mobile.) At the same time, a third of the same respondents said they’d be OK with seeing ads, so long as the spots offset their mobile bills—say, via free minutes. “That,” said Nielsen Mobile corporate marketing vp Paul Okimoto, “is where we’re starting to see an uptick.”

No doubt, we’ll start to see many more of those. For now, here’s the story on the mobile-marketing phenom today—both fantasy and reality.


REALITY
Customers dig mobile games.
Videogames were once synonymous with geekdom, but one glance at who’s using a Wii these days (including AARP members and the physically disabled, at last check) shows how dated that stereotype is. This love affair has carried over to mobile devices. In fact, some watchers are now predicting that the global revenue from mobile games will eventually surpass that of traditional console and handheld versions. According to U.K.-based consultancy Understanding & Solutions, mobile gaming is expected to hit $6 billion by 2011.

Some brands are already prepared to embrace this passion by offering free downloadable games for mobile devices that keep their brand front and center. The latest is BK City, debuting April 21, an elaborate game with three worlds (five games in each) ranging from a castle to a BK drive-thru. It will be available across all carriers except for Verizon. POP, online ads and mobile ads, of course, will support the effort. BK City is the latest creation of Mobliss, Seattle, whose prior efforts include Nickelodeon’s Rugrats Food Fight and Brady Bunch Kung Fu.

“A lot of what mobile content advertisers throw out there is cheesy,” said Tia Lang, director of media and interactive for the Miami-based chain. But, “as players progress, our game gets more difficult. It’s fun, funny and relevant to our target.”


FANTASY
People will never use their phones to buy stuff.
Think again. Remember when everyone was worried about using credit cards online? Even some tech-savvy shoppers wrung their hands over cyberthieves stealing their identities and draining their savings accounts. (Psst—it rarely happens.) Even as those same worries have swirled around mobile banking and on-the-go transactions, the truth is that a quarter of cell users with mobile Web access have already trusted their handheld devices to do their shopping, according Harris Interactive, Rochester, N.Y. Sixteen percent already use mobile banking services and one-in-five respondents hope their phone becomes a mobile wallet.

Smarter brands are beginning to respond. In January, Pizza Hut began allowing U.S. consumers to order from any of its 6,200 stores using the mobile Web or text messaging. The chain said it expects half its sales to come online or via mobile devices within the next five years. Papa John’s began offering the ability to text in orders last November.

“If privacy and security issues can be caged, mobile banking and mobile wallet services could launch the next leg up for mobile operators,” predicted Joseph Porus, vp of Harris Interactive’s technology practice. Rajeev Raman, CEO of mywaves, a mobile video destination whose clients include MBW, concurs. In the near future, he said, “purchasing movie tickets, fast food and music via mobile phones will be considered normal, everyday behavior.”


REALITY
Convenience works.
Skip the cleverisms; brands that give consumers information that makes their lives easier are the ones that’ll benefit. “That’s why we bought the phone in the first place,” Hadl said.

Starbucks, for example, makes it easy to find the nearest latte with a mobile-based store locator. When is that blue turtleneck you ordered going to show up? UPS will let you track the whereabouts of your package on your mobile device.

“Too many people pigeonhole mobile marketing as just being ringtones or wallpapers,” said Air2Web’s Jones, whose company created both applications. Brands that sponsor services that tell users things like where the is nearest baby-changing station or where is the store where I can buy what I need, will thrive, added Hadl of BrandinHand. “Soon,” he said, “mobile devices won’t simply be a push medium.”


FANTASY
Texting (aka SMS) isn’t effective.
Like hell it isn’t. While many are looking at mobile video, the mobile Web and other features, the simple, text-only brand campaign often still is what works the best. Why? Because even the oldest, most primitive cell phones out there have the technology that lets people receive a text promo and respond to one. Plus, the practice of text messaging has already been widely adopted.

In December, 1-800-Free411 attached ads sent to users who opted in to receive text horoscopes, diet tips and other information from a company called Limbo. While the free-information service usually gets about 40,000 to 50,000 new callers daily, that volume shot up to nearly 80,000 a day after the mobile ads ran. Overall, Limbo received a 7.1% response rate for text ads it ran for its clients in the fourth quarter.

“The forgotten technology of SMS will be a much bigger factor in digital spends than anyone is predicting,” said Jonathan Linner, CEO of Limbo, Burlingame, Calif., who’s amused that so many marketers are buzzing about putting a movie or banner ad on a cell phone. Those people, he said, “Don’t’ get it yet. You’ll get 10 times better performance from SMS.”


REALITY
The iPhone’s changed everything.
One of the biggest hang-ups (pun intended) for mobile marketers is the lack of “high” in the tech. We’re talking about antideluvian cell phones that everybody was carrying around prior to last summer, when the Apple iPhone hit stores. In January, CEO Steve Jobs had promised the iPhone would “reinvent” telecommunications. Some disagreed. Some still do. But mobile-marketing advocates generally aren’t among them. The average iPhone user over the age of 18 is five times more likely to explore the mobile Web and 11 times more likely to use mobile video or TV, per Nielsen Mobile. An iPhone-toting American also is 70% more likely to use SMS.

“Look no further than the iPhone for proof that improving the device and user interface can radically increase media consumption,” said John Najarian, svp-media and business development at the Comcast Entertainment Group, who oversees E!’s mobile page.

Better still, the iPhone’s popularity has meant lower-price imitators—triggering a new generation of “smart phones” that experts like Chetan Sharma, co-author of the just-released book Mobile Advertising, believe will make up as many as 20% of the domestic market in two years. (More powerful data pipelines as well as all-you-can-eat data plans will help, too.) Thanks to the iPhone, Sharma said, Americans finally think the cell phone “is more than just something you talk with.”


FANTASY
It’s getting easier to run mobile marketing programs.
Dream on. It still takes about two months to get a major carrier like AT&T or Verizon to approve a text program. And that, according to Gene Keenan, vp-mobile services at Isobar, San Francisco, and vice chairman of the Mobile Marketing Assn., Denver, is “ridiculous.”

“You can by a URL and have a Web site up in two hours,” Keenan said. “It’s still way too hard for brands and agencies to do mobile.” Even worse: “Until it’s easier for big brands to participate, you won’t see the big money.”

Keenan and experts like him have likened carriers to walled gardens: nice to be part of, but good luck getting in. They exert authoritarian control over their on-deck content (that’s the proprietary stuff available only to subscribers) and move with Soviet-style bureaucratic slowness in approving marketing programs.

For instance, WAP sites and banner ads have to be customized by handset and by carrier. “It introduces a lot of complexity,” Sharma said. “You can’t press a button and have a program launch nationwide. You have to negotiate everything and get your content approved.”

But stay tuned; fantasy might turn to reality by this time next year. “You can get over the wall,” Hadl said. “You’ll get hot and sweaty doing it, but you can get over. AOL already proved that this [walled approach] is a model for failure.”


REALITY
The mobile ecosystem is evolving rapidly.
Quick as the pace of technology is, sometimes it never seems quick enough. But mobile advocates hamstrung by tools that haven’t kept pace with their marketing dreams may soon be doing a high-tech jig. In November, Google announced Android, a new Linux-based operating system for mobile. Microsoft just inked a deal with Nokia that’ll bring its Silverlight platform to mobile. And this quarter, Yahoo! will launch what it calls onePlace, a mobile bookmarking tool that will allow better control of information. These developments come on the heels of AOL’s ‘07 purchase of Third Screen Media, a company that serves banner ads to mobile Web sites. Nokia bought the mobile agency Enpocket last year, too.

All of it, said Sharma, means that “there’s a cautious optimism” out there. “Optimism, because of the uniqueness and reach mobile presents. Caution because of the enormous fragmentation in the industry.”


FANTASY
There is one killer application.
Just like Gilda Radner and Dan Aykroyd debated whether New Shimmer was a floor wax or a dessert topping (it’s both!) on Saturday Night Live, each marketer seems to have his own miracle claim for mobile marketing. And so far, nobody’s quite nailed it.

Take GPS-enabled initiatives, which some see as the potential holy grail of mobile marketing. CBS Mobile announced a test earlier in the year that’ll pinpoint ads to customers based on where they happen to be standing, and Burger King’s Lang has been lovingly nurturing the idea of “serving customers an ad at lunchtime, asking them if they’re hungry.” The problem? “Those kinds of things are fantasy.”

Hardly the only one. “My fantasy is offering Pepsi Smash [music programming] as video-on-demand optimized for the third screen for millions to view,” Vail said. P&G, General Mills and others are currently in test with Cellfire, a company whose technology allows customers to store e-coupons on their cell phones.

There’s the dream of direct-to-consumer mobile video, alive in the mind of BMW Mini as it kicked off a program with mywaves in January. Still others are excited about mobile search; more than 46 million used their phones to search for information in the third quarter of last year, per Nielsen Mobile.

Alex Muller will tell you that GPS-driven mobile marketing won’t be a fantasy for much longer (then again, he’s CEO of GPShopper, which enables mobile-using customers to track down the best deals on stuff they want to buy.) “There will be a point,” he said, “where flipping through a paper circular won’t make sense.”


REALITY
There needs to be standards.
Mobile marketing is still a lot like the Wild West: a landscape of many players of various reputes, each a competitor peddling his wares and promises. “We need to develop more standards to reduce the friction out there,” said Jordan Berman, executive director of media innovation at AT&T Mobility, New York. “There needs to be more uniformity about how programs get off the ground. I’m on the MMA board of directors and we all agree it is a confusing marketplace out there.”

Then again, people said much the same thing about the Web itself when it was new. The growing pains, Berman said, are natural: “Online is like a toddler; mobile marketing is still in the womb.”

 Contact us to see how we can make these Fantasies and Realities make work for your company.

JupiterResearch says that it has found that introducing portable media players (PMP’s) with internet browsing capabilities are likely to stimulate significant growth in the amount of people accessing the mobile web and will create additional opportunity for mobile advertisers, who are expected to spend $2.2 billion on mobile messaging, display ads, and search via mobile technology by the year 2012.

Adoption of internet browsing on mobile phones is expected to climb from 16 percent at the end of 2007 to 19 percent at the end of 2008.

Their new study was completed in cooperation with mobile advertising service provider AdMob.

According to the report, the majority of page views and advertising impressions on mobile phones and portable media players are on a small screen with a mini-browser. Impressions and click-through rates (CTR) per device, however, are higher for mobile devices with full browsers.

“Mobility is adding a time and space dimension to media and advertising that has the potential to drive up CPM’s significantly. We are finding ads with location tags are selling at five to tenfold premiums over basic ads,” said Julie Ask, Vice President at JupiterResearch and lead author of the report. “The ability to tag users with location, demographics, and behavioral data complemented by devices that support rich media to avoid having their role in the advertising value chain made obsolete must continued to push forward.”

In order to be truly successful, mobile carriers must continue to enable access with affordable portable media players, mobile devices and innovative business models while protecting their stake in the value chain by adding information layers to user profiles.

“New mobile devices such as portable media players available on the market with dramatically improved user interfaces and capable of fully rendering HTML web sites are driving consumer demand for Internet access on mobile devices,” said David Schatsky, President of JupiterResearch. “Carriers should continue to enable consumers by rolling out more devices that look like portable media players at affordable prices – perhaps even as a second device – and continue to break down economic barriers of pricing and application restrictions to consumer adoption.”

 Contact Us to see how we can help your company to access the mobile internet.

Many advertisers are in wait-and-see mode on mobile advertising. “At the moment, the level of transparency is not enough to drive significant budgets into this medium,” acknowledges Henry Stevens, director of media and entertainment at the GSM Association, a trade group that represents wireless service providers.

Even as ads on mobile phones become more common, advertisers are holding off on a full-blown embrace of the tiny screen as a marketing tool.

There’s no denying mobile phone users are seeing more ads. A Mar. 4 study by Nielsen found that 58 million U.S. wireless subscribers had viewed an ad on their mobile phones in the past month. The problem is that mobile advertisers don’t know what users are doing, if anything, when they see the ads. Until advertisers find out, they may hold off on committing more precious marketing dollars to the mobile medium. “Advertisers that are used to full accountability are left in the dark,” says Farhad Divecha, director at London-based ad agency AccuraCast.

The hesitance is understandable. In the online marketing world, determining how well a campaign is performing is easy. Web sites embed tracking software known as “cookies” on your personal computer. Those cookies monitor your browsing activity and pass the information to advertisers and the ad-placement networks that distribute their ads across the Web.

A Consistent Yardstick

The mobile industry has refused to facilitate this tried-and-true approach. Most wireless service providers block cookies before they can ever get to cell phones, arguing that to allow them would open a hole in their networks for computer viruses.

Complicating matters, what little data the wireless service providers do pass back to mobile advertisers varies widely in terms of what they measure. Mobile-advertising networks, in turn, crunch the disparate data in different ways to gauge the audience response to mobile ads.

One mobile ad network might report the number of phones that received an ad, while another might report how many users actually viewed the ad. The distinction is subtle, but important for mobile advertisers. Without a consistent yardstick, it’s hard to compare the results of a campaign.

Click here to see our mobile statistics tools how we can help you to have a consistent yardstick.

Wait and See

Even Google (Nasdaq: GOOG), which is determined to extend its dominance in Web advertising to cell phones, has no reliable analytical tools customers can use to gauge the success of mobile marketing campaigns. “The mobile ad space is nascent, and we are currently working to figure out the best ad formats for our advertisers and users,” Google spokesperson Daniel Rubin wrote in an e-mail.

As a result of these obstacles, there are doubts whether the mobile advertising market will fulfill robust predictions, such as a Gartner (NYSE: IT) forecast for US$11 billion in global ad revenue by 2011, up from less than $1 billion last year.

Measures of Success

In a bid to rectify the situation, the association announced in February that five of its most prominent members — Vodafone (NYSE: VOD) , Telefonica O2 Europe, T-Mobile International, FT/Orange Group and 3 — have formed a working group to define common metrics for mobile advertising. By year-end, these companies hope to develop a set of standard measures and then launch a trial in Britain. Using input from mobile ad agencies and wireless carriers worldwide, the group will attempt to define everything from what constitutes a click to how to measure different kinds of user behavior. “The experimentation stage is almost over and, in order to scale, operators need to work together (to fix this problem),” Stevens says.

Not surprisingly, we see the urgency in delivering more reliable mobile data to their clients. “We want to enable mobile advertisers to understand the added value of mobile ads more deeply,” says Bas Vervoort, vice president of InMovil Media. “We want to let our clients see where a propsect goes, which phones they use and when. To make sure our clients truly engage with their audience.”

Click here to see how we can help your company to reach your audience with mobile advertising.

Marketers hail the mobile phone as advertising’s promised land

Illustration by Claudio Munoz

ADVERTISING on mobile phones is a tiny business. Last year spending on mobile ads was $871m worldwide according to Informa Telecoms & Media, a research firm, compared with $24 billion spent on internet advertising and $450 billion spent on all advertising. But marketing wizards are beginning to talk about it with the sort of hyperbole they normally reserve for products they are paid to sell. It is destined, some say, to supplant not only internet advertising, the latest fad, but also television, radio, print and billboards, the four traditional pillars of the business.

At the moment, most mobile advertising takes the form of text messages. But telecoms firms are also beginning to deliver ads to handsets alongside video clips, web pages, and music and game downloads, through mobiles that are nifty enough to permit such things. Informa forecasts that annual expenditure will reach $11.4 billion by 2011. Other analysts predict the market will be as big as $20 billion by then.

The 2.5 billion mobile phones around the world can potentially reach a much bigger audience than the planet’s billion or so personal computers. The number of mobile phones in use is also growing much faster than the number of computers, especially in poorer countries. Better yet, most people carry their mobile with them everywhere—something that cannot be said of television or computers.

Yet the biggest selling point of mobile ads is what marketing types call “relevance”. Advertisers believe that about half of all traditional advertising does not reach the right audience. Less effort (and money) is wasted with online advertising: half of it is sold on a “pay-per-click” basis, which means advertisers pay only when consumers click on an ad. But mobile advertising through text messages is the most focused: if marketers use mobile firms’ profiles of their customers cleverly enough, they can tailor their advertisements to match each subscriber’s habits.

In September Blyk, a new mobile operator, launched a service in Britain that aims to do just that. It offers subscribers 217 free text messages and 43 free minutes of voice calls per month as long as they agree to receive six advertisements by text message every day. To sign up for the service, customers must fill out a questionnaire about their hobbies and habits. So advertisers can target their messages very precisely. “Britain is the largest, but also the trickiest European ad market, so if it works here it will work everywhere,” says Pekka Ala-Pietila, chief executive and one of the founders of Blyk.

Last year America’s Virgin Mobile tried something similar with its “Sugar Mama” programme, which offers subscribers the choice between receiving an ad via text message or viewing a 45-second advertisement when browsing the internet in exchange for one free minute of talk time. Those who spend five minutes filling out a questionnaire online get five more minutes. Sugar Mama is proving popular: at the end of August Ultramercial, the company that manages the scheme, reported that Virgin Mobile had given away more than 10m free minutes.

Vodafone, a big mobile operator based in Britain, sees mobile advertising as a potentially lucrative source of additional income. For the time being, most of the ads on its network are still text messages, although it has begun displaying ads on Vodafone live!, its mobile internet homepage, through which subscribers access the internet and download videos and music. Vodafone is also running several pilots, says Richard Saggers, the head of its mobile advertising unit, in which subscribers receive free content in exchange for viewing ads. Earlier this year, subscribers in Britain were given the option of downloading footage from “Big Brother”, a reality-TV show, in exchange for viewing a promotional video clip. The firm has also offered free video games punctuated with ads to customers in Greece, and free text messages to Czech students who agree to accept ads in the same format.

Most mobile advertising strategies now rely on text messages, since few customers have taken to more elaborate services that allow them to download music, games and videos and to surf the web. Only 12% of subscribers in America and western Europe used their mobiles to access the internet at the end of 2006. Most people think mobile screens are too small for watching TV programmes or playing games, although newer models, such as Apple’s iPhone, boast bigger and brighter screens.

That is not the only problem. While consumers are used to ads on television and radio, they consider their mobiles a more personal device. A flood of advertising might offend its audience, and thus undermine its own value. Tolerance of advertising also differs from one market to another. In the Middle East, for example, unsolicited text messages are quite common, and do not prompt many complaints. But subscribers might not prove so open-minded in Europe or America.

Another hitch, says Nicky Walton-Flynn of Informa, is that operators have lots of databases with information about their clients’ habits that would be of great interest to advertisers. But privacy laws may prevent them from sharing it. Moreover, advertisers, operators and middlemen have not agreed a common format for this information, nor worked out how to share the revenue it might yield.

Some think these obstacles will confine mobile advertising to a niche for years to come. But others see a whole new world of possibilities, as more people use their phones to access the internet and consumers grow used to the intrusion. Mobile phones, some of which are now equipped with satellite-positioning technology, could be used to alert people to the charms of stores or restaurants they are walking or driving past.

Tying ads to online searches from mobile phones is another potential goldmine. A subscriber typing in “pizza” for instance, could receive ads for nearby pizza parlours along with his generic search results. Such a customer, mobile operators hope, is likely to be more grateful than annoyed by the intrusion. What could be more relevant than that?

Source: The Economist, Oct 4th 2007