Mobile advertising – is it finally a reality?

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According to the New York Times, Verizon Wireless will finally start providing mobile advertisements on specific content (e.g., news, weather, sports) it gives to consumer in 2007.  One can see why the carriers are doing this – current voice/data revenues are starting to flatten and they are in need for new services to drive ARPU.  And we all know the potential for mobile advertising is enormous – just ask the Google folks what advertising has done for them on the Internet.  Must say I’m the first to admit that I never thought ads on the Internet as a business model was going to fly. 

Yet the Internet and a mobile phone are different mediums.  There is something about the mobile phone that is certainly unique to us, and as such, it is as private to us as our credit cards in our wallets – we only give out our phone number when we have to.  To many, it is our last bastion of privacy.  As such, to think consumers will be ok with receiving advertisements on their mobile phone is a shortsighted assumption.

In its current form, mobile advertising for the sake of mobile advertising is a very risky play.  I continue to believe that many will never want to receive ads on their phone.  The value proposition for consumers, I believe, is different on the mobile device (as compared to a website search on Google).  For those that are willing to view ads on the phone, I believe the successful models must be based on 1) an exchange for a good, such as a free product or discounted service and 2) be as targeted as possible.  There is supporting evidence to this, with such services as free directory assistance.  There is a point in which some consumers are willing to view these ads in return for ‘something’.  This ‘something’ has to be as targeted as possible – it must be information that is viewed by a targeted population (e.g., a sporting ad targeted a rubgy community).  Generic ads to the mass market will not cut it on the mobile device..

 

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3 Comments

  1. Brittinie

    February 19, 2007 @ 12:51 am

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    I have to agree that mobile companies starting advertisments will have a huge effect on the advertising industry as well as the mobile network.

    This truly is an innovative idea that will take off soon and be taken to another extreme.The thing is I truly think it will be a scary and annoying thing to go through. Just imagine getting tons of advertisments through text message…and will this special feature cost more on the phone compnay?

  2. Steve Smith

    February 19, 2007 @ 9:02 am

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    Would agree that it is both a huge opportunity and a big risk for the telcos. The problem will be if the consumer starts getting charged for these advertisements (whether directly or not). Simply sending out mobile advertisements will not work, particularly text messages. The Do Not Call List should prevent unsolicitated messages from occurring.

  3. sal

    March 2, 2007 @ 7:12 pm

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    big risk for the carriers. not sure they should do it without some serious trials..