Ovum, a London-based research and consulting company, predicts that by 2002 more than $4 billion will be spent worldwide on wireless advertising. That number is projected to quadruple — to $16 billion — by 2005.
The promise of wireless advertising is to provide the right advertising message to the right person at the right time. But can the industry deliver on that promise and, in doing so, secure the long-term future of wireless advertising?
The fortunes of wireless advertising are tied to those of the wireless Internet. And advancements in personal device technology must continue. But as long as advertisers and content providers commit to meeting the needs of consumers and securing their long-term acceptance, there’s no limit to where wireless advertising can go.
Wireless advertising is attractive to content providers and advertisers for four simple reasons:
Mobile people buy. Studies show that 90 percent of all transactions occur when customers are away from their home or office. Wireless advertising offers companies the perfect way to reach those on-the-move customers. Imagine the benefits of reaching a customer while she is walking through a store instead of sitting in front of a PC. Studies suggest conversion rates for wireless advertising will eventually exceed those for all other forms of advertising. One study by Geoworks Corp., Alameda, CA, showed an 8.2 percent conversion rate on a text-based wireless ad — almost three times higher than the rate achieved by a similar direct marketing effort.
• New revenue streams. Wireless advertising opens a new messaging and creative channel for advertisers and a new revenue stream for content providers.
• Messages can be targeted by time and location. The key to continued customer acceptance of wireless advertising is delivering messages that each customer finds useful. A person in New York, for example, does not want to hear about a sales promotion in San Francisco. By adding location-based targeting to targeting capabilities already being leveraged, wireless advertisers can deliver a personalized, meaningful message to each potential customer.
• Wireless ads drive traffic and increase brand awareness. Wireless advertising not only enhances an advertiser’s ability to reach mobile consumers, it features a powerful new media form to deliver vital branding messages, appropriate ads and relevant promotions.
What types of creative wireless advertising will prove the most effective? Several types already are being piloted, and each delivers a unique benefit to both advertisers and content providers.
• Sponsorship. The most basic way to place a wireless ad, sponsorship allows a company’s logo or name to appear on the content page that a potential customer is reading. Fogdog Sports, for example, can sponsor a sports content page, thus providing the company with an excellent way to increase brand awareness.
• Re-direct. Re-directs work the same way with a wireless ad as they do on a Web page. A teaser appears on the screen, and when the customer opts to click on it, the teaser takes her to a new wireless destination site. Obviously, re-directs are a great way to drive traffic.
• Click-to-coupon. With click-to-coupons, advertisers send out an appropriate coupon offer to a customer’s portable device. When she opts to click on that offer, a coupon is sent directly to that customer’s message box, where it waits for the customer to retrieve it to redeem at a retailer’s location. Click-to-coupons are attractive to both content providers and consumers because they deliver real value without disrupting a potential customer’s browsing time.
• Click-to-dial. Speaking of value, click-to-dial is another effective way to reach customers without annoying them. Again, when a customer opts to click on an offer, the click-to-dial feature dials that customer’s phone to connect with an advertiser. Forgot Mother’s Day? No problem. A click-to-dial offer can connect a person to 1-800-Flowers immediately and conveniently. Can you think of a better way to find — and retain — loyal customers?
• Interstitial. Advertisers and content providers can now ensure that every second counts when a customer browses the Internet. While a customer waits for requested information to download onto his personal device, interstitials can fill the wait time with messages from advertisers. The messages disappear the instant the requested content arrives. Interstitials work great as a branding tool, because advertisers know their message will appear in front of an engaged audience. With interstitials, there’s no such thing as downtime.
And that’s not all. The arrival of new convergence technologies will introduce other valuable creative alternatives for content providers and advertisers. Click-to-audio and click-to-video options are merely waiting for the right technology to unleash them.
While wireless advertising’s enormous potential is undeniable, the extent of its future success will be dictated by three key factors. The first two factors, the wireless Internet and evolving technology, will take care of themselves. But responsibility for the third factor, ensuring long-term customer acceptance, lies primarily with the advertisers and content providers that stand to gain the most from wireless advertising.
While today’s device technology is capable of handling the first generation of wireless advertising creative options, advanced technologies will create even more opportunities. Larger or modular screens, greatly enhanced screen resolutions, increased network bandwidth and voice recognition will throw open the doors of possibility.
Those doors of possibility will remain open as long as advertisers and content providers remain sensitive to the best interests of consumers. Obtrusive entries into the busy lives of customers not only violates their privacy, it hurts business. Both advertisers and content providers must remain committed to providing their customers with messaging that is relevant, compelling, actionable and welcome. They must never waver from their adherence to the “opt-in” principle of customer interaction. Remember: Providing customers with information they have requested is a service; sending it unsolicited is a waste of everyone’s time.
The battle for customer buy-in to wireless advertising is an ongoing one. Added incentives such as reduced phone bills, free incoming calls, and coupons are just the beginning. Advertisers and content providers must continue to derive new and better ways to add value to a customer’s wireless advertising experience. Increasing perceived value on the part of mobile consumers is the best way to ensure that wireless advertising delivers on its remarkable promise.