Prepare Now for Wireless Takeoff

Wireless technology opens a new world of possibilities, such as digital advertising, remote access to enterprisewide applications and anywhere, anytime sales automation. But few companies actually use this wireless technology for advertising. Once more companies realize the advantages of having a wireless strategy, wireless advertising will develop as a core component of the marketing mix.

It is important to clarify how unlikely it is that any company will generate significant business volume via wireless advertising in the next two years in the United States. There just are not enough people receiving data wirelessly who also have opted in to ads.

But wireless data services and wireless Web access are growing and soon will become integrated into most companies’ Web strategies. Just as people now focus on the Internet as yet another channel, people will simply assume that there are wireless extensions to a company’s intranet and other Web sites. And it is there that wireless advertising will begin to produce measurable business results.

One reason wireless data services are likely to take off quickly, once clear standards and customers emerge, is that the infrastructure for the most part is ready. Unlike the Web, which started with clear standards such as HTML and then waited for development tools and other infrastructure items to follow, the wireless world already has several development tools, such as Java2ME, Mobilesoft and ad servers, ready for standards.

So the infrastructure will remain ahead of the market until clearer standards emerge and end-users begin using devices. But once those end-users start arriving, the infrastructure will be ready to scale quickly.

Another reversal between how the Web grew and how wireless data are growing is the difference between corporate investments in internal vs. external projects. Growth of the Internet and public Web sites led to the realization that intranets and extranets also could help companies produce large return on investment. For wireless, far more internal corporate uses are being developed than public uses.

Most Fortune 500 companies now have vice presidents of mobility. This is driven by the need to improve the connectivity and productivity of an increasing mobile workforce. This is a good example of wireless being simply an extension of existing Web sites rather than the creation of new ones.

Japan leads in end-user acceptance and use of wireless data devices. The United States is second and Europe third. (Europe is second in terms of wireless phones but not wireless data devices.) One big change expected over the next few years is from circuit-switched devices to packet-switched devices.

Current-generation cellular and PCS technology uses a whole circuit whenever a phone is connected to a cell tower. For this reason, the phone connects only to make a call and then disconnects when it is done. The user pays for the time he is connected.

Under a packet-switched scenario, currently in use only on Japan’s DoCoMo network, the phone is always connected to the network and constantly receives packets. However, unless the packets are addressed to that particular phone, it ignores them. Whenever there is a need to transmit, the phone simply adds packets to the data stream, which are then received by the cell tower.

With the growth of packet-switched wireless networks, per-minute pricing could go away or drop substantially, which would be more conducive to completing tasks such as e-mail, instant messaging and even gaming. As wireless penetration increases, so do wireless advertising opportunities.

What should companies do to get on top of the emerging wireless trends? Depending on a company’s target market segment, here are some key points:

• Wireless technology is an excellent way to reach executives and mobile professionals such as consultants and auditors. For any other group, the purpose of wireless advertising at this point is testing, not actually generating an acceptable volume of sales. However, for the highly connected segment, wireless advertising may drive significant results.

• For other targets, now is a good time to get involved in tests to learn more about the medium and to gauge public reaction.

• For all companies, determine whether a mobile component is needed in the marketing strategy. If so, delve into the devices to learn what is out there and how it works.

• Evan Grossman is senior vice president and director of operations at HookMedia, Boston. Reach him at [email protected]

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