RealTime IT News

Cell Phones Get Ready For Prime Time

Cell phone carriers such as Sprint Nextel , Vodafone and Verizon  are taking their first steps toward full-fledged mobile advertising. And with good reason.

According to market research firm ABI Research, advertisers are poised to spend $1.95 billion by 2011 to deliver ads to North American phones. Also according to ABI, those ads could yield better click-through rates than banner ads (between 2 percent and 3 percent, compared to 0.2 percent).

The temptation of green fields notwithstanding, Gartner analyst Ken Dulaney noted that carriers should be wary of creating consumer backlash. Compared to PC-based ads, said Dulaney, mobile phone users could be faced with 10 screens.

The founder of a consumer watchdog group also warned against ad fatigue.

"People are fed up with ad creep," said Gary Ruskin, founder of Commercial Alert. Integrating ads within cell phone menus will cause "a great consumer backlash -- it's right in their face," he told internetnews.com.

The point has not been lost on the carriers, which is why they are moving cautiously. A spokeswoman for Sprint agreed that "advertising must not be intrusive or disrupt the customer experience."

She said it is "still very early" in Sprint's advertising program, begun in October, which displays banner ads on wireless Web sites visited by Sprint customers.

In November, U.K. wireless carrier Vodafone announced that it is joining forces with Yahoo  to display ads to cell-phone customers who choose to opt into the program.

Also this fall, Yahoo and Google  announced their intentions to provide mobile ads.

And today, a Verizon spokesman confirmed that the company announced plans to enter the mobile advertising arena in 2007.

Nokia , the world's largest cell phone maker, likes the fact that carriers are getting involved in mobile advertising because they are well-placed to understand usage patterns.

Moreover, Nokia spokesman Bill Plummer told internetnews.com, advertising shouldn't come as a shock to cell-phone users.

Subscribers have already been able to experience full Web browsing for some time now, added Plummer.

Sprint said certain industries, such as automobile, financial services, food and consumer goods, have adopted this advertising format earlier than others. However, mobile ads will not really take off until mobile advertising is accompanied by other features such as coupons and the ability to pay by phone.

Senior editor Michael Hickins contributed to this story