Cell-phone users may balk at receiving video and advertising on their handsets, but advertisers are ready to spend.
Even if 71% of people surveyed last month by market researcher RBC Capital Markets Corp. say they don't want video and ads on their cell phones, advertisers are undeterred. Nearly 90% of major consumer brand marketers in a separate survey say they plan to market their wares via cell phones anyway, according to Airwide Solutions Inc., which advises mobile carriers. Revenue from mobile advertising is expected to hit about $1.3 billion by 2009, up from $50 million in 2005, projects telecommunications research firm Ovum.
Consumers reject the idea of video and ads on phones, say media experts, because they assume it will replicate the Net, where they already feel assaulted by pop-ups and adware. A promising model, though, suggests Rishad Tobaccowala, chief innovation officer at ad outfit Publicis Groupe (PUB ), is using the cell phone as an "opt-in" ad device. Carriers, he says, would be smart to "incentivize consumers to accept ads relevant to them." One obvious carrot: offer credits to decrease a user's cell-phone bill.
It's not that people hate advertising. They just hate ads that are irrelevant to them. Make it worthwhile, and the cell phone might just become as useful a tool to consumers as TiVo (TIVO ).
By David Kiley