Why do companies want to advertise on mobile phones

A. Many leading companies believe that mobile phones are the next new medium for advertisers. The idea is born of the text messaging phenomenon, and with 929 million text messages sent out in the UK during January 2001, companies are realising that it is the cheapest and fastest way to communicate with potential customers.

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Mobile phones are the ultimate in direct and personalised marketing and advertising is being seen by the industry as vital if third-generation networks are to have any economic value. Buzz words like brand-in-hand and location-sensitive marketing have meant that mobile phones are being looked to as, possibly, the most effective advertising medium to come along in years. Unlike TV or Internet advertising, mobile phones provide a highly personalised medium, which allows consumers to be targeted, like never before according to individual preferences, such as leisure activities, shopping patterns and location.

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Q. How will these phone ads work

A. Phone advertisers say that the ads will not just be sent out randomly to mobile phones.�They intend to target specific consumers by analysing data that mobile phone owners submit to network operators when they sign-up. The mobile ads will be interactive and consumers will be asked to respond to the ads by ringing a phone number or logging onto a website, to find out more about the offer or service.

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Q. Which companies are proposing to advertise their services on mobile phones

A. Nestle, the French food company, is soon to launch a series of KitKat-sponsored games on mobile phones. McDonald’s, American Express, and Lastminute.com are also set to join the bandwagon. And as the UK General Election approaches, the Labour Party has begun plans to target voters via their mobile phones.

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Q. When will these ads start going out

A. Various GSM service providers are already testing the water by issuing adverts using the widely available short messaging service (sms). In Japan, a company called Spotcast has been operating a mobile ad service since 1999, and has about 100,000 users delivering over 2 million adverts a month. The managing director of WCRS ad agency, Charles Vallance, believes that mobile marketing will be commonplace in the UK by the end of this year.

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Q. Is there any evidence that mobile marketing is effective

A. Yes. In a recent two-month trial carried out in the US, the mobile-phone marketing network WindWire issued a series of ads�that inspired Internet click-throughs and phone call–up rates from 15% of the adverts that were sent out. The trial also showed that about 86% of mobile phone owners do want free or ad-subsidised content.

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In the UK, similar trials have recently begun, involving 35 major organisations including Cadbury’s, Carlsberg, Tango, Amnesty International and Capital Radio. The five week trail, which began two weeks ago, has already found that users are responding to between 10 and 28% of adverts, well above response rates for usual direct marketing methods. The trial service works by sending participants three messages a day from advertisers whose products and services match the personal profile of the customer. In return the consumer gets 5p per message received and can choose to claim the reward in mobile phone airtime, WH Smith vouchers or to donate it to charity.

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Q. Can mobile owners opt-out of this service, if they don’t want to receive the ads

A. Although the legislation surrounding mobile phone advertising is yet to be finalised, representatives from the industry, including mobile phone operators have agreed to abide by a set of self-regulatory rules to govern the use and potential abuse of the mobile phone advertising. This is, however, merely a voluntary code of conduct designed to impose ethical boundaries on mobile phone advertisers including restrictions on the types of ads that can be sent to people under the age of 16, and by allowing to consumers to opt-out of the service if they wish. Therefore, users will have the power to decline mobile phone advertising.

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Advertisers and operators are keen to ensure that mobile ads do not become the kind of irritation that Internet users are currently experiencing with banner ads. Any consumer backlash could damage the advertiser and ricochet on to the mobile network operator. And if consumers are unhappy about the content of branded text messages, or don’t want to receive ads, the industry will suffer greatly.

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