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September 14, 2006 6:28 AM PDT

Advertising seeps into the cell phone

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The situation has created tension between the carriers and content owners. But operators can provide a wealth of demographic customer information, including billing ZIP code, age range and gender. They can also provide valuable behavioral information, indicating the types of content subscribers have purchased or mobile Web sites they've visited.

As a result, they are seen as valuable partners whose subscriber information enables advertisers to develop tightly targeted and relevant ad campaigns.

For example, advertisers could use location information to send SMS (Short Message Service) text messages to cell phone subscribers traveling to a new city. The messages could tout nearby restaurants or could include coupons to be used at certain locations.

I actually think mobile advertising could be good for consumers, especially if it's search-based advertising.
--Charles Golvin, analyst, Forrester Research

The most effective forms of advertising could be linked to mobile search, a technology that would help determine which topics users find interesting. A subscriber searching for a Coldplay ring tone, for example, may not mind an advertisement promoting the group's new album.

"I actually think mobile advertising could be good for consumers, especially if it's search-based advertising," said Charles Golvin, an analyst at Forrester Research. "If it's linked to search, consumers will get information that is relevant to them."

But Golvin warned that advertisements can't be too intrusive.

"My sense is that people won't be too enthusiastic with any advertising that interrupts what they're doing or doesn't provide them with useful information," he said.

The ads also must be relevant. "Just because I'm walking by a Starbucks doesn't mean I want to have a coffee," he added.

Operators say preserving a good customer experience is paramount. They also agree that any advertising they allow on their networks will have to be useful to consumers. Verizon executives said they'd also give customers the option of not accepting advertising at all.

"We won't be ramming ads down people's throats," said Richard Lynch, chief technology officer at Verizon. "I don't believe every customer will see the ads the same way. Some may choose not to see them at all, and for that option, they will pay accordingly."

Golvin said there is some evidence to suggest that consumers are willing to accept advertising if they can get some content for free.

But consumers shouldn't expect advertising to make all their mobile games, TV or music free.

"Mobile advertising will be a supplement rather than a subsidy," Sprint's Reddick said. "When we did research, we found that why customers adopt or (choose not to) adopt content has less to do with it being too expensive. Instead, people said they didn't subscribe because it wasn't relevant."

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Add a Comment (Log in or register) (19 Comments)
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Consumers like advertiser supported content and services.
by disco-legend-zeke September 14, 2006 8:02 AM PDT
We were very successful with advertiser supported Dialup Accounts back in the day.

Now we are investigating advertiser supported WI-FI.

Of course there will always be the high-end user that has no problem with our regular $29.95 a month 802.11 service, but the economies of 802.11N will permit make the last mile free, so its easily monetized by ads.
Reply to this comment
Send me an ad, lose my business forever
by rcrusoe September 14, 2006 8:08 AM PDT
Any company that sends me an ad loses my business.

If the ads ends up costing us anything they better expect class
action lawsuits.
Reply to this comment
I agree completely. Send Ad, Lose Business.
by Dell_Lied September 14, 2006 3:00 PM PDT
Leveraging the one device that travels with me to spam me in any way for any reason, will lose my business. I'd rather stop using cell phones completely than have them be another advert venue invading my life.

We pay cellular companies to use their service, so give us the service we pay you for, not what someone else pays them to give us.
Agreed
by nospam! September 14, 2006 6:18 PM PDT
I will not tolerate ANY ads on my cell phone.
The Source. CompuServe.
by converter42 September 14, 2006 9:17 AM PDT
Remember those? All this futzing around with proprietary applications and schemes for making vast amounts of wealth from content will fail for the same reason that The Source and CompuServe failed. The wireless providers need to get a clue and get their crappy technology out of the way and let cell phones do what users know they're capable of.
Reply to this comment
Cell Phone SPAM & AD'S
by lmoxon September 14, 2006 9:48 AM PDT
This is BS !!! At the prices we pay for wireless, the proividers should be required to pay the users a sur-charge for all the extra band width that is going to be comsummed by this crap!!!
The response for wireless connections is already poor at times!!!

To the providers; work on proividing a QUALITY & RELIABLE CONNECTION SIGNAL FIRST outside the metropolitan areas.

The DO NOT CALL only works on the CONUS area, after a period of time, it does not keep the "here today, gone tomorrow" SPAM market trash that already clog up our e-Mail services!!!

If the companies have money issues, perhapse a reduction in the multi-million dollar salaries & bonuses of the tier 1 & 2 management levels will return the companies back to profitability!!!!
Reply to this comment
Cell phones
by paulsecic September 14, 2006 10:34 AM PDT
custumers bought into it, so have fun!
Got to pay for 3G somehow
by i_am_still_wade September 14, 2006 11:11 AM PDT
After all, 3G is SOOOOO popular that everyone was waiting in line to watch tiny TV, download overpriced ringtones, and browse a small screen internet. Cell phone companies should focus on what we want first, and we don't want 3G. We want coverage anywhere and everywhere, not lies like "America's best network" or "Fewest dropped calls based on anonymous independent study."
Reply to this comment
Had better not affect me
by mkhecker September 14, 2006 11:13 AM PDT
All a cell phone has ever been to me is a phone. I rarely even use text messaging, much less even touch any of their content. I would be extremely angry if I were affected by advertisements which support a service I have no interest in using.
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Exactly!
by Below Meigh September 14, 2006 11:14 AM PDT
You said it! Amen! Maybe they'd show some profits if the execs didn't need those perks and parachutes!

Alas, some clever user will hack the phone to prevent the advertising anyway. Like an Adblock.

However, I would gladly accept advertising for say, a 50% reduction in monthly "excessive and useless" charges. (Doubtful...but wishful)
Reply to this comment
Does this say what I read it to say?
by aabcdefghij987654321 September 14, 2006 12:54 PM PDT
From the story: "But as operators look toward offering more data services on their networks, they are quickly realizing that there is a lot of money to be made in advertising--a new revenue stream that could offset the heavy losses they are experiencing in their voice businesses."

This simply cannot be true, if they are exepriencing heavy losses in their voice business then they wouldn't be promoting people to buy more phones. Most of what they sell right now is useless fluff (ring-tones) that cost them next to nothing but they charge a lot for but if their business model says they loose money for voice access (the primary reason for a phone) then they'd go out of business in a hurry.

That simply cannot be true, it they're advertising it as a truth then they must be lying.
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I wonder where the "Do Not Call" legislation fits into this.
by Big Tsunami September 14, 2006 1:25 PM PDT
I have all my phones (terrestrial and wireless) on a statewide and national "Do Not Call List". If I am being solicited either by pop up ads or someone on the other side of the phone, the net effect is the same.

Cell phone companies beware. You could be getting yourselves into some very hot water that could potentially cost you plenty.

Also, if you receive an unsolicited text message that is advertising, why should the subsriber have to pay for it.

This is nothing more than greediness on the part of the wireless carriers.

It will become what magazines have become: you pay for the subscription and then half of the publication is advertising.
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Maybe Verizon will lower their price
by Joey301 September 14, 2006 1:25 PM PDT
If advertising comes to the mobile web then maybe Verizon will lower their data prices. I'm sure the answer to that is NO, but it would be nice.
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Good - Break the addiction
by David Arbogast September 14, 2006 1:40 PM PDT
Dave lets loose.

<Rant>
Excellent news! Hopefully, this will **** off cell-phone users the point that their usage decreases. Talk about an addiction! Cell phones are a world-wide addiction that makes American's oil consumption look like a pathetic thumb-sucking bad habit in comparison. I see people who can't afford to EAT walking around with cell phones! Unbelievable! Kids in school talking on cell phones! Take them away! Driving like maniacs all over the road with their mind glued to a cell phone conversation. And this is a world-wide trend we are talking about. People are SO INSECURE, they get paranoid when they accidentally leave their cell phone at home, and will actually leave work to go get it! Heaven forbid your machine has to take a message!

*talk* *talk* *talk* *talk* *talk* *talk* *talk* *talk* *talk* *talk* *talk* *talk* *talk* *talk*
Nobody thinks any more... its all gabbing and socializing.

I have 2 phone lines at home and 1 at work. I have a satellite phone in the car that is for emergencies and has been used less than 10 times. That is MORE THAN ENOUGH.

I HATE cell phones, and their crappy quality, and high prices, along with their tendency to bring out the worst insecurities in humans. I do NOT own one, and god willing, will never have to.

"I forgot my phone! What am I going to do? What if somebody tries to call me!" Suck it up and get an answering machine. Better yet, tell your friends to **** off and stop calling you when they know you are working.

*I* decide how to use my time - not some insecure button-pusher who can't stop calling me throughout the day. I will talk to people when I want, and ignore them when I want. And contrary to the suggestion that I could simply turn my phone off, nobody ever does. Not even at the movies.

Start a worthwhile movement - smash your cell phone.

/End Rant
/Off Soapbox
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What They Are Really Saying
by maxwis September 14, 2006 4:20 PM PDT
What the cell carriers are really saying with all this ad garbage talk is:

1) We made a decision to spend billions of dollars on high speed networks just because Europe did. Everyone knows Europe is so cool, and so far ahead of us. It was too boring spending the money to improve the voice quality of the network, and Wall Street would not have been interested.

2) We hired a bunch of 22 year olds to tell us what the 18-34 demographic wanted in the way of content for our new network.

3) We gave the 18-34 demographic what we thought they wanted, and priced it accordingly. We ignored the 35-99 demographic because all they buy is Polident anyway.

4) We realized that the only content we could provide at the decided price point was re-packaged garbage that people see at train stations and on airplanes. Shows like Comrade Katie and the Evening News and The Best Of Everybody Loves Raymond.

5) We couldn't get decent content at the decided price point and the 18-34 demographic won't pay to watch Raymond anymore. So we have no choice but to prostitute our cellular network to the advertisers, take the money and run. Wall Street will be really excited about our new strategic direction and our stock price will go up. The compensation committee will vote to give us a boatload of low-priced, back-dated options so we can upgrade the Holmby Hills mansion with a brand new multimedia theatre system that filters out cruddy commercials. Raymond will look great on that new 60 foot screen.
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forget it!
by halfbaket September 15, 2006 2:37 AM PDT
Don't know about you guys in the US but in Europe this would be suicide. No way no way NO WAY would I allow ads on my phone. The first ad I get, I'm gone. Finished. Vodafone I hope you're reading these comments. I don't want "more content" or any of that 3G crap. I just use my phone for phone calls and text messages - that's it!
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Share police stories and news
by lucifinil September 17, 2006 11:35 PM PDT
Share police stories and news

Check the news from police.vost.com

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social, finding friends, blogs, blogging, group, forum, military community,
search people, message, military photo, military image, love, dating,
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Reply to this comment
by mk_rock August 11, 2008 5:37 PM PDT
No, no no no cell phone ads.
Reply to this comment
by pvollmer November 9, 2009 5:19 PM PST
i am sure each company will offer an opt-out option...........................................for a fee!
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