Banner days for handhelds

With interest in that tiny bit of real estate above your PDA or cell phone keypad heating up, service providers and industry advocates are debating standards for the coming onslaught of handheld advertisements.

Among the first to weigh in on the matter is a special interest group called the Wireless Advertising Association, which spent most of the summer formalizing a proposed set of standards for such ads. The guidelines, group members said, are designed to protect users' interests and are based more on common sense than on technical compatibility.

"The WAA is really setting up the standards on how much space would be devoted to an ad, and how many lines and so forth," said Bob O'Hare, chairman of the WAA and director of new business development at Motorola Inc., in Schaumburg, Ill.

For Short Message Service ads, a full advertisement must be limited to 100 characters.

Standards for Wireless Application Protocol-based phones vary according to the size of the screen and the rules of the carrier. Some ads are "content-friendly," which means they are designed for carriers or publishers that require some non-ad content to appear on the opening screen of a device.

The group is recommending an opt-in approach for messaging devices and phones, meaning that customers will have information sent to them only if they ask for it.

Standards for PDAs (personal digital assistants) will vary according to whether a device supports the Palm OS or Pocket PC platform, but the general suggestion is that the graphic be limited to about 215 by 46 pixels, with two lines of text.

Future guidelines will address Java 2 Micro Edition, Compact HTML, Binary Runtime Environment for Wireless and other wireless platforms that emerge.

"Coordination is challenging, and in order to do advertising, it's essential that there be agreement in creative and technical standards," said Tom Bair, a Mountain View, Calif., consultant who chairs the advertising standards initiative at the WAA.

While the standards provide clear outlines of how to design the least intrusive ad possible, they are really more suggestions than rules. The WAA has hundreds of members, ranging from wireless ISPs (Internet service providers) to wireless handset makers, but being a member does not require these companies to adhere to the organization's standards.

Many wireless ISPs, including SkyGo Inc., WindWire Inc., Vindigo Inc. and AvantGo Inc., already offer wireless advertising services. AvantGo is the largest, and company officials, so far, report great success.

"We probably have 90 percent of the wireless advertising market," said Mike Aufritht, general manager of AvantGo's mobile marketing and commerce division, in Hayward, Calif. Aufritht said he wasn't too familiar with the recent WAA standards, even though AvantGo is a member. "We've had advertisers do a bunch of different things with it. Bank of America [Corp.] did a full credit card application on the device. CompUSA Management Co. ran a mobile coupon that was good in stores nationwide."

For PDAs, the ads have a 2 percent click-through rate, Aufritht said, compared with less than 1 percent for Internet ads that appear on a PC screen.

Phones, Aufritht said, are another story, at least until large-screen smart phones come along.

"We have run ads on phones, but there's not much you can do with them," Aufritht said. "We actually don't advise our clients to go through us to do phone ads. Sun Microsystems [Inc.] wanted to do one, so we did one for them. But we don't advise it."

Still, the hope is that if a set of standards at least exists, then wireless carriers will be more interested in supporting wireless advertisements.

In the United States, AT&T Wireless, Nextel [Communications Inc.] and Sprint Corp. have been investigating the idea of supporting ads on their wireless data services.

"Carriers are interested in [the creation of] the right standards so that people will use those guidelines within their services," the WAA's O'Hare said.

Carriers are often gun-shy about any new wireless initiative but are especially wary of this one—the issue is less about standards than about privacy.

A recent survey by The Yankee Group, of Boston, found that 64 percent of respondents were worried about misuse of personal profile information and 57 percent were "not very willing" or "not at all willing" to receive ads, even in exchange for free wireless services.

An issue that raises both concern and advertising potential is that of location-based services—giving customers the option to receive ads for local businesses based on where their phone happens to be. WAA officials said they expect this issue to heat up this fall. The Federal Communications Commission has required that by October, 911 operators must be able to track the location of a cell phone. The onus is on the carriers to make this happen, but the possibilities for advertisers are obvious—if the police can track cell phones, so can they.

The WAA said it does not expect location-based advertising to take off for quite some time. For one thing, most carriers have asked for an extension to meet the 911 deadline. For another, they don't expect wireless data services to hit critical mass for a few years. But the association's privacy group is already being pre-emptive about government regulation of wireless advertising. This summer, the WAA hired a Washington lobbyist to keep the government apprised of its efforts.

"The concern is that we don't get premature about policing these things," said Jim O'Brien, co-chair of the privacy and consumer acceptance committee for the WAA. "A lot of things people are concerned about haven't been implemented yet."

The WAA will meet next month at the CTIA Wireless IT and Internet show in San Diego to discuss guidelines for privacy and spam.