Service Expected boom in wireless ads spurs debate
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,
For Short Message Service ads, a full advertisement must be limited to 100
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
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
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
"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
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
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
The WAA will meet next month at the CTIA Wireless IT and Internet show in San
Diego to discuss guidelines for privacy and spam.