Google, Microsoft, Yahoo, AOL and other online giants have all said they hope to take advantage of what they see as great potential in mobile advertising. But some start-ups say that those companies are looking at delivering the ads the wrong way.
While the most popular mobile advertising mechanisms so far are banner or text ads in mobile web pages, some start-ups are pushing technology that essentially delivers a pop-up advertisement to mobile phones. The ads appear not when customers are using a browser, but they can pop up on the phone's idle screen any time.
These companies, such as Mobile Posse and Acuity Mobile, say they're working to ensure that the ads are so useful to customers that they won't be annoying.
Mobile Posse offers what it calls idle screen ad insertion in the US. After downloading a small application onto a phone, users start getting advertisements that often include discount coupons on their phones. Around 5,000 people in Ohio and Indiana with mobile phone service from Revol Wireless have tested the service, which also initially collects some basic information such as age, gender and zip code from users in order to best target the ads.
Mobile Posse is in the midst of another trial with a "top five carrier" that it can't name and has a commercial launch planned for the near future.
Mobile Posse's system learns from the type of ads that users click on so that it can avoid annoying phone users, said Jon Jackson, CEO of Mobile Posse. "The last thing we want to do is advertise to someone who is not interested," he said. If, for example, a user receives five ads about fast food establishments and doesn't click on any, Mobile Posse won't send any more similar ads to that user.
He says the Mobile Posse system should be far more attractive to advertisers than mobile banner ads. That's because banner advertisements are limited to the approximately 30 million people in the US who use mobile web browsers. On average, those people rack up four to five page views per month. Compare that, he says, to the approximately 200 million people who can receive idle screen ads from Mobile Posse, and an advertiser may see a more interesting prospect.
Acuity has a similar offering, only the advertisements can also be delivered based on a user's location. Mobile phone users must first download a small Java application onto their phones and can set parameters about the types of advertisements they receive. Then, if they're near a certain coffee shop, for example, they might receive a coupon or information about special offers.
But these companies face a significant hurdle in that they require close relationships with operators. Some require partnerships for technical reasons in order to enable their technology. Others would greatly benefit by teaming with operators that can ease the distribution of software by loading it onto the phones before selling them to customers. Otherwise, end users may need to visit a store to get the software that enables the pop-up ads.