Mobile Ads Proliferate Despite Concerns

Advertisers are just beginning to get their feet wet in mobile advertising, but there's a lot of splashing going on, according to some people in the industry.

"Every single client wants to buy it," said Elizabeth Ross, president of Tribal DDB West, an online advertising agency. For example, Tribal client Pepsi-Cola North America is examining mobile ad possibilities for all of its brands, she said. However, that doesn't mean all those clients are committed to the mobile medium, she added.

"Mobile is the thing most every client wants and is thinking about ... but also is confused about," Ross said. "How do they do it, what do they buy, who do they buy it from?"

What's not clear is how best to use phones for advertising, according to Ross and other participants at the Mobile Ad Degree symposium last week in San Francisco. The potential is huge, but the market is still small, they said.

Mobile Surfers Follow the Ads

In January, mobile research company M:Metrics found more than 120 brands, from a broad cross-section of industries, advertising on the 100 Internet domains most visited on mobile phones, analyst Seamus McAteer said.

"This is a real medium. There are real dollars being spent on it," McAteer said. The actual number of dollars is not yet that great, he acknowledged: Mobile display advertising in the U.S. was an approximately US$200 million industry last year. But he expects spending to at least double this year, even in a weak economy.

The ads on phones aren't just mobile-oriented and geared toward getting users to sign up for a service or download something on the spot, speakers at the event said. In addition to those "direct response" ads, there are now an increasing number of ads for brands, a sign that mobile advertising is maturing, said Brian McDonald, vice president of sales at Mywaves, a mobile video provider.

Cell phones are a good place to reach consumers because they generally belong to one person and there is a lot of information available about that user, said Pete Distler, general manager of Sprint Mobile Media Network at Sprint Nextel.

Targeted for Best Response

An automaker recently bought ads targeted at certain kinds of Sprint subscribers in Chicago and Houston and let them make appointments to test-drive a car at the local dealer, Distler said. Hundreds of subscribers made those appointments on their phones and kept them, he said. The campaign was later repeated in several other large markets, according to Distler. Another advertiser on Sprint, a brewery, was able to display its beer ads only on the phones of subscribers who were over 21 years old, the legal drinking age in most of the U.S., he said.

Because it uses information about subscribers to make sure they only get relevant ads, Sprint has not had any complaints from subscribers about ads, according to Distler. This is true even as Sprint has suffered from a high number of complaints about its customer care, he noted.

The fact that consumers always have their phones with them is a key reason to advertise there, said Ross, whose agency handles Web and other interactive advertising, as well as mobile. One Pepsi brand is taking advantage of this fact with a promotional giveaway of last-minute admission to NASCAR races, using codes sent to phones, she said.

The phone "literally is a part of you in a way where, if you don't have it, then you feel uncomfortable," she said.