Wireless Ads Already Here
By Joachim Bamrud, Fri Nov 10 00:00:00 GMT 2000

There's plenty of talk about advertising on wireless devices down the road, once we get location-based services, push and 3G color terminals in place. However, fact is, the ad rush has already started.

After visiting WAP sites almost daily since March of this year, I was a bit surprised when I saw a Motorola ad on the Manchester United site a couple of months ago. Then I thought, "Well, this may not be such a big deal, since Motorola is a vendor and simply has a lot invested in WAP."

Then gradually I started seeing an ad here and another there. Some had logos, others just basic text links or messages, placed discreetly at the top or bottom of the page.

Contrary to what I originally expected when I first learned of the concept earlier this year, the ads I actually saw were not annoying. Despite the small screen sizes typical WAP phones, ads can actually work through them, even with limitations like no color.

While the first wave of advertising seems to be dominated by technology players (Intel, Sun Microsystems, Texas Instruments, Motorola, Ericsson, Siemens), there are also non-technology companies entering the fray.

One such company is UK bank NatWest, which is running a campaign on UK sites like Fonedata, WAPaResult, Breathe and Healthamigo. That campaign was organized by 24/7 Media, which has been aggressively pushing wireless advertisement and placed what appears to be the first WAP ad in the UK: An ad for Football365.com on UK portal Fonedata in April.

Other non-technology advertisers include Emirates (the United Arab Emirate airline), which ran a campaign on Sports.com's WAP site in connection with the Sydney Olympics. "We used the Sydney games as a platform to build awareness of Sydney as a new destination for the airline," says Jason Dooris, managing director of MediaCom TMB, which placed the ad on behalf of Emirates. "The results were extremely promising."

The response rate on the campaign was between 10% and 25%, compared with the Internet average of 0.4%, Dooris says. "MediaCom is planning to continue using WAP as a channel for its clients," he added.

One company that has been quite aggressive in advertising on WAP has been vnunet.com, the UK technology news provider. It has advertised on WAP sites like WAPaResult, Football365.com, Fonedata, Wapworld, XY Network and T3. This month it started advertising on the WAP sites of Sky and BT Internet.

"We're a technology site, and we want to reach the early adopters with WAP," says Lyn Kehely, marketing manager of vnunet. She says the campaign has been a success so far in boosting brand awareness, but she couldn't say whether traffic to vnunet's Web and WAP sites had grown as a result of the campaign.

Despite these early entrants, it's clear that wireless advertising is still very much in its infancy. The big companies that compile Internet traffic like Media Metrix in the United States and MMXI in Europe have yet to start doing so for WAP. And ABC electronic, an auditing company that has more than 400 Web clients in Europe, only has two WAP clients (Sports.com and UK site Loot.com) at this time.

Some ad agencies, like 24/7, have their own ad server that its clients can use as a reference for traffic and clickthrough rates. But the launch of specialized auditing services will help boost confidence in the wireless sector, says Antti Eranne, director of strategic development at 24/7 Europe.

"In the future we'll see a similar type of auditing as on the Web today [which] is a welcome development since it reduces uncertainty for the parties involved," he says.

Robert Black, UK sales director for Sports.com, says the decision to audit its WAP site was natural extension of its Web site.

"There needs to be something that advertisers can look at," he says.

Another problem is the relative low usage rate of WAP so far. There are around two million WAP users in Europe today, less than the number of unique visitors Yahoo.co.uk alone had in August.

Yet, ad agencies point to three key factors that make wireless advertising attractive today:

1) Click-through rates - WAP click-through rates are substantially higher than on the Web. 24/7 reports click-through rates between 5% and 10%. While lower than what MediaCom reported on its Emirates campaign, they are still significantly higher than the average Internet rate of 0.4%.

2) Exclusivity - The fact that the screens are so small means that there really isn't space for more than one ad at a time, which contrasts with your typical Web site.

3) Prices - Finally, the price for all of this is actually much lower than the Web. Typical cost per thousand visitors (CPM) is US$20, whereas the Web operates with $100, says Eranne of 24/7.

The next big ad drive will come with the introduction of location-based services, so called 'push' technology on WAP, GPRS and new devices that feature larger screens and color browsers.

With location services, a user searching for a list of the nearest Italian restaurants, for example, can see an ad for one of those restaurants at the top of the page. 'Push' will enable an advertiser to initiate contact with a mobile user and can be linked to location services as well. For example, a person walks down a certain street in London and then gets a data call from Virgin telling him that the outlet on that street has a sale on his favorite artist.

This kind of service is already being criticized and will depend on privacy legislation in the EU and the United States. Probably it will only be used if you have given your permission before hand, for example when you register for a specific service ("Would you like to receive a mobile alert when we have news for you?").

GPRS (General Packet Radio Service) will clearly help as well, since the typical session will be less 'rushed' than today with regular GSM and per-minute charges. With GPRS, which will provide you with 24-hour constant Internet access, billing will likely be per bit or even a flat monthly charge (like i-mode in Japan). Thus you might be a bit more forgiving when seeing even a small ad at the top of each section within a WAP site.

And then, of course, there are the devices themselves. I recently saw a preview of the Motorola Accompli 009, which features color graphics and is GPRS-enabled. The device, set for US and European launches early next year, is a combination phone and PDA, with a larger screen than you find on the typical phones.

"During the night it can download five ads and then when you use it during the day, you'll see them pop up when you're calling a specific service," says Dominic Strowbridge, director of Motorola's application global network (MAGNet) for Europe, the Middle East and Africa.

According to recent forecasts by Ovum, wireless advertising will reach $16.4 billion by 2005. Arthur Andersen estimates the figure in Europe alone should reach $884 million.

In the interim, WAP sites like Sports.com are bullish about deriving revenues from ads.

"We're most definitely optimistic," says Black. "I go to conferences and hear people talk about ad potential in the future, but we're generating revenue now."

Joachim Bamrud is the editor of at Wapland.com An award-winning journalist with 17 years experience as a writer and editor in the United States, Europe and Latin America, Bamrud has worked for various print, broadcast and online media, including Latin Trade, Reuters and UPI. He can be reached at jbamrud@wapland.com.