IN THIS ISSUE: February 28, 2001 To Archive Index Wireless Marketing Myths: Are They Just Thin Air?

Wireless Marketing Myths: Are They Just Thin Air?

Millions of consumers reachable by wireless devices anytime, anyplace -- what a marketer's dream! Or is it?

I can just hear what my nana would have said if I told her that the Internet would one day be wireless and that advertisers would be able to reach us every minute, everywhere we went. "Technology, techschmology, who wants to talk to all those people!" she'd say. A lot of neo-Luddites would agree with her, but that isn't going to stop the growth of wireless marketing.

Andy Breen, VP of business development and technology partnerships for ThinAirApps in New York, told a recent Silicon Alley iBreakfast Club meeting that a lot of companies are betting on myths and rumors that will turn out to be little more than thin air. But debunking the myths depends on who you ask.

Myth: Advertising Will Support Wireless Content.
"People won't tolerate wireless advertising," Breen says.

But Jim O'Brien, co-chair of the Privacy Committee of the Wireless Advertising Association, a unit of the Internet Advertising Bureau has a different slant. "Everyone recognizes that intrusive, irrelevant ads have no chance of surviving," says O'Brien. "Advertising will be a part of wireless as it has been a part of every other medium that has ever existed."

Maybe, but traditional telephone service has spared us from listening to advertising while we use the phone. Supported by service charges and microbilling, phone carriers still manage to turn a profit.

Yet, early results of a current Wireless Marketing study by SkyGo involving 1,000 wireless users in Boulder, CO suggest that consumers may welcome certain types of advertising on mobile phones. Given free mobile phone service, over 50% of test users opted to receive more than the required three ads a day, says Loren Bigelow, SkyGo VP of product marketing.

The study focuses on the kind of wireless marketing that's attracting the most attention and experimentation so far - the "push" variety called Short Messaging System (SMS.) Much like email, SMS is a text-based system in which approximately 80 to 100 character messages appear on mobile phones. But not everyone's cell phone is set up to receive this kind of message, and some carriers charge people an additional monthly fee to use SMS.

SkyGo participants who receive SMS ads are rewarded with entry into vacation sweepstakes and are randomly given $50 and $100 gift certificates by top local merchants. Of course, rewards may not be so generous outside the test situation, and users paying for their own phones may not be so willing to give up minutes.

In "The M-Commerce Challenge" study by The Boston Group, nearly 90% of respondents said they want to control the type and timing of ads sent to their mobile devices and they want the power to switch them off at will.

Myth: The Demand for Content Will Be Huge.
No way, says Breen. "Companies should have learned from the Internet that you can't make money selling content to consumers. There are few dollars for wireless in the consumer market! It's the business market that will spend the real money."

But senior analyst Cynthia Hswe of The Strategis Group says their latest study shows that content does indeed have a chance.

"People are obsessed with Internet content and they will have to have it," she says. "Our lives are no longer hindered by lack of access to information, and wireless will provide easier ways to find what we want to know, when and where we want the information."

Other analysts' predictions for content that will provide advertising opportunities include scheduling, messaging, directories of all types, shopping, and product information.

Rather than Web content, ThinAirApps products focus on enterprise data such as groupware, contact management systems, and sales force automation for mobile users on the road. Its software platform "enables access to any data from any device." ThinAirMail, now simply called ThinAir v1.4 (free download) lets you access email from a mobile phone or Palm VII without having to tell people to send to a new address or having to forward your mail from another account.

ThinAir v1.4, a PC Magazine Editor's Choice, was the number one download from palm.net in the last quarter of 2000, according to Breen. The other three were all stock trading clients.

Myth: Industry Groups Will Take Responsibility for Monitoring Privacy.
Breen foresees a negative incident, akin to the Double Click cookie scandal, that will create a consumer backlash and could bring about government intervention.

According to Breen, people take their mobile phones very personally. "This is mine," they say, "and in essence you are touching me." Consumers will want to decide who and what can reach their wireless devices. Therefore, he predicts that there will be a form of blocking and filtering of unwanted messages that allows privacy. In fact, Nokia devices in Europe already have such capability.

Strategis' Hswe says users will create a personal profile to pre-determine which types of businesses can send them information. She believes these profiles will be set up on wireless devices and kept private by carriers, who'll protect the information because they want to keep customers.

However, considering that these same carriers now sell customer lists to the telemarketers who disturb our dinners with sales calls, one wonders how strong their commitment to shield customers from unwanted information assaults will be outside of test situations.

Myth: Device Manufacturers Will Call the Shots.
Carriers will decide what services become available in the United States, says Breen. In Europe you can switch phone carriers without having to buy a new phone or fundamentally change your plan. Here, that type of cooperation is a long way off. SkyGo's Bigelow disagrees, noting that carriers are realizing that if they don't work together on platforms, nobody will win.

Actually, says Hswe, device manufacturers are in the driver's seat right now because they say which software, applications and services will be featured. "They are all scrambling to provide the best features."

Myth: Micropayments and Integrated Billing Will Facilitate M-Commerce Sales.
"Carriers are behemoths who are afraid to cooperate with each other," says Breen. Integrated billing and a single payment standard will be the biggest hurdle to sales. However, he says, eventually companies with products and services to sell will force the issue and compel American companies to respond.

The Strategis Group predicts that most m-commerce transactions will involve the end user's accessing a bookmarked e-commerce site on which they have entered in their personal user information at a desktop PC or as part of an e-wallet service.

On the other hand, usability expert Brenda Laurel of the Nielsen Norman Group believes phone or cable companies, both of which already do microbilling for subscription services, will eventually handle centralized billing for wireless applications.

Bluetooth will likely play a role in the payment options that are eventually adopted as well. For example, in January, Registry Magic became a micropayment first mover when it launched its Consumer Payment Network. The system uses Registry Magic's patented technology and Bluetooth to enable secure wireless payments between consumers and merchants. The company will support Bluetooth-enabled wireless phones from manufacturers like Ericcson, Nokia, and Motorola.

Registry Magic claims merchants won't have to make changes in their payment processing systems and that the system will work with major credit card companies.

Myth: Entertainment Will be a Killer App.
Entertainment will be a side issue. What people want is instant messaging and email, says Breen. "People want data on their wireless devices," he maintains, "not entertainment." The wireless Internet will change the way people interact with information.

Several observers say that entertainment will be a part of the mix, but others maintain that retailers can benefit the most from mobile advertising. Bricks-and-clicks retailers (those with a physical and Web presence) will gain on pure play retailers when location-sensitive devices can drive traffic to bricks-and-clicks and bricks-and-mortar stores. For example, if you're shopping at a shoe store in a mall, an ad on your location-sensitive phone could alert you to a sale in a competitor's store, or invite you to a hosiery store.

Airports and bus or train stations could offer tourists downloads of city guides with instant access to tickets and reservations. Purchasing a puppy could lead to ads by trainers and pet suppliers. The possibilities are endless if the content stays relevant and if consumers don't feel overwhelmed or overloaded.

The SkyGo study provides several possible examples of successful wireless promotions. For example, a local theatre ran a concert promotion where users could hear the band, make reservations, and receive email about all the groups on the theatre's program for the season. A local Century 21 Realtor lets people check out listings by location on their phones and mobile devices.

Interesting examples of how the technology can be used abound. Hitachi and Xybernaut have agreed to a deal to develop and market a wearable computer based on a palm-sized computer and a headset display. The product will be sold in the United States, Europe, and Japan for around $1,700. Launch of the product is planned for this summer in all three markets, says Hitachi. The computer will allow wireless access to the Internet via an eight-ounce processor. The headset will weigh only 2.5 ounces.

The bottom line is that wireless players need to listen carefully to what consumers want or they risk the same disastrous results that the vast majority of dot-coms experienced from trying to push conventional advertising models at Web users. Like the wired Web, the new wireless medium will need its own new message. Finding what consumers will accept is going to require a lot of experimentationŸand, inevitably, some expensive failures.

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