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Get ready for mobile marketing

Get ready for mobile marketing

The main takeaway from the CTIA Wireless IT & Entertainment show this year was clear: Your cell phone is about to become a handheld information and entertainment center. The implications for companies are potentially huge. The mobile phone is positioned to become the dominant e-commerce platform.

There are more than 2 billion mobile phone users worldwide. The number of mobile phones sold each year - more than 600 million - dwarfs the number of PCs sold. Efforts are underway to develop handsets costing less than US$30 to lure the next billion users.

Mobile phone operators are sitting on a marketing gold mine. Privacy concerns aside, they know whom you call, when you call, where you call from and how much you spend calling. Locating technology lets merchants reach out to potential customers who happen to be in the vicinity. Although pundits demand total privacy, the average consumer might be willing to trade a little privacy for lower phone rates and some cool applications.

The mobile phone operator's most valuable asset is its billing system. These systems handle millions of subscribers and hundreds of millions of small transactions every month. Ring tone and mobile game providers are exploiting mobile billing systems. Inevitably, subscribers will be able to purchase other products and services by tacking the charges onto their mobile phone bills.

Third-generation wireless systems capable of delivering music and video to mobile handsets are finally arriving. People are not going to watch two-hour movies on tiny screens, but they will watch short videos. Some of these videos will be subsidized by advertisers. Others will leave us wondering whether what we just saw was entertainment or a sales pitch - or both.

Some unique mobile marketing applications are emerging. Semacode has developed a technology that connects camera phone users to a vendor's Web site when they point the camera at a special bar code containing the URL and clicks. Mobot takes that concept a step further with its visual search technology: The user photographs a product label and is connected to related information and offers.

The two biggest obstacles to mobile marketing are privacy and ease of use. With billions of mobile phone subscribers, however, it's a safe bet that hundreds of millions of users will accept some targeted marketing in exchange for service discounts or other perks.

Dozens of companies are working to transform devices with small screens and numeric keypads into powerful e-commerce terminals. Some are reducing the number of key clicks required per transaction. Others are harvesting key-click data to make applications more intuitive and appealing.

Mobile marketing will play out much like Internet PC marketing. There will be a mad dash to attract and retain "ears." There will be some silly business models. And there will be many failures along the way. But there also could be another eBay out there. Companies should approach this new marketing medium with a mixture of skepticism and respect.

Brodsky is president of Datacomm Research in St. Louis. He can be reached at ibrodsky@datacommresearch.com.


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