Mobile Marketers Treading with Caution

Like m-commerce, mobile marketing and advertising has had its fair share of hype over the last two years. Expectations of the value of m-advertising spending in 2005 range from less than $1 billion to nearly $7 billion. While there is strong evidence to suggest that mobile marketing and advertising can be very effective, vendors are approaching this medium with great caution. Why? Spam and privacy. If one ever needs to see the potential drawbacks of mobile advertising from a mobile user’s point of view, then one needs to look no further than Japan. Spam became so bad for i-mode users in late 2001 that they began leaving their mobile phones at home because the ads were so annoying. Over the last six months, NTT DoCoMo has used a variety of technical and regulatory means to curb spam, but it still gets through. Australian wireless operators in 2001 also had to block wireless ads as their networks became blocked after an influx of spam. As the level of spam seems to be continually increasing in the US on PC-internet, spam will be a factor in the US wireless sector at some point. To this end, legislators at both the state and federal level have proposed regulatory solutions aimed at banning spam on mobile devices. California Governor Gray Davis recently announced new legislation in that state outlawing the sending of unwanted or unsolicited commercial text messages to mobile phones and personal digital assistants. The new law gives recipients of the messages the right to sue senders for the cost of receiving each message. Wireless spam is currently not a major problem in the US only because of the fact that there are few people using wireless e-mail and short messaging service (SMS), but it won’t be long until that changes. An A.T. Kearney study in 2002 showed that only 8% of US mobile phone users had received SMS advertising, compared to 35% of global mobile phone users. Now that the major wireless operators have agreed to interoperability of SMS across their different network technologies, SMS is likely to increase rapidly, and so too will SMS advertising.

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