Verizon Wireless is among the United States most widely advertised brands and is poised to become the advertising medium itself. Beginning early next year, Verizon Wireless will allow placement of banner advertisements on news, weather, sports and other Internet sites that users visit and display on their mobile phones, company executives said.
The development is a substantive and symbolic advance toward the widespread appearance of marketing messages on the smallest of screens. Advertisers have been increasing the amount they spent on mobile marketing, despite lingering questions about the effectiveness of ads on portable phones.
Verizon officials said their initial foray would be a cautious one — they will limit where ads can appear, and exclude certain kinds of video clips — and thus may invite greater demand to place ads then they can accommodate.
“We know we can make significant dollars in mobile Web advertising in 2007,†said John Harrobin, vice president of marketing and digital media for Verizon Wireless. “That said, we likely will not — we want to take it carefully and methodically, and enable the right experience.†More generally, he added, “Mobile advertising is going to take off in 2007.â€
In absolute terms, the amount of money spent on advertising on mobile phones has been small but it has been growing rapidly. In 2005, advertisers spent $45 million on such messages, and should spend around $150 million this year, according to Ovum Research, which projects that such spending will reach $1.3 billion by 2010.
The interest of advertisers in the medium stems from a theory that ads placed on mobile phones could create a particularly intimate bond with consumers. The gadgets are ubiquitous, personal, and messages could theoretically be tailored to individuals based on demographics like age, gender and location.
Numerous factors have limited the growth of cellphone advertising. Chief among those factors has been the reticence of carriers to allow ads to appear alongside news, sports and other information that is provided by their official content partners. These partners, from ESPN to USA Today and dozens of others, appear on the content menus that subscribers see when they use their phones to search for information over the Internet.
Carriers have also been concerned about annoying cellphone users with obtrusive marketing messages.
In October, Sprint became the first major carrier to allow advertisements to appear with content that is listed on its menus, or as they are known in the industry, their official content “decks.†Cingular, the nation’s largest wireless carrier, declined to comment on whether it would allow advertising on its decks.
The participation of the carriers would greatly broaden the potential audience. Seventy to 80 percent of what people view on their cellphones derives from links on these decks. The rest of the content is viewed “off deck†— on innumerable content sites that wireless consumers are free to access over the Internet.
Lack of access to these cellphone screens “is one of the biggest considerations right now,†and has limited growth, said Angela Steele, a mobile marketing expert at Starcom USA, a media buying and planning firm whose clients include Kellogg, Nintendo, Oracle and Allstate.
Even without cooperation from carriers, advertisers have been able to reach consumers visiting off-deck sites, and such marketing has grown in size and in scope.
The first advertisers drawn to mobile phones tended to be quick-serve restaurants and hotels businesses that people might want access to on the go. But increasingly, there is traditional brand marketing, said Jeff Janer, chief marketing officer for Third Screen Media, a mobile ad management company that pairs advertisers and agencies with providers of mobile content, like USA Today and the Weather Channel.
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