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Cellphone Ads on the Way

Kim Hart

Mobile advertising has been pegged by many as the next great way to reach consumers. And it could rewrite the current cellphone business model. Yesterday I had the chance to sit down with Mark Ein, founder and CEO of VentureHouse Group in D.C. He's invested in a wide range of technology companies, including XM Satellite Radio, and is known around here for having a great eye for tech trends.

One of his companies is Mobile Posse, based in McLean, Va. Founded by former AOL executives, Mobile Posse makes deals with wireless carriers to get ads in front of cellphones users. Customers can opt into receiving ads on handsets based on their ZIP codes, age group, gender and other demographic information. The ads disappear when the phone is in use. Wireless companies get a share of the ad revenue.

So, say you're walking off a plane in an unfamiliar city. Your phone would automatically detect your location and send you ads about car rentals, restaurant specials and nearby hotels.

Mobile Posse's been working with smaller regional carriers, such as Revol Wireless in Ohio, and hopes to soon roll out the service with other major carriers. Just yesterday, Mobile Posse announced its second round of funding of $10 million.

Getting these types of services on cellphones and other devices may get easier now that some wireless carriers are taking steps to give third-party companies access to their networks, which means they can offer their products to more customers. Ein said that could change the game for lots of companies trying to break into the mobile advertising market.

Now the big question is whether customers will actually want to get ads on their cellphones.

By Kim Hart  |  December 12, 2007; 11:13 AM ET  | Category:  Kim Hart
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Comments

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Please, just give us the ability to opt-in or opt-out. My wife is tired of getting spammed with stock tips at 2AM.

Posted by: MSchafer | December 12, 2007 1:28 PM

One sentence: Over my dead body.

Posted by: Brent | December 12, 2007 4:40 PM

The default had better be "opt-out"!

Only the really lonely and bored will opt in.

Posted by: Gary Goldberg | December 12, 2007 5:25 PM


A Constitutional Amendment:

"The Freedom From Advertising Act"

Posted by: Mr. Brown | December 12, 2007 6:40 PM

No wonder the carriers push so hard on long-term contracts: first reel you in, and then feed you to whomever pays.

Posted by: Gilgamesh | December 12, 2007 7:29 PM

Verizon users can block all text messages sent from the web or thru email. It'll probably do the trick if you're getting text message spam on your phone. You need to create an account for yourself on vtext.com to do it, then change the options under Text Messaging -> Preferences -> Text Blocking (or something similar).

Posted by: ninjah | December 12, 2007 7:35 PM

Consumers respond to incentives. They will need to be enticed somehow. Perhaps, if you opt in you get free internet access and unlimited txts. Or you get more minutes etc or cheaper packages.

The carriers can easily create a win-win situation if they just pass on some of the revenue to the consumers in shape of discounted plans/features, yet still having a net benefit from this scheme (let's face it, the marginal cost for extra minutes, txts and internet is negligible, it is primarily in the shape of revenue foregone).

I think it is definitely doable, but will see how it is implemented.

Posted by: Mohammed | December 12, 2007 10:30 PM

No! I will not use any service that pushes ads at me. The Washington Post's own website is bad enough in popping screens up. I NEVER patronize these advertisers. I don't mind Google's model of showing ignorable ads on the side.

Posted by: Ghostmoves | December 13, 2007 12:44 AM

"Now the big question is whether customers will actually want to get ads on their cellphones."

And the big answer is, "NO!" Is that simple enough?

Posted by: Woody Smith | December 13, 2007 9:01 AM

OK, lemme see.

I view web sites that are plastered with ads; sometimes there is room for actual content.

I listen to a non-commercial radio station that still puts commercial announcements into its programming.

I read a newspaper that is full of ads.

I pay for cable TV service so I can watch an hour-long show that consists of 40 minutes of programming and 20 minutes of commercials.

In the newspaper I can ignore the ads, but on TV, radio, and web sites I can't.

Do I want pop-up ads on my cell phone?

Um, no.

But I'm willing to bet that in 30-40 years cell phone ads will be the norm. Fortunately I won't be around to see them.

Posted by: ajsmithva | December 13, 2007 9:20 AM

THE AMERICAN AGE OF THE CONSUMER SHALL NOT BE THWARTED! YOU WILL BUY - AND DISPOSE OF - THEN BUY AGAIN - AND BIGGER!

Modern advertising techniques are Orwellian; old-school propaganda techniques to condition the consumer have been working well and so will not stop without a huge backlash from those consumers.

YOU.MUST.BUY.NEW.STUFF.
YOUR.OLD.STUFF.SUX.
THISISNEW!NEW!NEW!GETITNOW!NOW!NOW!

The result of conditioning is painfully clear when you see people camped out for iPhones and lined up around the block on the day after Thanksgiving - which has even been given a catch phrase - Black Friday. The sheeple flock to catch phrases.

Posted by: LALA | December 14, 2007 12:14 AM

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