Mobile Advertising - Truth or Dare

Mobile advertising. People will have coupons downloaded to their phone and run to Target to make a purchase. Or, using GPS technology, Starbucks will send an ad for an extra shot of expresso just as you pass the local storefront. Maybe people will even watch superbowl commercials over again (or for the first time) on their way home from where they watched the game. It all sounds great, and I've heard it before. We were discussing mobile banking back in 2000 at Citigroup. Guess what - it hasn't really taken off. Turns out people are just fine with sitting at their computer to pay bills and transfer balances. So is mobile advertising truth?

Well, what we do know about mobile is people will buy content, mostly ringtones and games so far. In fact, NBC makes more from selling shows over mobile phones than from the Internet (where many shows are now free on Hulu.com). Just think, on the Web someone pays $.99 for a song, but via their cell phone because the bill is at the end of the month, they think nothing of downloading part of that same song for $2.95! Yes, paid for content on mobile phones is a success and will continue to be as long as it is just added to their monthly bill.

People also like Internet access on their phone, and the ability to text. And overseas, some of the applications I described above are happening. So, will mobile advertising take off? I'm not so sure. One of the great myths of couponing is that companies want people to use them. For the most part, that's really not true. Companies want customers, ideally full paying ones. To get new ones (or to get old ones to buy more), they issue coupons. But the dirty little secret of couponing (which I learned almost 20 years ago at Colgate-Palmolive) is that less than half a percent of coupons distributed are actually used. So the couponing budget is relatively modest. Now if you give some a coupon at point of sale, like on his/her mobile phone, and they use it 80% of the time, that can get expensive. And if, God forbid, they were planning on going into the store anyway, well then you've really hurt your margins.

And what about a mobile device as Good Old advertising? Well, given the screen size it will have to be creative. My view - there will be some smart agencies and advertisers that will come up with some great success stories, probably by figuring out how to integrate communications such as messaging into the "advertisement", but overall I "Dare" anyone to get rich from Mobile Advertising.