June 26th, 2007

Consumers Not Gaga for Mobile Ads

By Brian Morrissey

While advertisers are giddy at the prospect of placing ads on cellphones, many consumers are wary of the prospect.

A Harris Interactive survey found consumers ambivalent to the idea of ad-supported content and services on their cellphones. When asked of the different forms of cellphone advertising, from text links tied to search results to a promo ad when turning on the phone, the overwhelming majority of respondents found them “not acceptable at all.”

The Internet’s most successful form of advertising to date, search links, was the most popular, with 33 percent finding them “somewhat” or “very” acceptable. A video clip appearing from a retail store nearby did not go over as well: 84 percent said the tactic was unacceptable. Other forms Harris asked about included text messages from companies, voice mail messages from a celebrity or spokesperson and audio ads that play while a call is connected.

The Harris Interactive survey, commissioned for pay-per-call ad service Ingenio, asked 4,000 U.S. adults about their cellphone habits.

Mobile is thought to be the next frontier of digital advertising, often called the “third screen” behind TV and the computer. ABI Research anticipates $3 billion will be spent on mobile ads this year, rising to $19 billion in 2011. Internet giants like Microsoft, Google and Yahoo! have entered the field, while the introduction of the iPhone on Friday is predicted by many to be a watershed moment.

Despite the excitement surrounding mobile advertising’s future, few respondents have encountered it in the here and now. Just 30 percent said they had seen or heard ads on their phones. Less than half use their cellphones for more than calling.

“The reality is that when people are confronted with the idea of advertising on the mobile phone in the abstract, they don’t like it,” said Greg Sterling, principal of Sterling Market Intelligence. “When presented with relevant advertising when they’re looking for something, they’re much more accepting in practice.”

That is probably the result of a majority of cellphone users in the U.S. using their phones solely for calling. Of those using them for more, text messaging was the most popular (39 percent) while advanced activities were few and far between. For example, just 9 percent said they check e-mail through their phone, 7 percent use a Web search engine and 15 percent play games.

Many cellphone users expect to use their phones for more purposes in the near future. While just 9 percent use their phone to check e-mail, 20 percent expect to do so in the next three years. Similarly, search use goes from 7 percent to 22 percent.

Sterling believes the key to making advertising acceptable in these contexts is relevance. The bar is even higher on the cellphone, he said, citing the 63 percent who said the cellphone is “very personal.”

“People want offers, they want advertising content in certain situations,” he said. “[But] it’s perceived to be more intrusive on the cellphone.”


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