NeoMedia Technologies, Inc (NEOM)

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DD Are you ready for cell phone ads?

Bob Keefe
Cox News Service
Sept. 12, 2006 01:00 PM

http://www.azcentral.com/news/articles/0912cell-ads12-ON.html


LOS ANGELES - Get ready for exciting new services on your cell phone - but first, a word from our sponsor.

Sprint Nextel is expected to announce at an industry conference here this week that it is teaming up with new media advertising house Enpocket to deliver short commercials and other ads on Sprint phones.

Users probably won't be subjected to the ads, which might appear as anything from a tiny banner to a full-screen video clip, when they just make voice calls or send instant messages.
But download a ring tone, and it might come with an ad for a forthcoming TV show. Use a Sprint city guide or map service, and you might also get an ad for a local hotel or restaurant.

As cell phones increasingly add sophisticated features like Web browsing and online gaming, the ads will grow more common, experts say. And they also expect Sprint's competitors to adopt the practice.

While ads on cell phones aren't unknown today, they're typically connected to outside third-party Web sites and not controlled by cell companies themselves.

Go to weather.com with an Internet-ready phone, for instance, and you might see an Exxon Mobil link that you can click to get help finding their nearest gas station. Only visitors to that Web site see the ad, though, and weather.com controls it and profits from it, not the cell phone company.

The Sprint deal could change all that. The new ads could reach every user who accesses Sprint's Web services.

Julie Ask, senior analyst at high-tech research firm JupiterResearch/Kagan, said it the move would be the first for a cell company in the United States. But if Sprint is successful, she said, other cell companies will likely follow.

"It's significant," she said. "There's a lot of pent-up demand" for this sort of advertising.

For Sprint and other cell companies, advertising is a fine line. The profit potential may be huge, but they also have to be careful not to alienate customers who think they shouldn't be subjected to ads on a service for which they pay a monthly fee.

"Ultimately when something lands on your handset, you hold your carrier responsible," said Jay Emmet, president of mBlox, a mobile business consulting firm. TV viewers probably wouldn't call their TV manufacturer or even their cable provider to complain about an intrusive ad, Emmet said. But they might call Sprint or Cingular or Verizon.

Sprint officials have yet to disclose details about the new planned ad service. But in a speech to industry executives here, Paul Reddick, vice president of business development for Sprint, acknowledged the concern.

"We're trying to make sure this is done tastefully and a way that works for entire ecosystem," Reddick said. "There is space for this."

Mobile advertising is in its infancy, but poised for dramatic growth, according to many industry researchers.

Consulting firm Informa Telecoms & Media projects that spending on mobile advertising will reach $1.5 billion next year, double what the firm is predicting for this year.

Within five years, the company estimates, mobile ad sales will hit $11.5 billion - still small compared to spending on television, print media and the Internet ads, but a formidable market nonetheless.

Just a few years ago, mobile advertising was little more than a controversial idea for cell phone companies. But at this week's CTIA cell phone industry conference, ads are among the hottest topics.

Heidi Lehmann, vice president for mobile advertising agency Third Screen Media, said it's clear that mobile ads are coming of age.

Two years ago, Lehmann said, her firm sold six-week mobile advertising spots for about $25,000. Today, she said, the average price for the same amount of time is $200,000. Some mobile advertising campaigns have cost more than $1 million.

"When we started, there really wasn't much awareness" about mobile advertising, Lehmann said. Today, she said, it has become a common part of the advertising plans and budgets of many major brands. Coca-Cola, Ford, Starbucks and other big companies all have used mobile advertising, she and others said.

Right now, the biggest target for mobile advertisers are business travelers who often are tethered to their cell phones.

But in the future, Lehmann and others said, ads will likely increasingly target 18- to 24-year-olds, who in many cases rely on their cell phones even more.



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Ad's on cell phones? What will they think of next? If they reduce the phone bill and improve the service? Maybe. I didn't particularly care for the service I recieved when I was a Sprint customer... Remember we always have choices (Maryann9269, September 13, 2006 02:56PM)
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I would have to go without a cell phone. If everyone could get on the same page they would get the message. AOL, Earthlink, etc. have pop-up eliminatores because of the public outcry. To bad the television networks haven't got the message. When it comes down to it, cell phone providers don't give a rip about the consumer, and it doesn't help to complain because whoever you talk to is as far as it goes. If it's an e-mail complaint, it goes to e-mail hell. (Bill1038, September 13, 2006 11:49AM)
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I'm glad I cancelled my nextel service after all.... I'd be pissed if I got ad's for anything.... But carl is right... the cost of the service isn't going to go down... they are just going to make even more money than they already do... which I think is to much. (Michael2103, September 13, 2006 10:27AM)
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So if Sprint is going to profit from selling advertising does this mean Sprint customers will see a drop in their monthly charges?

I doubt it. (Carl7798, September 13, 2006 09:42AM)
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How in the world is this, or should it be, or even COULD this be "against the law"? Paying for a service IN NO WAY entitles you to "no ads". Cable TV and satellite? You're paying for all of those channels, but you're still watching commercials on most of them.

Please, feel free to vote with your dollars and move to a service not putting ads on its phones. But to suggest that this is, or should in any way be illegal, is just ludicrous. (Kirk4571, September 13, 2006 07:30AM)
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I think it should be against the law, as it is NOT a free service......like public tv.... you have to pay for it and shouldn't have to tolerate that invasion of your time and space.... if I were a Sprint customer they would be dropped like a hot rock....and if my carrier does it,,,, they will be.... that is the only way to send them a message and I hope the purchasing public has the guts to do it.....and not cave... (jkristen (Judith), September 12, 2006 11:30PM)
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Just what the world needs...more ads. How long is it going to be before we have to endure pop-up ads on our cell phones before we can make a call? I don't know about everyone else, but I so unbelievably *sick* of being bombarded with advertising everywhere I go. I understand ads pay for things, but this is just getting ridiculous. Hey, here's a thought, how about city stop lights play commercials for Nike while we sit at red lights? Perhaps we can start printing Sprint ads on toilet paper...? Just think of the untapped markets! (Stacey995, September 12, 2006 04:01PM)
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