NO ONE is going to pay .05-.15 per click on a cell phone.....NO ONE!!! Those are fantasy numbers IMO.
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No cell-phone user would have to... Sort of. See, SMS is/was a novelty at first and everyone who used it paid additionally for it. Now it is included in the plan to some extent and subsidized by the carrier because it is something that everyone offers. The "new" addition to cell plans is "data". Not text data but network data. Data can be very basic (ring-tones) or it can be very complex (URL's aka World Wide Web) The pretense behind data is interactivity with a non cellular device (computer server, etc) but it is data never the less. Lets think of the Cell carriers as Networks like television (ABC NBC CBS etc). When we allow data to be pumped through our handsets, we generate the request and the network generates the response. We read our request and respond accordingly. Now, the cell carriers are aware that they have a captive audience but they don't want to inundate us with content because they would clog their own arteries. (They don't have enough bandwidth to handle all of the users making a phone call at once, let alone making a data request) so they require the user to make the request. Good for us but bad for the advertisers. (no spam). This is where something like Qode would get interesting, though. Qode would ad a level of functionality (like SMS did in its novelty stages) to existing handsets. Advertisers would have to pay for the privilege of replying to your request by paying for the click through. Now that might seem a little weird but it is far from far fetched. Advertisers spend millions of dollars to "carpet bomb" a campaign to as many readers/viewers/listeners as they possibly can in order to illicit a response from a lousy 2 percent of the demographic. The millions that they spend is the subsidy allowed as a percentage of the profit margin for marketing. The advertiser/manufacturer expects to sell millions of widgets in order to make money and they have a break even point in all campaigns. The break even point is the point in which they exceed the cost of design, production, promotion, packaging and delivery of a product. From there they are into net profit. Since they are talking about millions of a product the cost associated with the above mentioned can be very high with little return. So, given the opportunity to pay a nickel or dime to the carrier to directly respond to a potential buyer who initiates the request, the advertiser is more than happy to do so. If the advertiser can pre-qualify the demographic he will eliminate a large portion of the wasted advertising dollars that go unnoticed and by default raise profit margins. If the user initiates a second click by requesting more information then the advertiser pays a second installment toward the ultimate reward (the sale) by sending additional information. Now the advertiser has a choice of sweetening the pot by offering a one time instant rebate or coupon to close the deal. By doing this the advertiser pays an additional fee to the carrier. Finally, the advertiser is rewarded by completing the transaction and delivering the product. It cost the advertiser 20 cents but it was well worth it because the advertiser just made an additional 20 or 30 dollars.
The bottom line is that interactive marketing is highly profitable because it cuts down on the amount of blanket advertising that has to be done in order to reach a specific demographic. The marketing world will evolve with Physical World Advertising much like the cell phone itself. Instead of being a clunky, brick-like object that cost a fortune to operate, it has evolved into a multi-functional device that can interact with networks of computers seamlessly. The beauty is that the device is mobile and the advertising is somewhat static. High traffic areas will soon become prime real estate and advertisers will pay a premium for one ad but that is ok. They will no longer have to carpet bomb an entire demographic to garner the attention they desire. Once interactive ads catch on people will know to look for them and they will become more and more discriminate when they think about clicking on something. Advertisers won't mind, though. They will have cut their advertising budgets by more than half and increased their profit margins dramatically. the 5 cents that they pay for each initiated response will be a bargain and they will gladly pay it.
Now ask yourself a question. Would you rather go through life with an additional information button in your pocket or would you rather go through life having to read everything to get the information that you need. Additionally, would you be willing to fork out a penny for each time that you could cut out the middle man and talk directly with the manufacturer of any product? If the answer is yes, then you just added 20% to the bottom line of the advertisers thereby increasing their direct budget. It may cost you a buck or two a month in clicks but you will exceed that sum greatly in the cost savings should you purchase the product. The facilitator will get paid per click and the consumer will reap the benefits in the form of cost savings. Why would you charge a penny for the service, you ask? The answer is simple. If you have to pay for it, it is not free and if it is not free then it has an implied value even if it is worthless. Today's standard of coupons is like fishing. They are bait to get you interested in negotiating a price. You don't know what something costs but you do know how much you are going to save. If the informational part of a transaction gives the real world price, the on-line price and the discounted on-line price via an instant coupon then the negotiation becomes personally customized to the individual. The savings are more than implied, they are real but only if you click the fourth time. Cost savings to the consumer are more than real world but cost savings to the advertiser are much higher because they eliminated 98 percent of the waste in advertising. You can fill in your own numbers here but any numbers are going to look good for everyone involved, including the carriers who charge up to a quarter per transaction.
You got me on the 5 million pennies thing, I missed a couple of decimals thinking too far ahead but I hope you get the idea that I am trying to convey here. People will pay for a couple of clicks, just like they will pay for TV, Internet, Cell phone plans, Text messaging, etc as long as they get to choose who they interact with. Call it selective advertising. The cell companies invest their portion to widen the bandwidth to accommodate more customers and the advertisers pay for the usage. I don't know the actual ratios of the split of costs but I do know that the consumer will pay a little for the service at first (either in the form of a package or subsidy) and eventually when the infrastructure can handle it nothing at all. IMO
htj
AI
