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GPS to do wonders for wireless browsing
(IDG) -- In early May, the U.S. military did people a favor: It stopped scrambling the signal from its global positioning system, allowing private citizens and companies for the first time to take advantage of the precise satellite technology. Previously, the GPS feed was comparatively imprecise and could be off by 100 yards or more. The unscrambled GPS signal can pinpoint whether a person wandering Times Square is about to enter the Disney Store or the Flashdancers down the block.
The new feed has already got some industries buzzing. First among them is the auto industry, which, as one might expect, wants to sell GPS mapping as a bonus to drivers. Also interested are outdoor sporting companies, which will market GPS to campers and sailors. However, there's a less obvious industry eager to capitalize on the technology: advertising, which could use GPS to target consumers with a precision never before seen.
"It's a bit of a marketer's wet dream," says Kyle Shannon, cofounder of Agency.com, an Internet marketing consulting firm. The idea, Shannon says, is that "someone who uses a [wireless] data network is going to respond to an ad that gives him a coupon to buy a Coke from a machine as he walks by it."
Shannon's example is more pipe dream than reality; wireless content delivery is in its infancy in this country. But there's no question that it is poised to become the next big Internet platform. Wireless devices such as mobile phones, personal digital assistant gadgets and souped-up pagers like the Blackberry are taking off. And that means advertising will quickly adapt, geared to the different dynamics of a wireless world.
All told, companies are expected to spend as much as $2.9 billion on wireless advertising in the U.S. by 2004, according to Ovum, a technology consulting firm. That's currently less than advertising on the Internet (in 1999, that was about $3.3 billion, according to Forrester Research). And it's just a slice of the $24 billion in Internet advertising projected by 2003.
But if wireless advertising is barely off the ground in the U.S., it's taking flight in Asia and Europe, where countries are years ahead of the U.S. in wireless phone and Internet device use. In Japan, for instance, I-mode, a wireless Internet service from phone giant NTT, has more than 6 million subscribers, with 25,000 more joining each day. I-mode has drawn advertisers such as Tokyo department store Kei-Qyu, which advertises special discounts to elite customers via their cell phones.
In Europe, likewise, a more highly developed wireless market is proving to be a testing ground for advertising, with U.S. agencies leading the way. New York-based 24/7 has run 15 limited wireless campaigns - trials intended to reach 10,000 or so consumers - for European clients, including KPN, a Dutch telecom; Football365, a London-based sports portal; and DressMart, a Swedish online clothing store.
And Agency.com is working with London-based Carphone Warehouse, the largest European wholesaler of mobile phones, to create a customizable wireless portal that delivers weather forecasts, local news and e-commerce services to wireless subscribers.
Examples of wireless advertising in the U.S., though, are harder to find. Intraware, an Orinda, Calif.-based company, is an early innovator; it uses AvantGo, a content distributor to wireless devices, to solicit 500,000 technology professionals on their PDAs. (The target group was selected based on information people gave when they registered for the AvantGo service.)
When the target audience members fired up their Palm devices, they were greeted with a simple text-and-graphics message, which described Intraware's online software sales and services and asked them to submit their e-mail address for more information.
Vindigo, another pioneer, already has plans for GPS-based advertising. The company distributes city guide information to handheld devices, providing tips on where to eat and the best places to be seen. Currently, Vindigo users download information from the company's Web site while their handheld device is attached to a PC. When the software program is used to locate a nearby restaurant or store, a small ad appears at the bottom of the screen for another establishment. In the wireless future, the download will be taken out of the process, and positioning satellites can direct a hungry diner to the nearest bistro as well as pitch them on another trattoria just around the corner.
That high-precision targeting is central to the promise of wireless advertising. But it's also what makes it rather creepy from a consumer's perspective.
"One end of the scenario is that as you're walking down the block, your phone goes off as you pass every store and tells you that there's a 50-percent-off sale," says Bruce Mello, vice president of wireless and emerging media at 24/7. "For me, by the end of that one block I might be breaking my phone."
He's not the only skeptic. Mobile-phone service providers such as AT&T are wary of allowing advertisers onto their networks, for fear it would be intrusive to customers. That fear is more than imagined: About a month ago, AT&T detected a spam attack of text-messages sent to more than 5,000 of its mobile subscribers. The company quickly shut the messages down before they reached all of the intended recipients, says spokesman Ritch Blasi. AT&T has implemented safeguards to prevent more attacks.
Then there are the limitations of the technology. For years, the U.S. market has lacked a standard technology for translating Internet data to information that can be displayed over wireless devices - holding back advertising along the way. The industry has now adapted the Wireless Application Protocol, or WAP, enabling companies to distribute Internet-ready information to wireless devices equipped to receive it. WAP-ready devices are now starting to debut in the U.S., but the industry still lacks a standard way to distribute advertisements across all devices in one fell swoop.
For advertising to flourish in a wireless environment, finding those standards that will enable firms to reach massive audiences is perhaps more important than making use of intensely accurate targeting.
Indeed, for all the potential of GPS pinpointing, if consumers are turned off by having advertisers track their every move - as they've recently demonstrated online - geographically targeted advertising may not be the most promising way to pump up the wireless market. But for all the questions, advertising firms are still eager to start testing the waters.
"Is this an effective medium for advertising? As much as everyone's jumping on the wireless bandwagon, the opportunities are limited," says Lot21's Everett-Thorp.
But then, she adds, "These are the same questions we were asking about the Internet five years ago."
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