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Mobile commerce

CTIA 2011: Operators Tread Lightly With Opt-In Ads

ORLANDO, Fla. -- International CTIA WIRELESS 2011 -- What do you get when you combine two of the hottest mobile buzzwords, location-based services and advertising? The mobile marketing holy grail of location-based advertising. It's an opportunity that wireless operators are beginning to tap into, but they're treading carefully.

The skepticism, indeed, is as high as the hype. You can see from the headlines describing "coupons that stalk you" and "a coming nightmare" of ad overload that consumers don't trust brands to treat their most personal device with care.

As a result, the consensus is that opt-in is the only way to go.

"Opt-in secures the consumers' permission and gives brands access to customers that want to engage with brands and are receptive to the offers being sent," Maria Mandel, VP of Media & Marketing Innovation at AT&T Inc. (NYSE: T)'s ad solutions group, writes in an email to LR Mobile.

Opt-in also keeps customers from crying foul, which is the primary reason most are going this route. AT&T recently announced a location-based ad trial, ShopAlerts, with Placecast that is strictly opt-in and shoots off an SMS coupon or promotion once a user crosses into a participating brand's geo-fenced location. (See AT&T Intros Mobile Location-Based Ads.)

The carrier's trial is similar in scope to what Alcatel-Lucent (NYSE: ALU) offers through its Optism ad platform, in use by Mobinil , Tigo, Etisalat and Orange Austria Telecommunication GmbH. (See AlcaLu Targets Egypt With Mobile Ads .)

Alcatel-Lucent isn't working with AT&T on its trial, but Thomas Labarthe, Optism general manager, had primarily positive adjectives to describe it: "The example of AT&T is interesting. It's a bold move. It's courageous. It's cool ... provided they do it well in their proposal to subscribers."

Labarthe's last qualifier summarizes what most are thinking -- the service could add a lot of value, but it all hangs in the execution. Opt-in gives AT&T the right to ping consumers as often as it likes, but it will have to strike a careful balance between enough texts to make sure consumers remember the campaign and not so many that it annoys them.

Opt-in options
Because scrutiny around privacy is high, Labarthe says users should not only opt-in rather than out, but they should also be able to select precisely the topics they want to be targeted on, how often and where, he says. Walking by a large shopping mall shouldn't cause a bombardment of "targeted" ads.

"There is a very important element in being able to manage end-user preferences in such a proposal so you are selective and watch the frequency of what's being sent," Labarthe says.

AT&T's Mandel says that the mass adoption and use of text messaging, plus consumers' interest in receiving offers, makes now the perfect time to trial a service. She expects mobile marketing and LBS services to drive significant revenue for AT&T, but she's not offering up actual figures.

One reason she's keeping quiet is that the risk with opt-in is that no one does. Labarthe suggests operators use SMS to form a dialogue with the end user. Start the campaign by asking a question. If, and only if, there's a response, deliver a message that's more targeted because it takes into account the interest of the subscriber.

For a brand like McDonald's, for example, this could mean sending a campaign around lunchtime asking what they plan to eat today. If they answer, Mickey D should then MMS a picture of the menu, along with a discount and map of the nearest location. It doesn't necessarily require a geofence, but it takes location into account within the bounds of opt-in.

"When you're using messaging in an intelligent way, you are not spamming people," Labarthe says. "Doing it based on end-user permission and preference and getting creative with dialogue and rich media, we believe makes [SMS] the most efficient channel on mobile."

[Programming Note: Mobile advertising will be attracting more buzz at CTIA next week, with a pre-conference dedicated to mobile marketing, and 44 companies exhibiting under the umbrella of mobile marketing and advertising. Check back next week to our dedicated Show Site for more on this topic and others, live from CTIA.]

— Sarah Reedy, Senior Reporter, Light Reading Mobile

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