Mobile, ISP Not Ripe For Behavioral Marketing

by Erik Sass, Jul 22, 2008, 7:00 AM

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SAN FRANCISCO -- Behavioral marketing via mobile devices is still a couple of years off, according to panelists speaking at the OMMA Behavioral conference on Monday. Meanwhile, they agreed that ISP-based behavioral targeting is attractive for obvious reasons, but will not be viable in the near future because of privacy concerns.

Delivering targeted ads to mobile devices makes sense for a couple of reasons. First, consumers are increasingly using mobile devices to access the Internet and make online purchases, creating trails of data detailing their Web behaviors. And in theory, mobile devices offer a geographic component for behavioral targeting, according to Elgin Kim, the head of sales, West, for Nokia Interactive. Moreover, Kim said Nokia achieved conversion rates of 40% with ads targeted using behavioral data about people who watched movie trailers on their mobile devices.

But mobile advertising is still in its infancy, and simply does not offer the scalability and capabilities needed to make behavioral marketing profitable, countered other panelists. "I don't know if mobile advertising is even there yet at the basic level, so behavioral is probably a subject for a couple years from now," ventured Chris Hansen, vice president of performance marketing for 360i. Likewise, Keith Pieper, group media director, U.S. Subsidiary, Microsoft, Universal McCann, confided that "we're still trying to get some of our clients to just try mobile advertising, and mobile BT is way, way beyond that."

According to Dag Olav Norem, a senior analyst with M:Metrics speaking at a separate conference hosted by AdInfuse, the United States lags far behind other parts of the world in terms of penetration by mobile marketing. Altogether, just 20% of U.S. mobile users receive an SMS marketing message at least once a month, versus 75% in Europe. Looking to the future, however, Norem said "the trajectories are all headed in the right direction" for the expansion of mobile marketing in the U.S.

Pieper said "the ISP approach was promising, because you had access to every single piece of data that goes through that PC, and what you can do with that is virtually limitless." But privacy concerns effectively shut it down. Likewise, Sankar Patel, associate media director for interactive at Butler, Shine, Stern, and Partners, recalled: "We got really excited about ISP targeting, but then there was talk of Congressional hearings, so we've told all of our clients to hold fast and see how this thing shakes out before we start implementing that into our campaigns."

These concerns echoed remarks by Dave Morgan, the founder and former CEO of Tacoda, who said behavioral marketers have a hard enough time with image management as it is. "Is it legal? Probably. Do I think it's a good idea and it makes sense? No. I don't think it passes the creepy factor, and this market isn't ready for stuff that doesn't pass the creepy factor. We are not in a place where we can do dumb things and stupid things like that, even if they're effective."

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