• by Laurie Sullivan , Staff Writer, September 23, 2009

I have mixed thoughts about being targeted ads on my mobile phone. While I'm the first to admit my love for technology, and that my AT&T BlackBerry goes wherever I do, I'm a little sensitive to ad targeting, especially when Neiman Marcus serves up an ad to me somewhere across the Web after I've abandoned the shopping cart on their site. (As far as I can tell, they seem to be the only retail store following me.) So, how would you feel if an ad for a store you frequented online was served up on your mobile phone browser?

Microsoft last week began offering behavioral targeting for ads running on its mobile network. But while the service offers a range of online targeted categories -- about 100 --to advertisers buying mobile display inventory, the launch really means so much more.

Jamie Wells, Microsoft's global director of trade marketing, mobile advertising solutions, says the targeting cuts across the Web, mobile and Xbox platforms when consumers sign into their Windows Live account. It allows media buyers to purchase consumer profiles demonstrating interest in specific categories, as well as specific times in a purchase funnel.

The technology doesn't rely on cookies, but rather the user's Windows Live ID. Cookies present a challenge on the Web, but even more so on mobile. Sometimes telecommunication carriers either strip out cookies or don't accept them from third-party companies. So, rather than use cookies, Microsoft relies on behavioral profiles associated with Hotmail email and Xbox accounts through Windows Live ID. When a person on a mobile phone uses that same ID, Microsoft can link the behavior on the Web with behavior on their mobile phone and Xbox.

Although tight-lipped on Microsoft's strategy, Wells admits "this is just the beginning." Microsoft plans to expand its approach to tie together the Web, mobile and Xbox, drawing on the power of the entire Microsoft network. The strategy will integrate the audience, he says.

"The mobile application addresses one of the biggest challenges, which is targeting," Wells says. "This is a way to circumvent the cookie problem and use online profiles. Also, some folks would argue that there's a much higher bar for ad relevancy on mobile, and BT speaks right to that."

Wells didn't disclose the cost for the service, but Patrick Moorhead, who oversees research and development on behalf of Razorfish's Advanced Marketing Solutions group, revealed to eMarketer that an eight-week campaign for mobile media can run between $250,000 and $300,000. In the interview, he says the investment offers substantial reach and allows for specific targeting.

Yahoo in May opened its Smart Ad platform to third-party companies to bring behavioral targeting services to its mobile network.