• by Michael Drexler , September 10, 2001

Let me first mention that besides a so-called "shortage" of spectrum space for wireless communications, I am not "irrationally exuberant" over the state of wireless as an advertising medium in this country. Predictions that range from $1 billion to $17 billion in wireless ad spending by 2005 to me are pure speculation -- not even educated guesses. While I am not pessimistic either, I do believe it will be some time before advertisers seriously embrace wireless Interactive applications in the U.S.

To begin with, most of the research I've seen seems to suggest that a great number of people in this country have actually expressed objection to advertising on their wireless devices and many are not feeling compelled to access the Internet via wireless either. I'm not suggesting that small screens and slow service are the sole reasons for a lack of interest in Web enabled wireless devices, but clearly they are not encouraging factors. Always-on service and content unique to small displays on wireless devices will eventually help. And, while people often say things they don't really do until they've actually had the experience, the fact is that right now, most mobile phone users feel they really don't know very much about wireless Internet technology.

Another statistic beginning to show up among users of wireless devices is that mobile transactions account for a relatively small percentage of on-line shopping and this could very well remain true even though a significant number of people will subscribe to a wireless web service over the next 5 years. Consumers, at least prior to an actual experience, just don't seem to be interested enough. Maybe if it is a time critical purchase or location sensitive, their motivation will increase. But that, of course, remains to be seen. Will text messaging and text-enhanced voice services be favored activities? Probably. At the outset, I expect that instant messaging, email, accessing critical news and information and location sensitivity will be the preferred motivators. And, businesses will add customer value by providing product news, information and automated alerts. As all of this begins to play out, advertising too will begin to play an important role. But there is still not enough of a market out there, and advertiser interest is indeed quite small.

Until the wireless web reaches critical mass there will be very little shift in advertising budgets toward the medium. And, when it does occur, a rather large percentage of ad dollars will, in my opinion, be mostly local advertising to capitalize on situational targeting and proximity of the consumer. As in any media environment advertising follows audiences. But, what is just as important is that wireless advertising must have established standards and adequate measurement to provide accountability. And, it is here perhaps, where the wireless medium has even further to go.

First of course, is the issue of competing technologies. Not only within the wireless medium but also the fact that online sites must recode for WAP technology which is mostly being done today by the bigger sites. Then there is the concern of measurement standards and definitions. The Wireless Advertising Association is doing a good job of identifying and defining the issues at hand. Metric definitions, back-end tracking methods, and studying ad effectiveness are absolutely essential for advertisers and agencies. While some third party ad servers are beginning to develop ways to centralize wireless ad management and serving, currently to my knowledge there are no fully developed tracking systems that offer post-click and post-impression back-end data. Creative standards and ad formats must also be defined. Screen size on both wireless phones and P.D.A.'s is a big factor that both text and graphics must deal with. Ad delivery definitions and methodology are also critical. And we must also determine how pricing methods will be established. Flat rates, cost-per-click, CPM, etc. provide flexibility and hybrid pricing, but completely erratic, non-comparable models are both confusing and inhibiting and need to be clarified.

In the final analysis, the wireless medium, like any other new medium, should have an independent auditing system particularly when other measurement services are not in place. Advertisers and agencies will not accept numbers without acceptable methods of verification to support their delivery. When online auditing began, organizations like ABC, BPA and later, IPRO were necessary. They were pushed aside to some extent as the online medium became an impression based buy/sell economy. Consequently, third-party ad servers became the basis for advertiser proof of performance so several online sites felt little need to sign up for other auditing methods. But new sites, particularly those on the wireless web, do need auditing of traffic and unique visitors.

In the future, I believe that we will have an audience-based system that will go beyond impressions and we will need to count and audit the number of people that visit a site. To this end, we must know how many people are using the wireless web and who they are before advertisers entrust their budgets to this new medium.

- Michael D. Drexler is Executive VP at Mediasmith, Inc. an integrated Interactive Media planning and buying company. During his 41 years in advertising he has been Media Director of Ogilvy, DDB and FCB as well as Chairman of TN Media.