• by Masha Geller , August 15, 2001

Everyone keeps talking about wireless, but the U.S. advertising industry is still largely skeptical about placing any ads on wireless devices. Why? For one, according to the latest eMarketer Wireless report, the U.S. wireless market is only just beginning to find some direction, and is not yet large enough to warrant a shift in ad budgets. That, and there is too much uncertainty about where the wireless industry is really going.

As they have done for other industries in the past, eMarketer analysts recently studied a plethora of forecasts and predictions from several different research companies and found that after most researchers placed last year's wireless ad spending at $0 (only the Yankee Group said advertisers shelled out $7 million), but that there are huge differences in forecasts. Expectations for the value of mobile advertising spending in 2005 range from less than $1 billion to nearly $7 billion.

Wireless ad sellers are naturally optimistic - right now, response rates on wireless ads are outshining banners with 19% CTRs and 12% call-throughs, but eMarketer seems a little skeptical. First, they say, there is a novelty factor that is sure to wear off in the near future. Second, wireless advertising is an opt-in process, so the ads are going to people who want them.

Unfortunately, it looks like people are still not very eager to receiving ads on their phones. eMarketer analysts cited a Strategis Group study, which clearly indicates that the vast majority of mobile phone users are not willing to receive mobile phone ads - a mere 29% of the people surveyed said they were willing to opt in for ads.

Before m-advertising has a chance, eMarketer says, there are a number of issues that must be resolved, including: * - New mobile interfaces, standards and devices need to be further developed. * - Privacy and data protection issues need to be addressed. * - Consumers need to accept it. * - Wireless ad standards, in terms of form and pricing, need to be settled.

The long and short of it is, there's not much going on in the U.S. mobile advertising market right now, but there's great potential for the future. And if the spread of wireless overseas is any indication, we better solve the above problems as soon as possible.