• by Shankar Gupta , January 16, 2005

Two advertising firms recently announced their entrance into the mobile device advertising fray, possibly signaling major growth in that sector as a venue for reaching consumers.

On Friday, Laguna Hills, Calif.-based Interchange Corporation launched its new SMS Local wireless search beta, which lets consumers search for products and services via wireless Internet and returns names of nearby businesses. And Rye, N.Y.-based Lake Group Media announced late last month a partnership with the SMS Media Group to send sponsorship ads to cell phone subscribers who have opted-in to receive alerts on their mobile phones.

Tom Burgess, the CEO and founder of ThirdScreen Media, a mobile media-buying firm, said that his firm's clients are increasingly interested in reaching consumers on mobile devices. "From our perspective, things are absolutely on a ramp," he said. "Six months ago we were banging on doors to get meetings at agencies. We were the ones coming to them--now they're coming to us."

Publishers are also increasingly making their content available for mobile Web browsers, Burgess said. "Household names in entertainment, sports, business, are in the process of putting out their mobile content," said Burgess, whose publishing clients include USA Today, MSN, and Weatherbug. "And those are the key categories that advertisers are seeking."

Interchange's beta SMS Local service works nationwide with any SMS-enabled mobile phone or device. It allows customers to send search terms to 56225 ("local" on most phones), and messages them with nearby merchants or service providers. SMS Local is powered by Interchange's proprietary Keyword DNA system, which has indexed 10 million businesses nationwide. For the beta, all businesses are included in the listings. When the product goes live, businesses will be able to purchase paid listings that will be displayed first.

Interchange CEO Heath Clarke said that businesses like mobile advertising because they're always looking to reach customers directly. "Would a business be willing to pay for a lead with a consumer on the phone? The answer is always 'Yes, how do I do it?'" Clarke said. "What we're providing is in line with our mission, which is to allow businesses and consumers to connect anywhere, anytime."

Lake Group's project with SMS Media Group is based on "alerts" that publishers send to consumers via mobile devices. A consumer can sign up to receive headline news, lottery results, snow reports, and shopping alerts. One of SMS Media's clients is Snow Country, which sends users reports on snow accumulations when they're planning to hit the slopes. CNET also does business with the SMS Media, sending out information on price drops for high-tech gadgets. Lake Group plans to line up advertisers to buy space in these alerts, sending subscribers ads up to 40 characters long embedded in the messages.

Burgess warned that one of the dangers of a wireless advertising boom could be the spread of wireless spam. In October 2004, FCC rules went into effect that strictly limited the messages that marketers could send to consumers' mobile phones and PDAs. Before messages can be sent to wireless devices, consumers must opt-in--and they can't be sent unsolicited text messages asking them to opt-in. Some companies, however, are still selling lists of phone numbers for mobile spam, Burgess said.

Fortunately, Burgess said, wireless provider companies can take the lead in preventing wireless spam from bothering consumers too much. "The consumer is protected by an additional layer than they are on the Internet, which is the wireless carrier themselves," he said. "Is mobile spam going to happen? Yeah. But the major protectors are going to be the carriers."