Behavioral Targeting Goes Mobile

Sprint Nextel Sells Ads on Opening Screen to Mobile Web

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SAN FRANCISCO (AdAge.com) -- In September Sprint Nextel said it would help marketers target ads for its mobile web pages by gender or region, for example. Now the nation's wireless-service providers are getting ready to roll out a new targeting tool for marketers that will identify consumers not only by demographics but by their behavior. And that has some worried about privacy.
Sprint and other mobile compnaies plan to provide customized ad buys that will deliver very specific demographic, geographic or psychographic groups.
Sprint and other mobile compnaies plan to provide customized ad buys that will deliver very specific demographic, geographic or psychographic groups.

The 'deck'
About a dozen marketers, including the Navy, AOL and Major League Baseball, have signed up to experiment with Sprint Nextel's offer of ad placement on its "deck," the landing page for customers accessing the internet from cellphones. The deck lists websites that users can click to.

While cellphone subscribers to web services can access those "off deck" web page, where advertising is more common but could require many clicks of the keypad to view, analysts have said the great majority of mobile web traffic sticks to the sites on a carrier's main deck.

Mobile carriers had balked at opening up their decks to marketing messages, but with fierce competition driving down carriers' revenue due to offers of buckets of free minutes and popular "all you can eat" flat-fee data-service plans, carriers are looking to advertising to provide a new income stream. The idea is to lure marketers with a more targeted buy than is offered by competing off-deck content.

'Difference is targeting'
"The big difference is targeting -- that's the key value proposition we bring to the [marketer's] brand," said John Styers, general manager-mobile advertising, Sprint. "We're collecting a bunch of data on the consumers, not only on the demographic side but their behavior within the click stream to get a better idea of the targeting -- what type of individual they are, so that the ads can be targeted to a specific segment. Then we're offering those segments as the categories by which the brands can market their products."

Sprint Nextel and other carriers that have not officially announced the opening of their decks to advertising say they will follow strict government regulations that prevent revealing information about individual consumers. Still, Sprint and the others plan to provide customized buys that will deliver very specific demographic, geographic or psychographic groups.

"We take the insertion order or the campaign, go behind the green curtain, run it through the filters they've requested, then serve it to those subscribers, then come back out of the green curtain with a report: Here's how many were served, here's what click rates were," Mr. Styers said.

'The right balance'
The filtering has the potential to be unusually well-defined. "The problem a lot of people run into on this is you can get to such enormous granularity that you have a segment of one person," Mr. Styers said. "Well, that's not a lot of reach for a marketer. You have to find the right balance between breadth and exposure of the reach."

Some of the Sprint experiments have involved banner ads that allow cellphone users to click to call; click to another wireless website; or click to another ad at the bottom of the page, among other things, he said. The Navy did a popular click-to-video ad targeted to its young male demographic. The MLB used its ads to drive subscribers in certain regions to playoff games, Mr. Styers said.

Each campaign is being sold based on number of impressions in a traditional cost-per-thousand model, with the goal of developing a rate card within the next few weeks, Mr. Styers said. However, he declined to go into specific CPM rates for the experimental campaigns, saying each campaign is "unique," but added that "$100-plus" is what the industry is talking about for pre- and post-roll mobile video ads.

In some cases, Sprint also is negotiating with content providers for Sprint's TV service, "so there's give and take there ... it all becomes a different form of currency," Mr. Styers said.

Far beyond traditional targeting
The nation's top two carriers, Cingular Wireless and Verizon Wireless, have yet to announce plans for their ad-sales offerings. Richard Williams, Verizon Wireless' director-programming, said the options go far beyond traditional targeting. For example, instead of buying an ad in a sports magazine or a TV spot on a ballgame to reach young males, marketers will be able to target them by time of day, types of high-end phones they use, or location.

Marc Lefar, chief marketing officer at Cingular Wireless, said ad-supported models can work on the mobile phone. "Certainly advertisers would love to have better targeting than what might be available in traditional broadcast vehicles," he said, adding: "It would not be a far reach in aggregate, instead of women 18 to 49, to have smaller age groups, a range on household income, to aggregate that and sell that as a CPM to an advertiser."

But, he cautioned, "you have to be very careful about privacy issues. The question becomes: What will customers be willing to accept and what do they need to receive in terms of value to accept them?" Marketers also must find value in the cellphone advertising, he said. "If they don't find value in it, it's going to die a quick and ugly death."

New research on privacy
Some new research backs Mr. Lefar's concerns. Fareena Sultan, assistant professor-marketing group, College of Business Administration, Northeastern University, Boston, said her studies have found privacy is "huge and top-of-mind" with cellphone users, particularly women and the over-30 crowd. "The brand has to become an advocate for the consumer," she said.

Jon Raj, VP-advertising and emerging media platforms, Visa, who has done a click-to-call mobile promotion on USA Today's and Sportline's off-deck websites, said buying carrier-targeted ads has "exciting" potential, particularly for highly customized buys. However, marketers need to avoid becoming "overzealous" and getting stuck in a bad deal with a big price tag, he added.
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