SAN FRANCISCO (AdAge.com) -- If you brand it, they will buy. That's the hope of Finnish handset maker Nokia, which is hoping mobile devices wrapped in a corporate logos will appeal to U.S. consumers.
For an undisclosed fee, the world's biggest cellphone maker is offering advertisers the right to brand the mobile handset. Advertisers choose a Nokia phone that complements their demographic target, splash the handsets and the accessories with their visual identities, embed some mobile content into it and wrap it all up in packaging plastered with their logo.
The program, set to launch in the U.S. in the second half of 2009, comes from Nokia Interactive, the cellphone maker's ad-selling arm. Nokia's ability to preload content on the advertisers' behalf is the linchpin of its custom-device strategy -- the prize for the consumer is, presumably, access to that original content. Brands may also subsidize the cost of a handset.
The idea is for brands to put "content in the hands of the most potent brand advocates -- people who like the brand ... so much that they want to be seen with it," said David Kohl, Nokia interactive head of sales-Americas.
The 18-month-old program has seen some early success in its initial testing ground in Brazil, but a U.S. launch would certainly require some tweaking. When it arrives, the program will test how far consumers here are willing to go to interact with brands -- and experts say value and relevance are the operative keys.
"If you ask advertisers, 'Would you like to brand a phone?' I think it'd be difficult to find one who says no. The question is: Is this something that's got enough value for consumers to change from the phone they already have?" said Maria Mandel, Ogilvy's executive director-digital innovation. She said this program would appeal to brands that want to reach a select, targeted audience, build buzz or create a loyalty tool.
In Brazil, the branded phones are priced between $70 and $200 and sold through retailers that market them with in-store promotions and co-op advertising programs involving Nokia.
One of the program's best-selling phones belongs to Unilever's Seda personal-care brand, which used a limited-edition pink Nokia phone to refresh its brand and launch a teen shampoo line. The $100 device, which came bundled with games, trial-size shampoos and exclusive music by a popular Brazilian band, sold out within two months; it eventually sold 200,000 units between April and December, according to Nokia.
Unilever media director Maria-Luisa Lopez said Seda tapped into branded handsets to get closer to its customers, and plans to brand more Nokia phones in the future. "The project ... was one of the ways to increase relevance to our consumers -- being with them, speaking their language, with the colors, sounds and shapes they love the most," Ms. Lopez said. Nokia says the branded-handset program is profitable and that it has sold millions of the branded devices.
But Brazil's mobile economics favor the program's success in ways that the U.S. may not. There, consumers pay dearly for mobile internet access and content (songs cost $3 a pop), but stateside content is cheap or free and rarely the top reason to purchase a handset.
Distribution could also be a challenge. Brazilians, who overwhelmingly prepay for their mobile talk time, can buy handsets without carrier oversight, but in the U.S., people typically buy phones through carriers, who subsidize the handsets in exchange for signing a service contract. In fact, experts say Disney and ESPN's attempts to sell branded handsets earlier this decade went nowhere because they lacked wide distribution. Nokia said it is in talks with T-Mobile and AT&T regarding distribution of the branded sets.
Ultimately, the program's success will likely come down to what consumers get in exchange for carrying a brand-plastered handset. In the U.S., the branded phones will cost the same or cheaper than the unbranded one of the same model.
"I'm not sure if consumers would want their mobile experience to be a commercial-advertising experience," said Mike Slusar, a former AT&T executive who now consults on brand management and licensing. "Their preference is to brand their own phones."
As Forrester research analyst Charles Golvin pointed out, consumers are savvy: "If they're being co-opted as a brand spokesman, they expect some compensation in the way of increased subsidies."
While Nokia's program has the attention of retail, entertainment and package-goods advertisers, not everyone is into it. For example, said Mr. Kohl, automakers are still scratching their heads: "It's not clicking with them to the same degree as it is with a Coke."
For now, entertainment companies are among Nokia's low-hanging fruit because they view mobile as a key promotional channel for their movies and music. Mr. Kohl said Nokia is working on possible joint partnerships, including one that marries a cable network with a fashion retailer.