Here come the ads, over your cellphone

"The primary thing is the notion of privacy," says Subimal Chatterjee, associate professor of marketing at the State University of New York at Binghamton. The ideal way to market with mobile technology, he says, is the scenario in which cellphones give their locations to advertisers, then alert users to local retailers and special discounts.

"But to do that, you have to give somebody permission to track you all the time," Mr. Chatterjee says. "It's a very interesting trade-off – highly customized ads and alerts, but at the same time, you give up your privacy." Consumers will trade some of their privacy, he says, if they feel in control. If a mobile-device user can control when he's being tracked, he may not mind receiving useful ads.

"Can we push ads out to people?" asks Ira Sussman, executive vice president at Initiative Media in New York City. "I think the model for that will be an opt-in: We're not going to be able to ring people's phones to bring you an ad, but if somebody says, 'Tell me if something goes on sale,' or if there's certain information they're willing to get which is sponsored by advertisers – like weather or sports scores – I think they will opt in. It's instant gratification."

Advertisers believe that consumers seeking this kind of gratification will give "situational permission," and agree to be tracked and targeted, say, when they're traveling: Information about flight gate changes or local restaurants in an unfamiliar place could be welcome.

For now, wireless advertising is hampered by a myriad of technology standards among carriers such as AT&T, Verizon, and Sprint, each of which have different specs for their phones. Even if mobile devices could handle complex media images – which they currently can't – advertisers would have to remake each ad to fit different phones.

"This is a very complex technology, and you've got devices that have variation in terms of screen sizes and the technology being used," says Mr. Person. "And then you have the publishers' needs, which require ad standardization or format standardization for the ads in order to ... exchange them and get them done in a reusable way."

In Europe and Asia, where mobile-device technology is uniform, advertising over cellphones is a small but growing industry. Mobile commerce revenues were $15 million in Europe and $500 million in Japan in 2000, compared to only $10 million in the US, according to Jupiter Communications, a New York-based research firm. Because of uniform technology standards and a wider cultural comfort with mobile-phone browsers, analysts forecast most of the growth of m-advertising overseas.

"It may be a fairly small market now, but looking at my kids, I think it's going to be a big market in the future," says Mr. Person.

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