Strategy for Information Markets/Cellular phone advertising

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Cell phone advertising is the ability for organizations and individuals to advertise their product or service over mobile phone devices. Cell phone advertising is generally carried out as text messages or applications. The ability to advertise over cell phones involves several characteristics centering on the cell phone being a personal device and how the cell phone is close to the owner or user throughout the day. As cell phone use continues to grow, marketers may see a rise in value of advertising through cell phones. However, there are certain security risks to cell phone advertising that deal with privacy, spam, and malware. Cell phone advertising is considered to be the next big thing (Reedy) [1], and is still a relatively untapped market with great potential. Advertisers are closely watching the mobile phone user segment. As the internet and cell phone networks become more and more integrated, the market for messaging on an almost zero marginal cost is unprecedented.

There are a few reasons that marketers think cell phone advertising could be more successful than the other conventional forms of advertising:

  • One's cell phone is arguably always with them
  • The advertisements can be personalized
  • The advertisements are small, yet effective

For these reasons, many advertisers say that an advertisement on a cell phone is more likely to get a response from the user than any other form of advertising.

Cell phone advertising can take many forms, but the two primary methods of communication between advertisers and cell phone users are:

  • through text message, and
  • through the applications on smart phones.
Cell phone advertisements may also provide the same benefits to advertisers as internet advertisement: The ability for the customer to interact directly with the advertisement.

New Ways to Reach Customers[edit | edit source]

As the decade has rolled on, the cell phone has become as much as a marketing device as it has a convenience. We have seen companies pour countless amounts of money into research to try and discover new ways to reach their target audience. As phones have become "smarter," so have the ideas of the researchers in how to succeed in accomplishing this goal. With the increase of cell phone personalization, research companies have created new demographics of the same old population, hoping to efficiently raise brand awareness.

Idle Screen Advertising

Idle Screen Advertising is a relatively new wave of advertising that is being seen in the cell phone market. Through a third party, one is offered a discount on their phone bill in exchange for the agreement to allow advertisements to run on their screen while their phone is idle. Right away, this segments users who enter into this agreement into their own demographic of most likely lower-to-middle class. One would assume that someone who is well-off would not deem the minor discount worth the minor "nuisance." Advertising firms are able to use this to help in their pitch to companies, as it clearly maps out a given target audience. In June of 2010 Alex Hultgren, who manages digital media planning and budgets at Ford, was interviewed by Tobi Elkin on the analysis of Ford's recently implemented idle-screen advertising strategy. As he explains, the results were very promising:

"Across the board, both with the target audience and the control group, we saw lifts in brand awareness, intent to visit the mobile site and purchase consideration. We saw double-digit increases in the four measures we were interested in: aided brand awareness, mobile ad awareness, purchase consideration and mobile site visitation intent, which is among people who saw the idle-screen ad, how likely were they to visit the Ford Taurus mobile site. Overall, we found that aided brand awareness was higher using the idle-screen ad than using standard mobile banners. The other key metric was for the idle unit. Specifically, we had a 20% click-through rate on it. So one in five people who saw the ad clicked through it" [2]

The notable part of this type of advertising is the non-using aspect. In this case, we are seeing that one in five people click onto a cell phone advertisement who weren't using their cellphone. The "caught your eye" nature of this advertising is the same marketing scheme that created billboards, so maybe it is not so new after all. These numbers may not be 100% accurate, as one can only assume that accidental clicks and such occur. The numbers are impressive nevertheless.

Google for Advertisers: Mobile Advertising

As we see smartphones such as the IPhone, Blackberry, and Android start to dominate the market, their capabilties are being taken advantage of by advertising companies. Now firms can purchase from their smartphones by following links, and the charges are simply added to their monthly phone bills. The convenience of making these purchases allow consumers to make transactions instantaneously. Much like a company can buy AdWords with Google for a desktop, that is a company can buy certain keywords that would list their company first in search results when that keyword is typed in Google, they can now do the same with Mobile Advertising. Companies can now tap into the constantly expanding smart cell phone market, most if not all of which have Google set as their phone's default internet search engine. Google for Advertisers offers a variety of options a company can bid or buy them selves into, making them appealing to more than just larger companies. There is no true benefit created here for the user, as just because a company pays to show up first does not make them any more reputable than the company that comes up second. Being able to target your audience through the various tools offered by Google for Advertisers gives a company even more incentive to try and reach new customers this way. [3]


As mentioned in the previous section, there are a plethora of smart phones available. According to reports, there over 30 million IPhones in market alone. The success of Apple’s App Store has given companies an innovative way to reach customers. In this same report, the author states that on average, over 20 applications are downloaded onto each device. With the large success of “apps” (Schmitt), companies have started to focus their attention on designing apps to represent their company. To promote their new sports car, the A4, Audi created the A4 Driving Challenge Application. This app not only heavily promotes the brand but offers users an actual interactive game they can enjoy, which will help its popularity and ratings. The designer brand Chanel created a video integrated application that allows users to watch videos of current lines as seen in past fashion shows. Additionally consumers will download this App because it does not cost anything. These are just a few examples of the large number of companies who are just starting to dabble in this market. [4]

Characteristics of Cellular Phone Advertisements[edit | edit source]

Similar to online advertising, cell phone advertisements have three characteristics: ease of targeting, personalized content, and interactivity. [5] Park, Shenoy, and Salvendy explain that due to the highly personalized settings of the cell phone that these characteristics become more significant: The cell phone is often with or near the owner of the cell phone and the cell phone is seen as an object that is private to that owner.[5] Three styles of advertisement are: animated, static picture, and simple text.[5] On the cell phone, an advertisement may be in the form of any three of these advertisement styles. Animated advertisements were shown to have higher rates of recall and recognition.[5] It was also shown that the presence of banner advertisement enhanced the user's memory of the advertisement.[5]

The environment in which the advertisement is in can be a factor in the impact of the advertisement. Since the environment of a cell phone advertisement encompasses accompanying information, location, time, and tasks, Park, Shenoy, and Salvendy suggest four components: computing, user, physical, and time. [5] "The computing context includes network connectivity, bandwidth and nearby resources. User context means the user profile, location and social situation. Physical context is about the physical environment, such as lighting, noise level and temperature. The fourth context, time, means time of day or week and season of the year."[5]

A case study of a popular cell phone advertiser.

Connects local customers in a particular area code to local restaurants.

Future cell phone users: Cellphone users have been growing rapidly around the world. The future problems that the cell phone companies face is network speed and capacity. With the large influx of cell phone users it is an ideal market to advertise, cell phone carriers show no indication of slowing down.

Location Based Advertising[edit | edit source]

Location Based Advertising (also known as hyper-local advertising) is a type of advertising which takes advantage of a consumer’s real world position. Using this real world position, Location Based Advertising is able to deliver relevant ads for products and services that are in close proximity to that consumers’ current location.[6] By using a cellular phones GPS chip which is found in most of today's smart-phones. Advertisers are working with software designers to master a platform that will effectively deliver adds, information and directions instantly to extremely close businesses.

Over the years, mobile advertising has grown to become a technology that allows an advertiser to promote products or services to targeted users efficiently and effectively. This approach of integrating advertising with mobile device's (iPads, Kindles,phones,etc.), gives merchants an advantage of personalizing advertisements for consumers while providing a Push-Pull Strategy when using location-based advertising (LBA)  Location Based Advertising has been shown to be quite effective. "It is a powerful thing for a business to know a consumer is in close proximity to their store and offer them an incentive to make them take those final steps to enter the store. This is exactly what Location Based Advertising does. It knows where the consumer is positioned in the real world and delivers an ad for a product/service that is “close by” the current location of the consumer." [6]

"Currently, the most common mobile advertisement formats are Short Message Service (SMS) and Multimedia Message Service (MMS). These are push-type technologies that send messages proactively to mobile users. Typically, push marketing is better for companies who have an established relationship with users, who have granted permission to receive such messages. This is referred to as permission-based marketing. However, the mobile phone can be used as a user-driven media device to enhance the dynamics of business-to-consumer relationships and. It can be used for pull-type marketing that sends information based on consumer requests. This mode is most suitable for merchants with simple, time-limited, and location-related advertisements. Advertisements can even be restricted by quota, such as the promotion of a regional company, coupons in a local mall, a community yard sale, and so on. Moreover, future customers with smart phones can actively demand promotional information. Compared with push-based advertising, this pull-type approach, which allows customers to have greater involvement, has gained in popularity." [7]
"The delivery method of targeted mobile advertisements can be differentiated into push and pull marketing strategies. Both strategies need to select targeted mobile users carefully. In push advertising, messages are proactively sent out to mobile users. That is, information and marketing activities flow from the producer to the consumer, which is cheap and efficient. SMS mobile advertising is one of the typical applications adopting a push strategy in the mobile environment. However, acquiring permission from mobile users to deliver messages is always a problem. In contrast, using a pull strategy, a mobile user pulls mobile advertising for his/her own use. It is arguable that pull advertising might blur the line between advertising and service." [7]

Today cell phones or mobile device's use the GPS chip and triangulation of cell towers to figure out your position. By using a Geo-fence, which is nothing more than an predefined area on a map,[6] a business may send a customer inside there Geo-fence ads and information. The major problem with location based advertising is the compromising of an individual's information privacy and safety. For a company to take advantage of a customer's every move and action gives a sense of loss in control over ones personal security.

Benefits of Cellular Phone Advertising[edit | edit source]

Advertising is a great way to help investors obtain larger profits by increasing the quantity of product they sell. Cell phone advertising costs are much lower if you compare it to the costs of advertising on TV or in newspapers. There are a lot of people who carry a cell phone which means the lower cost doesn’t affect the number of people who can see the advertising. Compared with newspaper advertising, cell phone advertising is faster and offers environmental protection.

This multi-sided network has strong network externalities. Each side of the network benefits from each other growing, which has led to the smart app boom we have seen over the past few years. Smart Phone Applications have brought a new wave of old advertising into the market. During the dot-com boom we saw a tremendous increase in advertising style, as companies were able to put ads for products on sites that offered games, social networking, etc. With the smart phone apps, we are seeing the creation of yet another way companies can reach people when they are not watching T.V. or playing games on the computer. If the cause and effect model for advertising is true, then more publicity (more ways to see ones ad) should lead to pricier ad space, higher sales and so on. With the ability to sell advertisements for a higher price on their applications, application makers are being met with even more incentive to develop the next "big" application. Another ingenious advertising idea of the smart app is the logo on the users home-screen. A company can now create an app, offer it for free, and now has their logo on the face of the applications icon every time the user views their home-screen. Its an amazing amount of exposure compared to the relatively low cost of producing and maintaining the function-ability of the application. For example, someone banks at Chase Bank and Chase created an extremely user friendly application for only $0.99. For less than a one time fee of $1, the individual can deposit any check directly on their IPhone without ever having to go to the bank or an ATM. They can also check any of their accounts and transfer money to any of their accounts or to another person. With such convenience to the application they have it on the front page of their IPhone. Every time they unlock their phone, the Chase logo is in their face. Through this example we can see that companies are now creating creative ways to incorporate their function as a business through an application to heavily increase exposure. We are seeing a lot of locator applications pop up, where a company such as RedBox has a free application where you can locate the nearest RedBox, browse the selection of available titles, receive special deals, etc.

Cell phone advertising is considered the next big thing, and the advertisers are closely watching the mobile phone user segment. Advertisers say that an ad in the cell phone is most likely to get a response than any other form of advertising. There are a few reasons based on which marketers think cell phone advertising could be more successful than the other conventional forms of advertising: the cellphone is always with us, the advertisements can get very personal, and the advertisements are small, yet effective. Similar to internet browser ads, the ads on cell phones can be customized toward the user's cell phone use habits, especially when the cell phone user browses the internet from their cell phone.

Texting messages can be expensive, but if you use smart phone, there are so much applications for free texting messages. Also, there are many some lists of text messaging tips helps you maximize what texting can do for you without having to pay extra for Internet data usage. such as facebook, twitter, IM texting message, TextHog.

Security Concerns of Cellular Phone Advertising[edit | edit source]

Advertising on cell phones contain points of interest concerning security. Similar to security concerns on the internet and with email, cell phone advertising brings with it concerns over malware, spam, and privacy.

  • Malware: Ross Anderson notes that cellular phone market may suffer from the same malware problem PCs have dealt with. "At first, the platform vendors - the firms selling operating systems, such as Symbian, Microsoft and Linux - didn't incorporate much security, as it would have got in application developers' way and appealing to complementers is vital when building share in a new market with network externalities. Then, as one platform pulled ahead of the others, the malware writers targeted it." [8] Compromising Internet advertising is one method of spreading malware to personal computers. Cellular phone advertising may be targeted in the same fashion.
  • Spam: Spam over cell phones is known as mobile phone spam and tends to target the text messaging feature of cell phones. Spam presents a challenge to mobile marketers who hope to advertise to cell phone users. According to Peter Fuller, mobile marketers need to distance themselves from the term "spam" and put in place a system that will stop spam before it starts. [9]
  • Privacy: Digital communications that are encrypted provide the highest security. Several digital technologies are available in the U.S., primarily CDMA, TDMA, and GSM. In the U.S., CDMA systems use spread spectrum technology (SST) to provide strong security and difficulty in intercepting except by law enforcement and skilled technicians. The next generation of GSM systems, 3G, will also use SST and according to experts will have strong security. Another valid concern with privacy in the world of cell phone applications is the excessive power the apps wield when they are downloaded to the phone from the marketplace. A given simple stopwatch app can access your phone calls, photos, internet usage etc. Federal law makes it a crime to knowingly and intentionally use cellular telephones that are altered and to allow unauthorized use of such services. (18 USC 1029) Penalties for violating this law include imprisonment and/or a fine. The Secret Service is the agency authorized by this law to investigate cellular phone fraud.
  1. Reedy, Sarah. "Smartphone Apps Driving Mobile Marketing." Connected Planet Online | Formerly 5 Mar. 2010. Web. 01 Dec. 2010. <>.
  2. Elkin, Toby. "Ford Case Study: Using Mobile Advertising on Idle-Screens to Drive Purchase Intent - The EMarketer Blog." Market Research & Statistics: Internet Marketing, Advertising & Demographics - EMarketer. 11 June 2010. Web. 04 Nov. 2010.
  3. "Google for Advertisers - Mobile Advertising." Google. Web. 01 Dec. 2010. <>.
  4. Schmitt, Garrick. "Mobile Marketing: Is 'App-vertising' the Answer?" Advertising Age - Ad & Marketing Industry News. 13 May 2009. Web. 01 Dec. 2010. <>.
  5. a b c d e f g Park, Taezoon , Shenoy, Rashmi and Salvendy, Gavriel(2008) 'Effective advertising on mobile phones: a literature review and presentation of results from 53 case studies', Behaviour & Information Technology, 27: 5, 355 — 373
  6. a b c
  7. a b Li, Kai, and Timon C. Du. "Building a Targeted Mobile Advertising System for Location-based Services." ScienceDirect. Elsevier B.V, 21 Feb. 2012. Web. 2 May 2012. <>.
  8. Anderson, Ross. Security Engineering. Indiana: Wiley Publishing, 2008. Print. Pg. 619.
  9. Fuller, Peter. 2005. Why spam doesn’t have to happen on mobile devices. (retrieved October 13, 2010).