Making a more lucrative mobile Web

Netflix just may be the most annoying entity in online advertising.
As you’ve probably noticed, the movies-by-mail company has mined the Internet with pop-ups, resulting in an unpleasant game of Whac-a-Mole as surfers move from site to site. The ads somehow seem to circumvent pop-up ad-blockers (at least the ones I use), and – worse – deliver the ads indiscriminately, forcing even longtime Netflix subscribers (yes, like me) to view and close the windows.
I’m reminded of that kind of blind marketing mentality every time I stroll my carrier deck see a banner ad for a ringtone by, say, Lil Wayne. I haven’t bought a ringtone since, well, ever, and I don’t know Lil Wayne from Lil Bow Wow, Little Orphan Annie or The Little Engine That Could. So the odds of me checking out Mr. Wayne’s latest mobile-content offering are precisely zero. And my carrier should know that.
While the on-deck banners certainly don’t have the annoyance factor that plagues pop-ups, the result is the same – at best, the pitches are a waste of advertising resources, and at worst they’re obstacles for consumers looking for something else. And they’re unlikely to generate the kind of advertising revenues that will approach analysts’ sky-high forecasts for the wireless Web.
Behavioral targeting isn’t without risk, of course. Online efforts have sparked protests from consumer-advocacy groups and governmental agencies who claim the tactic may violate users’ privacy.
But consumers have shown a willingness to allow marketers to track their online movements if it improves the overall user experience – and if reasonable safeguards are in place. A study earlier this year from Deloitte and the Harrison Group found that two-thirds of U.S. Web users said they’d be willing to accept more ads in exchange for free, valuable content, and nearly as many said they’d click on better-targeted online ads.
“Unfortunately, this potential audience for Internet ads is largely unenthusiastic about most forms of advertising, notably banners, rich media and the growing area of online video,” according to David Hallerman, an eMarketer senior analyst who’s authored a new report on behavioral targeting. “A primary reason for their lukewarm attitude is Internet advertising’s irrelevance, with messages peripheral to their current interests and needs.”
And we’re not talking about leveraging consumer proprietary network information (CPNI), the third-rail kind of stuff that prompted some consumer backlash last year when Verizon Wireless asked subscribers to opt out of a data-sharing program with the carriers’ partners, or the faux-viral social-networking advertising that got Facebook into hot water last year. I’m not advocating mobile pop-ups, unsolicited text ads or any other type of in-your-face marketing effort that would inevitably draw the wrath of consumers. But revenues may surge if network operators and their partners dump the one-size-fits-all billboards on the wireless Web and segment their subscribers the slightest bit.
Even the most innocuous kinds of mobile ads are sure to anger the lunatic fringe, of course, and grandstanding politicians who point their fingers at
“intrusive” campaigns will always find an audience. But most U.S. consumers by now understand that their movements on the Net are being tracked by advertisers, and many are OK with domestic wiretapping in the name of national security.
Sprint Nextel Corp.’s latest initiative seems to be a pretty small step in the right direction in presenting marketing messages to consumers who might actually welcome them. But it’s time at least one carrier stepped up its effort and gambled that a few ruffled feathers may be worth making the mobile Internet a more inviting – and more lucrative – place.