Contextual Marketing: The New Wireless Killer App?

  |  May 30, 2001   |  Comments

Wireless technologies that combine the benefits of the physical and virtual worlds and empower mobile users will prevail. The future of wireless for media delivery is up for grabs, and countless start-ups know it. Bruno discusses one such company's product.

Although wireless experts may disagree on the type of applications, content, and services that consumers will inevitably embrace, they agree on one thing: Successful marketing applications will enable the delivery of valuable, on-demand, on-location, and time-sensitive information all around the world. Wireless technologies that combine the benefits of the physical and virtual worlds and empower mobile users will prevail.

Sure, wireless marketing is still in its infancy. But the future of wireless as a media delivery is up for grabs and countless start-ups know it. One pioneer, WideRay, a wireless technology firm based in San Francisco, is embracing the challenge and paving the road for a new form of wireless marketing.

Advertisers Want to Beam You

Contextual marketing enables advertisers to target consumers with customized messages by allowing them to request targeted and timely information by simply pointing their wireless device to a designated terminal. Information is transmitted by a small infrared broadcasting device that beams information to all compatible devices (wireless application protocol [WAP]-enabled cell phones, pocket PCs, personal digital assistants [PDAs], and other Palm OS-based devices) within a given range.

Commercial applications for this concept are virtually endless. "A store is closed, yet someone walks by and wants more information about what's in the window. Zap. They get deep information instantly, directly from the display," suggests Saul Kato, CEO of WideRay.

Other popular ideas include receiving retail promotions, catalogs, and coupons; finding the nearest stores; checking out flight schedules or real estate listings; finding out movie times; getting pricing and product information about advertisements on billboards and kiosk displays at trade shows.

The PDA Phenomenon Fuels Demand

North America is projected to be a strong market for all types of hand-held wireless devices in the next few years. Results are already speaking for themselves: U.S. sales of PDAs reached 6.1 million units in 2000 according to the Consumer Electronics Association. Sales for 2001 are expected to grow another 57 percent to a total of 9.6 million units. The Yankee Group projects even higher numbers: 13.3 million units by 2001 and up to 26.6 million in 2003.

Despite the rapid growth of pocket PCs and the usage of hand-held devices, and despite the worldwide potential, advertisers have found themselves dealing with a small installed base of consumers for their marketing campaigns. Consequently, they have been reluctant to enter a relatively premature market, and wireless budgets have been scarce.

Although sales for Internet-ready phones, PDA wireless modems, and hybrid PDA phones (such as the QCP 6035 Kyocera Smartphone and Sprint PCS TP3000) are gaining in popularity, the overall volumes remain low.

But advertisers need wait no more. There's no need to exclusively rely on WAP or short message service (SMS) for your marketing campaigns. Advertisers can immediately leverage the benefits of contextual marketing with infrared technology.

If It's Good for Consumers, It's Good for Advertisers

Contextual marketing offers unique advantages. First and foremost, the wireless service is free to consumers, although one might predict that payment may occasionally be required in the future for rich content or mobile commerce (m-commerce) services. The technology leverages the existing infrared ports found on most PDAs; users do not have to invest in new hardware or software or even incur subscription fees.

"Because of the form factor, there is a limited amount of time and space to deliver information to people, thus it must focus on being very targeted and value-oriented," says Kato. He adds, "A contextual access represents a very active, conscious form of end-user request."

The service is exclusively on-demand and highly relevant based on where you are, what you are doing, or what you're looking at. The technology does not require much human intervention, like scrambling for pen or paper or even grabbing your PDA stylus. As consumers get within "beamable" range, they are prompted to accept the information download. After they accept, the information beamed to the hand-held device can be read and saved. It's that simple. The information transmitted to the hand-held device is quickly accessible.

WideRay technology can deliver approximately 200 pages of raw text or 50 pages of text and graphics to users in less than 10 seconds (about twice as fast as with a 56K modem). Furthermore, once downloaded, the information can be accessed at any time. These benefits should be well received by advertisers always eager to find innovative and incremental ways to reach prospects and customers.

The Ultimate Pull Vehicle for Outdoor Advertising

WideRay is not alone in this pursuit of wireless-marketing nirvana. Streetbeam, a NYC-based media and wireless technology company, has investors like TDI (a Viacom Company), one of the world's largest outdoor media companies. It's no coincidence. Streetbeam has focused its energy on integrating this wireless technology with traditional outdoor advertising so that information such as product specifications can be beamed to all compatible devices as they pass within range of an outdoor ad.

Last December, Banana Republic, a division of Gap Inc., posted ads on 100 Manhattan phone kiosks to provide a list of store locations and information on its sales and holiday gift ideas. The campaign generated 3,000 hits.

Streetbeam also enables advertisers to integrate SMS into their campaigns and consumers to access information via their WAP-enabled cell phones. Terminals are labeled with a unique identification number that customers will enter into the cell-phone browser at Streetbeam's WAP site (wap.streetbeam.com) to receive more information.

Similarly, adAlive, a Massachusetts-based company, integrates its wireless technology with public-space media (e.g., airport billboards, hotels, malls) and, in addition to advertisements, gives PDA-users access to valuable content -- like email and data synchronization -- and has already lined up several marquee partners such as city-guide Vindigo and content portal AvantGo.

Is Success Guaranteed?

As the novelty wears off, advertisers will demand measurable results and return on investment comparable to that of other digital media. To attract large budgets, WideRay and its competitors will need to cost-effectively deploy a large number of terminals across the country to see customer adoption rise and awareness build. And while promising at many levels, the concept has not proven itself as a viable, cost-effective marketing vehicle yet.

However, traffic deployment issues such as limited broadcast range and number of simultaneous users seem to have been successfully addressed by WideRay, which has built an advanced infrared technology for its data distribution system: a fivefold improvement over industry standards, or a 15-foot reliable range, and the ability to handle multiple simultaneous users without degradation in connection speed.

Last month, Metreon, a Sony entertainment center that receives more than 10 million visitors per year, installed WideRay's product to provide beamed content to visitors. This technology has received the attention of many advertisers, such as Land Rover and Stanford University, and case studies will follow for validation in the next few months.

As people around the world see their city streets, airports, and retail stores inundated with wireless terminals and server farms, advertisers will fight to capitalize on this technology and beam their marketing message to the techno-geek consumers we are.

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ABOUT THE AUTHOR

Bruno Gralpois

Bruno Gralpois was former General Manager of Precision E-mail, a suite of email solutions launched by avenuea.com in October 1999. Prior to that he was Director of Database and New-Media Strategies for DDB Direct where he headed efforts in emerging new-media technologies. A native of Nantes, France, Bruno has also worked in sales and product marketing, and has published numerous articles on technology, and direct and Internet marketing in Europe and the United States.

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