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Advertisers target mobile phones

By Pia Heikkila
CNN

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LONDON (CNN) -- Text message advertising is set to expand quickly in Europe in 2003, with the third generation (3G) mobile phone networks adding bells and whistles.

Advertisers are harnessing multimedia messaging systems (MMS) to plug their products with sound, video and even interactive games.

Soon we could be receiving the trailer of the latest blockbuster movie on our phones, video clips of favourite pop stars or tasters of new computer games.

Research firm Forrester predicts that 56 percent of European firms will be using text messages as a marketing tool by the end of 2003.

Lars Becker, chairman of the UK's Mobile Marketing Association (MMA), says customers willing to put up with adverts may find it worthwhile. "Many companies are likely to offer the customer a choice first to download an advert, and as a result the piece they want to buy will be sold at reduced rate."

About 20 billion SMS messages are sent in Europe each month. Ten percent are related to marketing or customer services, says the European Mobile Data Association.

But e-mail spam has left a bad taste in the mouth and consumers are wary of electronic advertising.

"We have seen a 500 percent increase since last year in complaints about SMS marketing, but most of these are to do with premium number companies who are out to make a quick buck," says the Committee for the Supervision of Standards of Telephone Information Services (ICSTIS).

Now ICSTIS is going after the mobile spammers to keep the industry clean.

In August it fined UK-based promotion firm Mobymonkey 50,000 ($80,000) for sending unsolicited text messages to users. The message said users had won a mystery prize and urged them to call a 1.50-per-minute number.

The European Parliament has also stepped in too to limit unsolicited text messages. An electronic communications directive was introduced in June and each of the 15 member states are set to implement it during 2003.

The directive states that all mobile marketing must to be approved by the recipient through an "opt-in" clause.

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Little appetite for spam, but will phones go the same way as e-mail?

"Mobile phone users will only receive advertising messages if they have chosen to do so through participation in previous marketing campaigns or similar agreements," says the MMA.

Those marketing SMS messages say it will be much easier to weed out rogue companies sending spam, since all service providers need phone operators to set up the technology.

A Vodafone spokeswoman said: "If a company is caught sending large amounts of unwanted messages, we have ways to block that company from using our network and sever business ties with them."

The cost of sending thousands of SMS adverts is also likely to deter spammers, according to Aki Snellman from Finnish mobile marketing technology company Add2Phone.

"If a company is going to send 500,000 messages at the cost of 0.2 euros each, it needs to get some kind of response in return."

Commercial messages in the future are likely to be a hybrid of customer relations and pure advertising, according to Snellman. "Many banks in Finland already send account information as SMS alerts to their customers and offer a new service as part of the same message."

Sales figures of the latest multimedia phones are not yet available. But handset manufacturers hope customers are hungry for multimedia content.

Snellman says: "The preview of the next episode of 'Lord of the Rings' could be available as MMS to film fans. The danger is it might become even bigger hit than the film itself."



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