Imagine walking down the street and suddenly being interrupted by your ringing cell phone with an alert that the pizzeria three blocks ahead is having a deal on two slices for the price of one. Or, while folding clothes at the Laundromat, your pager buzzes with a sweepstakes promotion.
Those examples paint a worst-case scenario, but they are not exaggerated, privacy advocates say.
Some companies, such as AirFlash.com, GeePS.com and Go2 Systems, are already beaming location-sensitive information to subscribers who have revealed their ZIP codes or other identifying data.
"Advertisers would love to know exactly which street corner you're walking past so they can target ads based on your location," said Jason Catlett, president of Junkbusters, a privacy clearinghouse based in New Jersey. "It can be very intrusive, and the bottom line is that people don't like to be interrupted."
To stem these fears, a newly formed governing body called the Wireless Advertising Industry Association (WAIA) met for the first time this week to come up with industrywide privacy guidelines and to set advertising standards for the still-developing wireless Web.
The association, founded by AdForce, involves about 14 other companies, including Media Metrix, Motorola and OmniSky. The goal is to position the group as a central resource for wireless advertising, much like the Internet Advertising Bureau determines guidelines for ads on the Net.
Learning from the bureau's past experiences and those of other standards organizations, WAIA members said they plan to tackle the sticky privacy issues from the onset instead of waiting until disaster strikes.
"Early on, when the IAB was forming its guidelines, consumer privacy wasn't considered," said Tim DePriest, a marketing director for AdForce. "We all fantasized about combining online surfing with a person's name and address for highly targeted advertising. Eventually it became very apparent that that wouldn't work. But back then, companies rushed forward without thinking of the consequences on consumers."
For consumers who actually like getting ads that speak to their preferences, the wireless marketing approach may be useful. For example, a music enthusiast eager to buy the best seats at an upcoming rock concert would get an alert the minute tickets go on sale.
While this new frontier could be a boon, however, companies moving from the Net to the wireless Web are walking a tightrope, as they depend heavily on ads for revenues but at the same time must take care not to alienate consumers who don't want to be bothered.
"Privacy definitely needs to be addressed--otherwise, it will stunt the growth of what could be a very large market," DePriest said.
Still, the lure of targeting consumers with advertisements anywhere, anytime may be too much for some agencies to resist.
The market for Net access over handheld devices may still be nascent in the United States, but experts believe it will quickly develop--matching the popularity of wireless Web usage in Europe and Asia.
For instance, Cap Gemini America this week predicted that 78 percent of Net subscribers will go wireless as soon as next year. And analysts at International Data Corp. estimate that close to 1.3 billion people worldwide will be plugged into Web-capable phones by 2004, compared with just 700 million people with ordinary Net connections.
In light of these estimates, online giants such as America Online, Yahoo, Microsoft and Excite are positioning themselves to be leaders in this new market.
Earlier this year, for example, Excite@Home joined a wireless standards organization called the Wireless Application Protocol Forum (WAP) and signed a partnership with Vodafone to deliver mobile content in Britain. And wireless Net company Phone.com, which is developing its own mobile portal, acquired unified messaging firm OneBox.com for $850 million in February.
Microsoft yesterday launched its new handheld system, Pocket PC, in an attempt to carve a place for itself in a field dominated by Palm. America Online last year inked a deal allowing members to send and receive email from their AOL accounts on their Palm handhelds.
All these devices and services are attractive to advertisers eager to reach consumers in a moment's notice and get immediate feedback on the pitch.
Still, agencies realize that they must tread cautiously. Privacy issues peaked during the past year as consumers became savvy to the data-collection capabilities of the Net. Politicians, too, are beginning to listen to the cries of consumer advocates. So far, about 50 policy proposals are before Congress.
"We want to avoid some of the mistakes made early on by other associations and create a good experience for the government and all others concerned," said Bob O'Hare, director of wireless e-commerce for Motorola. "It's important that we not intrude on personal space."