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Pepsi foots the bill for wireless ads

The soda maker, the latest international company to use wireless advertising, launches a campaign thinly disguised as a game that is played on a cell phone.

Pepsico on Thursday became the latest in a growing number of major international companies to use wireless advertising as a way to sell products, with the soda maker launching a campaign thinly disguised as a game played on a cell phone.

Pepsico's "Pepsi Foot" is a fantasy soccer game played by exchanging short text messages using cell phones.

The game is similar to fantasy sports leagues in the United States, where players choose pro athletes for a team, then play a virtual game against another person's collection of players. The outcome is based on the players' real-life on-field performance.

Sending text messages, known as SMS, is wildly popular in nearly all areas of the world in which cell phones are used, except for the United States. The Pepsico game is being offered in Finland.

Playing games with cell phones is big business even when advertising is not involved. Nearly every wireless carrier has bulked up their game playing options in recent months.

With the soccer game, Pepsico joins a list of major companies that have launched wireless ad campaigns in the past year. The companies include Coca-Cola, which has its own fantasy soccer game, Nike, liquor maker Finlandia, Intel and Sun Microsystems.

Analysts expect more companies to join in the fray in the next year. Those with ad dollars to spend are realizing the number of cell phone subscribers, and those using the mobile Internet or sending short messages to each other, have reached volumes considered acceptable to run an advertising campaign, analysts said. Market analyst firm Strategy Analytics believes there will be 1.7 billion wireless subscribers by 2006. That figure represents nearly a fourth of the entire human population.

"Major companies are starting to embrace it," said Nicole Lewis, associate analyst with research firm Jupiter Media Metrix. "For advertisers, you need an audience of at least one million to have an effective campaign."

It's no coincidence that most of the wireless ad campaigns are in Europe. In some areas of Europe, cell phones are used by 70 to 80 percent of the population. These same customers also frequently send short text messages to each other's phones. In England, for instance, there are an estimated 1 billion of these messages sent every month.

In the United States, where cell phone penetration is low, there are less than one million subscribers to SMS services. "In the U.S., viewing wireless ads is still an experiment," Lewis said.

Bigger companies embracing wireless advertising are starting to change the minds of analysts about how significant wireless advertising might be in the future.

Jupiter Media Metrix previously forecast that the amount spent by corporations on wireless advertising will blossom from an estimated $100 million this year to $1.2 billion annually by 2005.

"That's not a huge number," said Jupiter Media Metrix analyst Joe Laszlo.

But the research firm didn't take into account advertising dollars spent on SMS campaigns. It's likely, given that major companies are now diving into that medium, that the projected wireless advertising dollars spent will increase, he said.