Wireless advertising is literally starting to take shape.
On Wednesday, the Wireless Advertising Association released its suggestions for the standard way to show advertising on cell phones and personal digital assistants. The standards try to dictate, for instance, the number of characters that an advertisement accompanying a short text message should have or how long a pop-up ad should stay on a cell phone's screen.
With a standard set of formats and sizes, the WAA hopes to smooth the path for those who create advertising campaigns. Industry analyst Ovum predicts that revenue from wireless advertising will reach the billion-dollar level by 2006. Jupiter Research isn't that aggressive. It predicts companies will spend about $700 million on wireless advertising by 2005.
Carriers and wireless service providers are also banking on advertising to help recoup the billions they are spending to provide a high-speed, always-on cell phone capable of downloading things like music or games.
But analysts and industry insiders are split on whether the wireless industry, which is still relatively young, should even have standards for advertising right now. WAA Chairman Robert O'Hare believes it's necessary and draws a parallel to newspapers, which adopted a standard set of sizes for the advertisements they display.
Advertising agencies will only have to draw up one-size advertisements, which can run on any device, O'Hare said in a statement. It all makes for a cheaper, more efficient way to sell advertising on wireless devices, he said.
"This is a complex medium, with wide variations in device technology (and) screen sizes," O'Hare said. "Standards will make it dramatically easier for advertisers, ad agencies, third-party networks and publishers to coordinate on a wireless campaign."
Ovum's Rosalie Nelson agrees with O'Hare, although she has authored a report titled "Another Blow to the Wireless Internet Dream." In that report, she forecasts that wireless advertising won't do much to help the carriers' short-term economic problems from borrowing billions to build the networks to deliver the next generation of phone service.
"What the WAA is trying to do is important," she said. "The industry is trying to set some kind of benchmark."
But some working in the wireless industry and wrestling with the same problems that the standards hope to solve say they come too early and may do more harm than good.
Simone Seydoux, director of marketing at ActiveSky, which streams videos onto handheld devices, said a review of the proposed standards shows they don't cover some of the existing methods of wireless advertising.
For example, ActiveSky did a trial run of an advertisement for a pizza company. The ad itself is embedded in the video snippets that ActiveSky provides for handheld devices. But the WAA standards don't cover that type of advertising method, she said.
This is just one example of the new forms advertising takes in wireless devices that the WAA doesn't take into account, Seydoux said.
The WAA is "trying to move one form of advertising into a new form of medium, and I think that's a mistake," she said. "They aren't taking into account advertising's creativity."
Jupiter senior analyst Marissa Gluck says the standards don't address the problem that wireless advertising has right now. She said revenue from wireless advertising in 2001 would be zero dollars.
"It's misguided," she said. "There is a core problem it doesn't address: There is a fractured audience, and companies aren't even sure why they should use wireless advertising."