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Wireless coupons on phones' horizon

Wireless content aggregator SmartServ is developing a new form of wireless advertising that it hopes carriers will use to offer coupons over cell phones.

Coupons are getting a makeover, so they can be sent to cell phones.

With an upcoming technology, the Sunday newspaper staples could take shape as wireless e-mails. Inside the messages would be barcodes that contain all the necessary information for retailers to give customers a two-for-one deal, for example, or $2 off a pair of pants.

Redeeming the coupon would involve swiping the phone, with the barcode displayed on its screen, over a cash register's barcode reader, according to CEO Sam Cassetta at wireless content aggregator SmartServ, which is developing the technology.

Some U.S. carriers are interested in using the technology once all the wrinkles are smoothed out, he said. He declined to comment on when the it might be available.

The success of wireless coupons will depend on whether people will use the wireless Web on their phones, said Keith Waryas, a wireless analyst with research firm IDC. Right now, the numbers are very small. Only about 5 percent of people with Web-enabled phones in the United States use them for anything other than phone calls, he said.

U.S. wireless carriers or retailers offering wireless coupons will "have to make a big splash" with advertising or educational campaigns to get the reticent American audience interested, he said.

"It's a cool technology," Waryas said. "I'm just not sure how successful it will be."

Wireless coupons are the latest way that a cell phone's targeted marketing potential can be exploited. Many retailers are interested in wireless marketing because cell phones offer the ability to reach one person at a time--a rare feat in advertising.

Companies hoping to sell their products or services don't know for sure who they are reaching when they advertise on television, where many people can watch at one time, or on the Web, as a personal computer is often shared by a whole family. So a carefully crafted message might never reach its target. By comparison, a cell phone is used almost exclusively by a one person only.

However, wireless marketing has raised concerns about phones being inundated with unwanted e-mail, or spam. But cell phone carriers usually ask for permission before sending any marketing e-mails.

Wireless marketing is getting the attention of major companies such as PepsiCo, Coca-Cola, Nike, Finlandia, Intel and Sun Microsystems, among others.

McDonald's has also expressed interest in using cell phones to market its goods. This week, McDonald's introduced "McMovieQuiz," a movie trivia contest played using wireless e-mails. Winners get free movie tickets and other prizes, said Adam Winston, a spokesman for InfoSpace, which created the promotion and whose technology carriers use for wireless promotional campaigns.

"We're sticking with what we think the market wants," said Winston, who added that the company does not plan on introducing wireless coupons.

Research firm Frost & Sullivan believes that wireless marketing won't take off for another decade. The company said one of the more promising regions for the technology is Western Europe, where cell phone penetration is among the highest in the world and where there's a better network in place than in the United States. That region, the company predicts, will generate about $467 million in wireless marketing revenue by 2006, about a thousand times less than advertising in other venues.