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Ads on cell phones raise worries

Privacy issues crop up as technology makes it easier to track phone users.

NEW YORK - Your cell phone is a potential gold mine for marketers: It can reveal where you are, whom you call and even what music you like.

Considering the phone is usually no more than a few feet away, these are powerful clues for figuring out just the right moment to deliver the right coupon for the store just around the corner.

But, first, marketers will have to wrest the personal profiles from mobile carriers worried that annoyed subscribers might defect to rivals.

"It's proceed with caution," said Jarvis Coffin, chief executive of advertising distributor Burst Media Corp. "Are consumers going to be spooked by the idea that suddenly their phone goes beep and it's a Starbucks offer, and they are standing next to a Starbucks?"

Carriers are now guarding the data zealously, but many people believe it's only a matter of time - over the next year or two - before marketers can routinely target ads to a potential customer's location and actions.

The research firm eMarketer estimates that U.S. spending in mobile ads, at about $900-million in 2007, will grow more than 500 percent, to nearly $4.8-billion, in 2011. By contrast, paid search and other online spending will only double, to about $42-billion in 2011.

Mobile ads today are mostly blasted at the mass audiences, with a few carriers offering limited targeting based on users' age, gender, ZIP code and other characteristics.

That should change. Ever since the Federal Communications Commission ruled in 1996 that wireless carriers must help 911 dispatchers identify a caller's location, technology companies and privacy advocates alike have been speculating about making phones' location information available to commercial services and advertisers.

Americans are finally using cell phones for more than calling:services like text messaging and ring tones. Devices also are improving, and this summer's release of Apple Inc.'s iPhone unleashed an era of bigger screens and friendlier interfaces for mobile Web browsing.

Advertisers, meanwhile, are starting to experiment with mobile ads. With a boom in GPS devices and location services like maps and child tracking, it's only natural that advertisers, too, will want to take advantage of location information.

Two industry trade groups - CTIA and the Mobile Marketing Association - have committees developing guidelines, including how to properly get a customer's permission and periodically remind them of any tracking.

Companies are also developing ways to share profiles with marketers while stripping out sensitive information like names.

[Last modified December 28, 2007, 22:56:56]