Mobile ads take baby steps to reach consumers

By Nicola Leske

BARCELONA (Reuters) - Consumers may be receptive to advertisements on their mobile phones in exchange for free calls or content, but operators remain cautious about intruding on the intimate space of a customer's cell phone.

For now, consumers do not have to fear that walking past a supermarket will trigger messages to their mobiles, advertising special offers inside, or have banners burst onto the tiny screen while they check their emails on the go.

"Advertising is not just a straight move from the PC to the mobile phone," Marco Boerries, head of Yahoo's mobile business, said in a keynote speech at the Mobile World Congress in Barcelona.

"We're trying to invent mobile advertising."

Ad companies and operators see it as an opportunity to generate new revenue streams. According to a number of studies the mobile ad market is expected to generate revenues ranging somewhere between $1 billion and $24 billion within 4 years.

The problem is that while surveys show that 80 to 90 percent of customers are more than willing to accept advertisement on their mobile phones if they can get free music or video, the market is still in its infancy. There are few proven models of what a mobile advertising campaign should look like to be successful.

"As with online, there is no rulebook for mobile advertising. It is uncharted territory for us all," UK Internet advertising bureau (IABUK) said in a 2007 study.

A number of companies are experimenting, however.