Cellphone ads ring up privacy concerns

Your cellphone 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.

Imagine getting pitches for rental cars and hotels the moment you land in San Francisco because an analysis of past calls suggests you tend to take week-long trips there. Or if day trips to Boston are your thing, you might get an offer for cab service instead.

"My phone has a lot of very specific and detailed information about myself ... information that isn't always going to be resident when I'm at a number of PC browsers," said Rob Adler, chief executive for mobile Web company go2 Media.

The research firm eMarketer estimates that U.S. spending in mobile ads, at about $900 million in 2007, will grow more than fivefold 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.

"It's always been the next big thing around the corner the last 10 years, and now we really feel that it is," said Brian Levin, chief executive for Liberty Media Corp.'s Useful Networks Inc., a company that helps outside developers tap location information from cell carriers.

Americans are finally using cellphones for more than calling, joining European and Asian counterparts in embracing data services like text messaging and ring tones.

Devices also are improving, and last summer's release of Apple'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.

The phone's highly personal nature will mean more privacy red flags compared with what's collected when someone surfs the Internet from a regular computer.

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.

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