By Chris Drane

For example, suppose a person carrying a Nokia N97 is close to a store that sells mobile telephone accessories. They might be offered 20% off the price of accessories for their N97, provided they purchase in the next 30 minutes. This example demonstrates the key virtue of location based mobile advertising: the offer can be made highly relevant to the subscriber, because they are in close proximity to the store. The example also shows how location information can be combined with other information (in this case the model of their mobile) in order to make the offer even more relevant.

When discussing location based mobile advertising, one way to categorise the advertising is as Pull or Push:

Pull Advertising

This occurs when a user has requested some information, and an advertisement that is relevant to the person’s location is presented together with the requested information. For example, if a user accesses an article on a release of a new Toyota model, an advertisement could be inserted for a motor dealer close to their current location.

Pull advertising is not inherently intrusive, as the advertisement is just part of the normal stream that is being presented to the user. However, this lack of obtrusiveness also means that the advertisement may not be noticed.

Push Advertising

This occurs when a person is presented with an unsolicited advertisement triggered based on their location. In the case of the N97 user described above, an SMS could be sent to them when they are close to the mobile phone store, offering them the 20% off the price of accessories. In this case, the advertisement is more likely to be noticed, but the consumer may react negatively to the intrusion.

Push advertising is inherently more intrusive than Pull, but it could be far more effective than most forms of Pull. Many analysts anticipate that carefully targeted Push advertising inventory will attract significant premiums compared to mobile display inventory.

Business Models

Current business models for mobile location based Pull advertising tend to follow internet advertising models, with either Cost per Mille (CPM) or Cost per Click (CPC) fees.. The required accuracy for most mobile location based Pull advertising can be quite low. For example, often an advertiser may just want to target ads according to the city or state a subscriber is located in.

There are far fewer commercial examples of mobile location based Push advertising in operation currently. Business models include CPM and CPA.

Accuracy

The accuracy requirements for Push based advertising will often be more exacting than those for Pull advertisements. In order to justify the intrusion, the advertisement needs to be particularly relevant to the subscriber, so fine-grained localization is needed (e.g. the need to know when a subscriber is within easy walking distance of a store). Another requirement for Push based Advertising is that the underlying location technology needs to support geo-fencing. This is the capability to trigger an alert when a mobile enters or leaves a defined geographical region. Because reliable geo-fencing is difficult for NCID, this tends to favor handset and SIM based location.

Subscriber Privacy

In order for Mobile Location Based Advertising to be a success, it is important to take into account the privacy of the mobile subscriber. These concerns are likely to be even more important for Push than for Pull based advertising. In the case of Pull based advertising, the user may not even perceive that their location is being used to target the advertisement, but for Push, this will become obvious very quickly. In both cases, the best way to handle this issue is for the subscriber to opt in to receiving the localized advertising, and for the subscriber to have explicit control over their location information.