Mobile Video Ads Using Bluetooth Attract Big Brands, Stir Spam Fears

After installing a Quikker box, an advertiser can send videos, ringtones, games or other media from a street billboard to any cellphone within 30 feet -- if the device has Bluetooth, the technology used for wireless headset accessories. If the phone’s Bluetooth is set to “discoverable,” the billboard sends an alert asking the owner to accept content. Once accepted, a minute-long video typically takes 20 seconds to download, said Saul Kato, Quikker chief technology officer.

Quikker sells its Bluetooth device and back-end services to Clear Channel, Prime Point Media, CBS Outdoor and other major outdoor advertisers that own ad spaces across the country. Those companies have sold locations for the Bluetooth-enabled advertising to agencies representing Ford, Pepsi, the U.S. Navy, Anheuser Busch and several other big brands.

Today, Bluetooth video ads appear mainly in eye-level billboards or digital screens, Kato said. Prime Point has advertising contracts with 350 pay phone providers and mostly attaches Bluetooth devices to its more than 750,000 phone booths, said Mark Brodkin, CEO of Prime Point parent OutdoorPartner Media. Clear Channel uses Bluetooth mainly for bus shelter ads, said Tony Alwin, the company’s senior vice president of marketing. The advertiser already has the ads in Washington, D.C., bus stops and plans to expand this year into Miami, Tampa Bay, Fort Lauderdale, Milwaukee, Philadelphia, Pittsburgh, New York, Los Angeles, Memphis, San Francisco and Sacramento. Clear Channel also uses Bluetooth on a Times Square digital billboard in New York, he said.

A battery powers the Quikker device for a month, said Scott Cohen, Prime Point Media director of marketing. “We can place the Bluetooth transmitter virtually anywhere we have a place to secure it to,” he said.

The price to add Bluetooth to static ads depends on location, but on average runs about $1,000 a month, Cohen said. “It is still quite expensive compared to other forms of media advertisers can use,” but the “buzz factor” justifies the cost, he said. Prices are dropping as manufacturing gets more efficient and competition increases, he said. Last year, it cost about $1,500 a month, he said. “It will always be premium priced,” he said, but the cost should eventually drop to become comparable to other media per consumer exposure, he said.

Marketers like Bluetooth ads because they're “cool” and “intimate,” outdoor advertisers said. Print, TV and radio adds are “getting less effective,” Brodkin said. Meanwhile, phones are becoming “mobile entertainment devices” and people are getting more and more “content hungry,” he said. Bluetooth ads will intrigue consumers, Cohen said. “Even people who swear they hate advertising, I think are more inclined to at least dip their toes in the water with Bluetooth advertising,” he said.

Bluetooth ads may be “the holy grail of mobile ads,” Brodkin said. Advertisers can change content remotely, keeping ads fresh, he said. There are even “viral possibilities,” since users can share downloaded videos with friends by e-mail or Bluetooth, he said.

The technology is exciting, but marketers must be careful not to annoy, Jupiter Research analyst Julie Ask said in an interview. “Getting pinged as you walk around has many issues associated with it. Consumers won’t know what it is, could be annoyed and may be concerned that they have to pay.” Ads might also scare recipients, she said. “How will they know it’s a trusted source unless they opt into something that looks very official?”

Consumers won’t compare Bluetooth ads to hated e-mail spam, advertisers said. “We're not trying to bombard people indiscriminately with ad messages, because that’s really a self-defeating endeavor in the long run,” Cohen said. The system is “designed not to bug people,” and users who opt out won’t be offered the same ad again for at least 24 hours, he said. Advertisers can also reduce consumer irritation with demographic and geographic targeting, Brodkin said. Prime Point saw a 25 percent opt-in rate on Pepsi ads because they were placed in areas where young people were hanging around, Brodkin said.

Privacy problems may arise because the devices collect and report data to advertisers, said the Center for Democracy and Technology’s Ari Schwartz, adding that he would have to read the privacy policy to be sure. The devices don’t send private user information, Cohen said. Typically, they send “a daily summary of the total number of devices prompted, opt-ins, opt-outs, and non-responses,” he said. “The jacks do not collect actual phone numbers per se, but they do capture a long device ID code that the jack uses to ensure that opt-outs are remembered and users are not bombarded with unwanted messages.”

Below-average consumer awareness of Bluetooth could erase privacy questions, analysts said. “Most people are unaware of whether they have Bluetooth in their phone,” and consumers may be unsure how to change settings to get content, Ask said. Analysys’s Jason Kowal agreed. “Sending location-based advertising over SMS is still very new here in the U.S., so I'm not sure users are ready for a Bluetooth variant,” he said. Most people haven’t used the Bluetooth content sharing feature, either, Ask said. “Each time I do that with somebody, it’s the first time that they've done it.”

Advertisers recognize that it will take time to figure out the medium, Cohen said. Even if an advertiser had the “most targeted, relevant piece of content,” it will “blow up in [its] face” if the user doesn’t know how to get it, he said. Instructions on static billboards will make setting up phones for Bluetooth ads easier to understand, Kato said. “When people see a sign that says ‘Turn on your Bluetooth,’ most people can figure that out.” Even if some consumers are confused, singling out the tech savvy isn’t a bad thing, Alwin said. “That’s a particular demographic [marketers] are after,” he said. It’s also one that tends to be “younger and harder to reach with other media.”

Not all cellphones support the ads. Kato estimates that about half the phones owned by U.S. consumers have Bluetooth, though “almost every new handset sold” does, he said. Verizon Wireless phones won’t work, because the carrier has a policy restricting content transfers using Bluetooth, Kato said: It’s “the only big group of users we don’t support.” That could change when Verizon starts its “Any Device, Any Apps” effort this year, Kato said. “We're hoping that extends to Bluetooth.” Verizon doesn’t allow content transfers from sources it hasn’t approved for its network, a spokeswoman confirmed. “It’s too early to tell” whether the openness campaign “will address this specific subject,” she said.

Municipalities are generally tolerant of Bluetooth ads, though restrictions exist, outdoor advertisers said. In New York, for example, Prime Point can’t put ads on public pay phones, Brodkin said. Prime Point also seeks to avoid situations like the Cartoon Network guerrilla ad campaign in Boston that led to a bomb scare, Cohen said. “Even when we are following all the regulations, we make sure [cities] will be aware of what’s going on,” he said. The company puts its name, phone number and Web address on its boxes to avoid confusion, he said. “We're definitely not trying to do this under the radar.”

The technology has public safety uses, too. Outdoor advertisers sometimes work with municipalities on public service campaigns, Kato said. Clear Channel could eventually use the technology to provide weather alerts or emergency notifications, Alwin said.

Bluetooth ads are in their “infancy” but should become “well known” in the 10 densest markets this year, Alwin said. Clear Channel is still installing the technology, so it might take time for advertisers to “get good at it,” he said. OutdoorPartner Media won five contracts in 2007 and expects a “nice uptick” this year, Brodkin said. Meanwhile, consumers are looking more at their mobiles and less at their TVs, Brodkin said. That means “the race is on.”