CBS Makes a Stab at Cracking the Mobile Ad Nut

You’re reading the latest about the presidential primary campaigns and suddenly get a craving for coffee. An ad pops up on the screen: Starbucks is offering 10 percent off its afternoon skinny vanilla lattes. Coincidence? Not likely, if you’re checking the news on your mobile phone. Look up, and you’ll probably see a Starbucks across the street. You just got served a location-based ad.

No service provider has been completely successful at micro-tailoring advertising for what is essentially a moving target: mobile device users. Now, though,CBS Mobile has linked up withLoopt to give advertisers a better chance to target these roamers, who thus far have been reachable only through SMS (short message service) ads.

Using Loopt’s GPS (Global Positioning System)-based communication platform and other customer information, CBS Mobile will be selling ad space on its news and sports Web sites. Users that log onto the sites and happen to be near an advertiser’s coffee shop, restaurant or other local establishment, will see the relevant ad displayed.

Uphill Battle

The CBS Mobile and Loopt offering faces an uphill battle. For starters, there are no obvious success stories in this space.

“Basically the mobile advertising business model has yet to pan out,” Geoff Allen, chairman and founder of Anystream, told the E-Commerce Times. “There are a number of reasons why — such as technology issues and carriers unwilling to open their networks.”

Changing Times

However, some of those struggles — particularly to resolve technology issues — are mostly in the past. It may be that — like mobile CRM and other mobile business apps — mobile advertising’s time has finally come.

Location-based advertising is not a new marketing concept, according to Harrisburg University associate professor Mehdi Noorbaksh.

“Higher education institutions have been doing this on CareerBuilder.com and Monster.com, where ads promote continuing education programs based on proximity to campus,” he told the E-Commerce Times. “Tying it to a mobile service appears to be the next logical step and will, in my opinion, appeal to businesses looking to go beyond many of the current media channels to reach potential customers.”

It’s a great way to bring national brands down to the local area, he added.

Google Radio is another promising sign, Peter Koeppel, founder of Koeppel Direct, told the E-Commerce Times. The company is reportedly planning to use a GPS model to tailor ads for the that audience.

“Delivering ads from the stores that you drive by would be a powerful model,” Koeppel said.

If You Build It?

The big test will be whether enough advertisers are willing to invest in an untested model.

“I think the CBS deal is something limited, because they aren’t tied to enough advertisers,” Koeppel said.

The lack of advertisers and the limited content available for consumers are currently the main restrictions, Allen agreed.

“I think they have finally solved the tech issues; I don’t have a problem with that. The challenge is going to be getting enough people to visit the sites — traffic and content needs to build up. Then, it will be a matter of convincing enough advertisers to support the model,” he concluded.