Ready for cell-phone ads? Advertisers aren't

updated 2:14 p.m. ET Dec. 28, 2007

NEW YORK - In the weeks leading to Christmas, an online wine retailer gave 15 percent discounts to anyone who sent in a photo of its newspaper ad snapped with a camera phone.

SnapTell Inc., the company helping Wine Enthusiast and other merchants offer such services, uses image-recognition software to determine what offer, video clip or other content to return to the phone. In the coming months, the same technology could deliver movie reviews and discounts to anyone snapping a picture of a movie poster or billboard.

It's one of a number of emerging approaches to mobile advertising, an industry still in its infancy but showing promise. More than 80 percent of Americans now own cell phones — a statistic Jupiter Research analyst Neil Strother equated with "carrying a potential advertising channel in their pocket."

Fast-food chains, carmakers and TV reality shows have run contests and other promotions in which consumers participate by sending text messages. Wireless carriers have begun letting companies run banner ads — mini-versions of what you might see on a PC. Google Inc. and Yahoo Inc. have brought lucrative search ads to phones.

Advertisers have been spending a little money here, a little there trying to gauge what works on mobile phones. The efforts so far are best described as trials and pilots, lacking in comprehensive strategy.

"It's the Wild, Wild West right now," said Rick Sizemore, chief strategy officer for the tech consultancy Multimedia Intelligence. "This is an interesting and compelling vehicle, but they don't necessarily know who to work with. There are so many options out there — a lot of hype with no substance, and then a couple of gems."

SnapTell is among Sizemore's favorites.

Gautam Bhargava, SnapTell's co-founder and chief executive, said the company considered the phone's unique qualities — its lack of regular keyboards in most cases, and the ubiquity of built-in cameras. Rather than require someone to punch in a brand name using a clunky keypad, the company decided to accept picture messages.

"We wanted to make it simple for the end user," Bhargava said. "There's nothing to install on your phone. You don't need to pre-register. We do not have to worry about whether you are with Carrier A, B or C."

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