Deloitte Top 10 list deflates wireless marketing hype

The concept of location-based marketing on wireless devices will not live up to the hype that has recently surrounded it, according to mobile industry watchers at Deloitte Consulting in Ottawa. The conclusion was part of a Deloitte Top 10 list of hot topics in the mobile world for 2001.

According to Senior Manager Alex Dhanjal, the idea behind location-based marketing works like this: You walk down the street and as you pass a store, your mobile device beeps and tells you that the store has a sale on some item of importance.

“People would want to preserve their privacy, so they don’t want to just give out their location information so that somebody can spam them and tell them that there’s 10 per cent off, unless it’s something that the user or subscriber has opted for,” Dhanjal said. “If you opt to do something, then it’s okay.”

That type of invasive marketing is common in the Web world, but according to Dhanjal, it just won’t cut it on mobile devices. He added that the mobile world is much more content and time-sensitive, so people don’t want to be bombarded with messages they don’t want to receive.

According to Toronto-based Rogers AT&T Wireless’s director of marketing, interactive mobile services, Stephen Jack, while location-based marketing isn’t going to be a big thing any time soon, it will eventually surface. He added that he knows of tests of mobile push marketing done by AT&T in the U.S. that have garnered positive results, but it’s unknown at this point how feasible it is. He said, however, that he does share Dhanjal’s concerns.

“There’s a lot of smoke. Whether or not there’s any fire or not remains to be seen,” Jack said. To be effective, a location-based service has to be three things: contextual, relevant and personal to the user, he said. A service must meet all three criteria to be effective.

Dhanjal believes, however, that there is hope for some location-based services. For instance, location-based pull services (as opposed to push services such as spam marketing) will be important to both the enterprise and consumers, he said. A virtual Yellow Pages that helps you find a good restaurant nearby or an alert that tells a businessman that it’s time to get to the airport can help save time.

Another area that’s been hyped is the so-called “dot-com-ready” phones that allow users to surf the Web and conduct online transactions without being at a desktop computer.

“The problem with wireless right now is we’re trying to use it as a substitute for surfing or a PC-based browser,” Dhanjal said. “And that just does not work. The form factors are very constraining. It’s not designed for that.” He added that the technology just isn’t ready for the uses people want it for, but the time is coming when surfing on a mobile device will be very much like surfing on a desktop computer.

In his predictions, Dhanjal also downplayed the importance of 2.5G and 3G wireless speeds. In the m-Outlooks Top 10 list, faster communications is “just the next logical step in improving the power, speed and quality of networking that began with the first telephone cables in the 19 th Century.”

Jack only partially agreed.

“On the surface, that’s true,” he said, but the speed of a connection is tied into the applications that will be available with 2.5G and 3G wireless.

And with 2.5G and 3G wireless, the most important thing is the applications that will be available to users, Dhanjal said, although there isn’t anything compelling about watching a video clip on a mobile device. So what applications will be big? Dhanjal said all of the pieces of the puzzle haven’t fallen into place.

“One of the things I want to emphasize is that we don’t want to use technology for the sake of technology. It has to have a value proposition that makes economic sense. If it doesn’t, it’s not going to fly,” Dhanjal said.