Hong
Kong 'ring-ring': An ad in every call
By Gary LaMoshi
HONG KONG - Movies such as Minority Report feature a future of
personalized advertisements that identify you, then target you and bombard you
as you walk down the street. Already today, there's barely any escaping ads:
even public bathroom walls are for sale to pitch you another beer and a taxi
ride home when you've had too many.
At home, radio, television and the Internet all feature advertisements that act
as a toll barrier users must cross to access the wider world. In fact, the only
way you can link to others without an advertising assault is to dial the
telephone. But if a Hong Kong start-up company called Ad-Phone Limited gets its
way, advertising will become part of every call you dial.
Ad-Phone has patented a system to replace the ring-back tone - that "ring-ring"
you hear while waiting for the person you called to answer - with an
advertisement or other message. Using the digital technology that connects
calls, Ad-Phone puts messages directly into consumers' ears, whether they're
using a mobile phone or a wired line.
'Next revolution in advertising' "Ad-Phone converts the idle time waiting for calls to connect into a direct
channel to reach more than 4 billion consumers around the world," chief
executive officer Dr Paolo Conconi said. "We've declared the next
revolution in advertising."
Advertisers have long recognized the power of the telephone as an advertising
channel, since it's personal, direct and nearly universal. According to
Conconi, who holds a doctorate in economics from Italy's University of Bergamo,
the problem has been finding a way to use the telephone as an advertising
medium that's not obnoxious and unwelcome. Ad-Phone takes advantage of the
personal and direct channel, but only when consumers are already using the
telephone and only if they choose to receive the service.
Like many revolutions, Ad-Phone began with a trivial incident. Conconi tells of
a colleague repeatedly interrupting a business dinner as he tried to call his
wife. "He just kept hearing 'ring-ring' for what seemed like hours," Conconi
recalls. "We began to talk about what he could hear instead that wouldn't be so
boring and could add value. Ad-Phone was born as a way to put a bonus in every
phone call."
Telecom companies are poised to receive the biggest bonus from Ad-Phone.
Advertising spending to reach 6.5 million consumers in Hong Kong alone exceeds
US$4 billion annually. Figures approach US$40 billion when you add mainland
China and Taiwan to the picture.
"We think it's realistic to estimate that advertisers would commit 10% of their
budgets to telephone," Conconi said, citing the growing interest from
advertisers and even established media in alternative channels. He mentioned
that America's venerable Washington Post Company, which publishes Newsweek
magazine, as well as the newspaper of record in the United States capital,
bought online political and cultural magazine Slate.com for an estimated
US$10-15 million in December. That logs him on to two points.
Dot-com vs Dot-phone
"Dot-com versus Dot-phone is no contest for advertising," said Conconi, in Asia
since 1992 sourcing digital communication equipment for European firms. "There
are 4 billion people around the world who are already telephone literate,
already have the equipment they need and know how to use it, and are already
providing a steady stream of traffic to the right site," Conconi argued. "To
put it even more simply: everybody who uses the Internet is a telephone user,
but only a small percentage of telephone users log onto the Internet - and who
knows where they go once they log on?"
Conconi's second point is that mass media isn't the mass it used to be. Asia's
last regional news weekly, The Far Eastern Economic Review, called it quits
late last year. Cable television has shattered national network broadcasters'
monopolies in developed economies. Even in less developed economies such as
Indonesia, where there were two television channels a decade ago, there are now
10 stations battling for viewers. A similar phenomenon is taking place among
newspapers, with the Internet providing further competition and fragmentation.
"The mantra in media today is to be more specialized, more tightly focused, and
the telephone certainly can compete successfully on that basis," Conconi
contended. "But step back and think about the whole idea of mass media.
Telephone is the last of the mass media, and it's the only one that's still
growing. For advertisers that are trying to reach mass audiences anywhere on
earth, across all age brackets, income and educational levels, there's nothing
that can touch the telephone."
Revolution will be 'incentivized'
Telephone companies and advertisers will surely love the idea of the Ad-Phone.
The challenge will be getting consumers to embrace it, or at least accept it.
Ad-Phone will likely be an opt-in system - customers will have to choose to
accept messages on their phones - to avoid legal and privacy issues and
preserve good customer relations. Conconi emphasized that it's up to telecom
companies to decide how to provide incentives in order to entice consumers, but
he was willing to offer some ideas.
"Ad-Phone is a revolutionary medium for advertising and it's an opportunity for
some revolutionary thinking," Conconi, a former marketing specialist for French
food conglomerate Danone, proposed. "You can make it like advertising on
television or radio, medicine that people have to swallow to get what they
want, or you can use Ad-Phone to deliver information people will want to hear.
I see Ad-Phone as an opportunity for telecom providers to differentiate
themselves from competitors, to add value for their customers in cooperation
with advertisers."
For example, Conconi suggested that the menu of messages Ad-Phone delivers
could include exclusive offers for customers, from discounts to special events
to lucky draws, all linked to advertisers. In addition, telecom companies could
also use Ad-Phone's system to provide customers with live broadcasts of news
and government announcements. "Beyond advertising, Ad-Phone can become a key
link in the consumer information chain," Conconi said, adding with a chuckle,
"Maybe we should call Ad-Phone the next revolution in communications."
Whatever happens with Ad-Phone, make no mistake: the revolution is underway.
South Korea's SK Telecom has developed a system that allows users to select the
ring-back tone that callers to their number will hear from a catalogue of
popular songs. Subscribers can even choose different songs for different
callers. The service quickly spread to Southeast Asia and Europe, and late last
year debuted in California en route to a roll-out across the US this year.
No one is sure what will happen when Ad-Phone's designated ring-back tone for
the caller meets a ring-back selected by the receiver. What's certain is that
it won't be long before you're telling youngsters about those simpler days when
everybody just heard "ring-ring." The choice, the way Ad-Phone's Conconi
described it, is whether those simpler times or this revolutionary era wind up
in consumers' minds as the good old days.
Gary LaMoshi has worked as a broadcast producer and print writer and
editor in the US and Asia. Longtime editor of investor rights advocate
eRaider.com, he's also a contributor to Slate and Salon.com.
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