By Thomas Heath
The Washington Post - April 16, 2007
A lot of people are trying to figure out how to make money off cellphone advertising. A group of investors in McLean thinks it has found a way and is testing it.
The group, headed by former AOL executive Jon Jackson, includes Mark Ein of VentureHouse Group, Raul Fernandez, chairman of ObjectVideo, and two more former AOL executives, Jack Davies and Mark Walsh. From out of town, former NFL quarterback Bernie Kosar is an investor, as is Michael Rockefeller, who is on the board of Venrock Associates, the investment arm of the Rockefeller family.
Their $1.5 million start-up, Mobile Posse, is being tested by an Ohio phone carrier, Revol. It works like this: Customers, lured by a discount or free-service offers, sign up to get Mobile Posse chips installed in their phones.
Whenever a customer's phone is turned on but idle, a rotating series of ads from Mobile Posse's clients appear on the screen. The customer doesn't pay for the time the ad is showing, and the ad disappears as soon as the customer starts using the phone.
Mobile Posse can target ads to Revol customers by sex, age, Zip code or income level. And the rotation can be adjusted according to the time of day. "I can go to a [fast-food] advertiser and say, 'I will serve your ad before hunger points,'" Jackson said. "Then we target and sell ads in the hour leading up to breakfast, before lunch and before dinner."
Competition is going to be tough in the chaotic cellphone market.
"The market is so poorly developed right now that everybody with a good idea is ready to jump in," said David Chamberlain, principal analyst covering the wireless industry for In-Stat, a high-tech consulting firm in Scottsdale, Ariz. "But if people come up with good business plan and have good contacts with carriers, they can be at a real advantage right now."
Jackson agreed. "There are literally hundreds, if not thousands, of companies chasing the brass ring," he said. "The difference for us is we are now out on a carrier in Ohio, so we actually have a market trial in place, a deal with a carrier, and real consumers are touching our project on a daily basis."
