By Ben Hammer
Washington Business Journal - March 16, 2007

Wireless advertising company Mobile Posse is beginning a two-month trial to connect major brands such as Pizza Hut and Panera Bread with subscribers of Ohio wireless carrier Revol. McLean-based Mobile Posse sells and configures ads to work on the cell phones of subscribers who opt to receive targeted messages based on their ZIP codes and interests. Mobile Posse splits the ad revenue with the carrier, which offers discounted rates to subscribers who participate.

Revol was set to begin a trial of Mobile Posse's ad platform March 15 with a dozen national and local marketers. The carrier will offer customers who opt in for the trial credits worth $10 toward their monthly service fees. Revol is promoting the trial at 250 stores within its coverage area, which includes cities in Ohio and Indiana.

Putting up cardboard promotional ads in stores and handing out brochures to customers are ways to garner attention for the trial, but Mobile Posse has a more potent weapon in its pocket. Former Cleveland Browns quarterback Bernie Kosar, an investor in Mobile Posse, will pitch the product on interviews with Cleveland TV and radio stations.

Kosar participated in a $820,000 seed round of funding for Mobile Posse in October. Officials say the company has raised more since then but won't provide details.

Local investors include Jack Davies, former president of AOL International; ObjectVideo CEO Raul Fernandez; Venturehouse investment firm CEO Mark Ein; Mark Walsh, the former president of AOL Enterprise and CEO of VerticalNet; and the investment firm of Joshua Freeman, the CEO of real estate company Carl M. Freeman Associates.

Mobile Posse has gotten itself into great position less than a year after its August 2006 founding. The company not only has big-name and well-connected backers but already has landed the holy grail of wireless media: gaining access to a carrier's deck.

"We've got to prove that we can do this from a technical standpoint, and consumers don't have to love it, but they can't leave their carrier because of it," says Mobile Posse founder and CEO Jon Jackson. "We're not even in warm-up; we're not even in the first inning."

Jackson is a former senior manager at AOL venture capital arm The Greenhouse. His management team includes President Eileen Bramlet, a former AOL senior vice president, and Chief Technology Officer Sean Kidder, a former AOL vice president. Jackson is going to need all the AOL expertise he can get his hands on to combat opposition from cell phone users.

Nearly 80 percent of respondents in a 2005 survey of 684 people told market research firm In-Stat that no type of mobile advertising is acceptable. The devil's always in the details, though, and about 15 percent of those surveyed said they'd be willing to receive targeted ads in return for reduced charges, discounts from advertisers or free services.

In-Stat wireless analyst David Chamberlain says Mobile Posse is taking the right approach with consumers. He estimates that less than 10 percent of consumers will opt to receive wireless ads as the market develops over the next two to five years.

"The fact that they've gotten a start like this, I'd say that it would put them head and shoulders above the rest," Chamberlain says. "First does not necessarily mean best or only, but it certainly gives them an advantage and the market a chance to see what it looks like."

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