You've Got . . . an Ad?
Although many entrepreneurs are still waiting cautiously to jump into wireless advertising, some early birds have already taken the leap. Companies like PlanetHopper, founded by Rachel Barenbaum, 24, make the move easy. Where you see a mobile phone, Barenbaum sees a forum for hot digital deals. Customers of the New York City start-up frequently receive SMS (short message service) alerts on their mobile phones. These alerts consist of customer-tailored offers-such as discounts for merchandise of a favorite sport-that are usually valid for a limited time.
"We are about capacity control," says Barenbaum. "Consumers want to save money buying cool stuff, and sometimes merchants have excess capacity. We send out an alert to cell-phone owners who have opted in. It's win-win." SMS alerts work so well because although not all phones can surf the wireless Web, almost all new models sold in the United States are SMS-capable.
If users decide the messages they receive aren't helpful, they simply reset their interests. PlanetHopper's job, stresses Barenbaum, is to deliver timely alerts-but only to folks who want to receive them. "People carry their cell phones everywhere now, so you can reach them just when they are planning a night out," she says.
Climbing aboard this advertising revolution costs next to nothing. Barenbaum says as little as $35 will buy 10 targeted messages per month. Plus, they're easy to create: Assembling one takes nothing more than typing out a short message.
For now, PlanetHopper leans toward entertainment, movies and sports, but Barenbaum indicates the business model is wide open. Currently negotiating with national advertisers, the company plans rapid expansion.
Robert McGarvey is the author of How to Dotcom (Entrepreneur Press).