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DECEMBER 27, 2010

Mobile Makers Target Rivals on Phones

By EMILY STEEL And YUKARI IWATANI KANE

Mobile-phone companies are experimenting with a new way to steal their rivals' customers: the mobile insult to the device in hand.

Their new tactic involves mobile ads that appear when a person using a competitor's phone or network launches an application or browses the Web on their phone. The basic message: Oh, you could do better than that thing.

Nokia Corp. recently targeted ads for its Nokia Twist device at users of the Motorola Inc.'s Razr phone. Razr users who surf the Web would be dealt an ad saying, "Are you really still rockin' a flip phone?" It then suggests upgrading to a Twist, says Gene Keenan, creative director of mobile at Isobar, a digital marketing agency owned by Aegis Group PLC that worked on the campaign on behalf of Nokia.

In industry jargon, the tactic is called "intercept campaigning."

The maker of BlackBerry smartphones is another one that is dabbling in intercept campaigning. Research in Motion Ltd. has been advertising its BlackBerry devices with ads that entreat users of rival devices to "See the difference," according to a person familiar with the matter. RIM also is targeting ads to people using older models of BlackBerries that read: "Do more."

RIM declined to comment. Nokia couldn't be reached for comment.

In recent years, marketers have taken advantage of online targeting to show text ads when people search for competing brands or next to editorial content about rivals, like product reviews.

With the newer technology available, however, they can target ads to certain devices or certain networks--to reach people while they are actually using their competitors' product.

"The [wireless] market is saturated, and pretty cutthroat. There's not that much room to play," says Phuc Truong, managing director of Mobext, a mobile-marketing agency owned by French ad company Havas SA. "You can go after a new segment that doesn't have mobile phones, or you could refine and search for users that just are getting out of their two-year plans."

They are turning to companies like Crisp Media to help come up with the ads and Jumptap Inc., which allows brands to buy ads targeted at certain models of certain devices on certain networks. Crisp Media says it has helped Sprint Nextel Corp. come up with an ad to promote its Android phones on the iPhone.

Mobile ad firms like Jumptap use technology to detect the small programs and data that control a user's mobile phone when it is delivering an ad. That allows the ad company to determine the exact device that a person is using, whether it is a two-year-old BlackBerry 8800 or new iPhone 4.

The mobile ad firms have traditionally used this data to determine what format of ad to show so it fits on the screen but increasingly they are using it for ad-targeting.

Savvy marketers are even targeting phones that were introduced around two years ago, on the suspicion that their users' two-year wireless contracts might be about to expire.

Mobile companies aren't the only ones starting to target their ads to users of certain devices, ad executives say. Marketers seeking to reach business travelers have bought ads to appear on a BlackBerry while a person accesses the mobile site for Weather.com, for example. But wireless-service providers and phone manufactures themselves are at the vanguard of the new targeting as they fight for new customers.

Some mobile ad networks, such as Jumptap, disclose the device targeting practices in their privacy policies.

As the tactic has grown, some operators have tried to block their competitors from advertising on their devices.

Sam Altman, chief executive of Loopt Inc., a location-based social-networking app maker, said it has been asked by two operators to not display advertising from their rivals on their phones. Mr. Altman declined to say whether he acquiesced.

Write to Emily Steel at emily.steel@wsj.com and Yukari Iwatani Kane at yukari.iwatani@wsj.com