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Wireless, Interactive TV Advertising Opportunities Limited

NEW YORK, Feb 20 (Reuters) - Small and fragmented audiences on wireless products and interactive television in the United States will limit advertising opportunities on devices beyond the personal computer over the next four years, despite the recent hype about these vehicles, Jupiter Media Metrix said in a report released Tuesday.

The audience using post-PC platforms, such as wireless devices, interactive television and Internet kiosks, will reach critical mass by 2005. The personal computer, however, will continue to dominate with a 74 percent Internet household penetration, the research firm said.

``I think a lot of them are interesting for some companies to keep an eye on, but almost nobody should be pouring a lot of money into these platforms in the near-term,'' said Mike May, senior analyst at Jupiter.

Current penetration rates for some of these platforms do not justify the research and development costs for interactive advertising, he added.

Marketers targeting the post-PC audience should view them as distinct groups of individuals with similar behaviors and attitudes that stem closely from their use of any Internet-enabled device instead of the more common audience segmentation characteristics of demographics, geography and gender, the report said.

Although 77 percent of advertisers spent nothing on wireless advertising last year and 82 percent spent nothing on interactive television, only 36 percent plan to spend no money on ads this year for wireless devices and 57 percent for interactive TV.

But Jupiter expects to see only modest revenue increases for post-PC platforms in the near future. By 2005, the research firm expects online ad revenues to reach $16 billion while interactive TV ad revenues will comprise only $4 billion and wireless ads $700 million of the total pie.

While wireless ads have the advantage of immediacy, the lack of standards, fragmented audience and unclear return on investment will inhibit the growth of marketing on wireless devices, the report found.

***Editor's Note***
For related article see Interactive TV sparks ad cuts from the Financial Times

Originally from http://biz.yahoo.com/rf/010220/n20651432.html

Posted on 26 Feb, 2001