The U.S. market for advertising on wireless devices may be almost non-existent, but that isn’t forcing Avesair into retrench mode. Instead, founder and Chief Operating Officer Kimo Kong is ramping up efforts to win business in Europe and Asia while planning for better days in the United States in 2003.
“In Europe and Asia, we’ve seen the start of mobile marketing and content delivery, and it’s really taking off,” Kong says. “In Latin America and North America, it is poised to start. I’m still very, very optimistic that 2003 is the breakout year.”
In Kong’s line of business, a little optimism is probably welcome. During the second half of 2001, it became painfully clear that the U.S. market simply wasn’t ready for ads and marketing messages to be delivered to cellular phones and other handheld wireless devices. In the face of declining ad budgets, marketers were none too eager to pump millions into an unproven vehicle for ad delivery. And about the last thing consumers needed was yet another stream of advertising messages they weren’t asking for.
Privately held Avesair, which provides mobile application software that enables wireless carriers to deliver targeted messages, is less vulnerable than other wireless marketing technology providers because of how conservatively the company is managed, Kong says. With 35 employees, Cary-based Avesair has expanded only as its customer base has grown. That meant no major ramp-up in spending last year, and it also meant no layoffs or management shakeups.
“It’s what we call an ‘opportunity approach,'” he says. “We built the company as we built our customer base, so we didn’t overextend ourselves. Right now what we’re focused on is providing the technology and meeting market demand.”
The News & Observer reported today that Avesair also had gone into acquisition mode, acquiring RTP rival WindWire.
Spun out of Massachusetts-based Engage Inc. in November 2000, Avesair secured $16 million in initial funding from Nokia Venture Partners, an investment unit of the big mobile phone equipment company, and New Things Ventures, a New York venture capital group.
The company’s initial customer base is heavily weighted toward wireless marketers and operators in Europe and Asia, where the wireless market is considered to be more advanced. A typical customer is London-based Enpocket, which in turn provides mobile media services to British Telecom.
Kong expects most of Avesair’s short-term opportunities to continue to be overseas. Through direct sales offices in London and Singapore and with partner offices in Japan and Korea, the company is well-connected to major wireless carriers and media providers. A partnership with Nokia doesn’t hurt matters.
Aiming for relevance
As for the U.S. market, Kong anticipates consumer acceptance of mobile marketing and content to grow slightly this year and take off in 2003. The great challenge for wireless service providers will be to ensure that ads and other content are targeted and relevant – for example, using Internet access to call up a restaurant review and finding a coupon for dining at that restaurant.
Another factor that will help mobile marketing catch on in the United States, Kong says, is the development and acceptance of more Internet-enabled handheld devices.
Until these boosts to the mobile market take place, Kong won’t be worrying too much about Avesair’s ability to wait it out. Instead, he’ll be going after as much global business as possible.
“You’re starting to see a build-out (in Europe and Asia), with trials and tests and independent results, which will serve as proof statements. When we created this company, we looked around the world and asked, ‘Where are the best places to create proof statements?’ Europe and Asia were the best.
“2003, when we’ll have those proof statements, is when you’ll see this really start to explode.”