Call it another first for the Japanese mobile market in a decade of convergence devices. A government rule forcing handset makers to include GPS (global positioning) chips in all new (3G) handsets is empowering advertisers to create proximity-based advertisements pushed to subscribers when they get in range.

Steve Sechrist
Senior Analyst and Editor
Projection Monthly

Imagine, you get off the train in a Tokyo suburb at lunchtime. Instantly, a host of messages respond to your recent inquiry-"show me the closest noodle shop"-with an area map direct to the cell phone, complete with advertisements and even a coupon or two to try out the new tori toji Udon (chicken with egg and udon noodles).

Gen Mizayaki, president of Cirius Technologies Inc. says his new "AdLocal" service the GPS powered 3G cell phones will "dramatically change the way on-line ads work." According to Mizayaki, the technology supports on-line ads over a 3G network in a 1 Km radius of the advertiser.

Cirius gets paid by registered companies who set their own fee level, starting at 25 yen ($0.20 minimum) per click. It’s a competitive bidding process that allows advertisers in a crowded market to bid up the per click price with incentives that include ad frequency and ad space on the cell phone display. The company claims advertisers can reach 100M unique users who subscribe to 3G services from DoCoMo, Au, and Softbank.

Beyond advertising, Cirius Technologies also offers a proximity-based "community service" called Activo. It is based on MoSoSo (mobile social software) that allows users to broadcast present location information to registered friends that are pre-invited to participate. A search function allows users to look for friends actively broadcasting their location within their own proximity to easily connect.

The idea (albeit not GPS based) perhaps began in the US with dodgeball.com, a social web based start-up founded by NYU graduate students, Dennis Crowley and classmate Alex Rainert as a senior thesis. Dodgeball expands the proximity concept to include the location of friends of
friends through a pre-GPS era "check-in" process that uses text messaging to send location information. In its first year, dodgeball.com claimed 16K users in over 20 US cities. Dodgeball.com is destined to grow that much faster once GPS cell phones become the norm-eliminating the need for the check-in process.

Our take, embedding GPS technology in cell phones is opening up a plethora of new services with the potential to take adverting to new heights in pinpoint accuracy, and move social networking off the desktop and on to the street. But that’s just the beginning. The high volumes in handset sales (over 1 billion units sold last year alone) will help drive out the cost in the GPS chips and underlying technology, and free up low cost products aimed at new markets and applications beyond our wildest dreams-all ushered in by the decade of convergence.