I just have to take issue with what appears to be the consensus view on this debate - perhaps best represented by Jonathan's statements -
"A service where people 'put up with the ads' is fundamentally broken" and "Sustainability can only be found where that DOES NOT happen.".
Personally I'm quite sure that mobile advertising will take a different form from what we are seeing currently on wap (links, banners and SEM) because when a new medium emerges, ad formats change to take advantage of it. Currently, we're effectively replicating the web model. History suggests that this will change - though I do not think we yet know what to (I'd love to be involved..). So I agree with (what I think is) the basic premise of the conversation that mobile advertising will not stay as it is.
Where things go a bit pear shaped in the debate is the idea that people will not and should not "put up" with ads? So what exactly have they been doing in newspapers, on TV, and on the internet for years now? Just because screening technologies may exist does not mean that they will be used. They are available on the web but very few people use them. I can bet some people on here do, but the wider market simply does not
. The evidence? Internet advertising is the fastest growing ad category of all and has been for several years. If it didn't work for advertisers it would be dead by now.
We have inbuilt screening. Driven by our brain and our eyes. Or else ads in newspapers would be outrageously effective. The mobile is just not that different - a simple Admob style text ad does not massacre the screen real estate (for while I thought they would but the truth is that they do not - and I'm obsessive about user experience.)
Then there is the targeting evangelism we've been hearing: unfortunately several factors mitigate against this.
1. Users (in my experience) are happily lazy: they are most unlikely to spend time adjusting filters to discriminate what they like and do not like. Have we learnt nothing from the relative failure of personalised portals on the web?
2. Advertisers are just not very good at it. If they choose to find out they can get an enormous amount of information about me just from my postcode - it's largely guesswork but pretty well informed. Nonetheless the junk mail I get is still woefully off target. Even on the web it's pretty hit or miss: I subscribe to a cycling discussion and remember when we got hit with dieting ads....ho ho.
Advertisers are constrained by time and ability. They'll always make do with imprecision because practically they cannot create micro offers for micro markets. However much it sounds cool and like a great use of technology.
3. Ads support media. It's OK and not a crime.
4. Users generally do not mind - yes I know we all bitch about stupid ads on TV or the radio or pop-ups....but really deep down people do not mind like they do, say about being ripped off, or awful usability, or muggers. Because they know that ads (and not very well targeted ads) are part of the equation of modern life. Two anecdotes: first time I got a rogue spam sms I was with my teenage daughter and complained - her response - "get over it dad, it happens:)". Secondly I've talked to users of Flirtomatic in its early days. They all wanted to know how we going to make money. I told them ads were to be part of the equation. The response? Yeah, that's cool, of course.