Ads on cellphones, privacy concerns grow

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: carriers.

Americans are finally using cellphones for more than calling, joining European and Asian counterparts in embracing data services like text messaging and ring tones.

Devices also are improving, and last summer’s release of Apple’s iPhone unleashed an era of bigger screens and friendlier interfaces for mobile web browsing. Advertisers, meanwhile, are starting to experiment with mobile ads. With a boom in GPS devices and location services like maps and child tracking, it’s only natural that advertisers, too, will want to take advantage of location information.

The phone’s highly personal nature will mean more privacy red flags compared with what’s collected when someone surfs the Internet from a regular computer.

Two industry trade groups—CTIA and the Mobile Marketing Association—have committees developing guidelines, including how to properly get a customer’s permission and periodically remind them of any tracking.

Companies are also developing ways to share profiles with marketers while stripping out sensitive information like names. On Sprint phones, all targeting to such attributes as age and postal code is done on Sprint Nextel’s end; advertisers give Sprint the ads for the company to place without having to share any data with anyone, spokeswoman Emmy Anderson said.

Meanwhile, an ad-delivery system from Ad Infuse can be installed entirely on a carrier’s own premises so that data remain under the carrier’s control. The wireless industry deserves credit for its caution, said Ari Schwartz, a privacy advocate with the Center for Democracy and Technology. He said advertising and technology companies are the ones having to first prove to wireless carriers “that they have put in a lot of thought about how to do it in a way that won’t raise the creepiness factor.”

Telecom firms face unique federal privacy regulations, requiring notice and permission to use and share calling records for marketing, but carriers believe competition is as important. “We have great expenses with customers leaving one company and going to another,” Verizon Wireless spokesman Jeffrey Nelson said. “One thing I can guarantee Verizon Wireless will not do is get a bump of short-term advertising dollars while scaring and losing our customers in the process.”