In China new methods of advertising have been turning up everywhere, and Bluetooth media company Pioco has made mobile devices the newest outlet. The Shanghai based company has set up “hotspots” in hotels, shopping malls, and other commercial areas around the city where people can receive advertisements through their mobile device’s Bluetooth connection. About a week ago news broke that Pioco would be partnering with Coca Cola to serve mobile ads for the Olympics, so we spoke with CEO Steve Chao about the details and potential of the service.

Whenever someone with a Bluetooth enabled device enters a hotspot they receive a message asking if they would like to download Pioco content. If they accept, they are shown a video from Coca Cola, or some other partner company, and then given access to things like free movie trailers, music, wallpaper, e-coupons, and premium content from companies like Disney or MTV. The incentive program is only run in these hotspots, so the conversion rates have been much higher than in regular Bluetooth ad campaigns.

Chao explained that Bluetooth is the best execution angle in China because 3G functionality has yet to penetrate the market. He stated that Pioco is prepared for market change, and will adjust their strategies to accommodate other wireless technologies when the timing is right. In the near future he sees Pioco offering location-based browsing, and creating a centralized network to manage content and track usage.

Pioco sees its primary competition from E-Xing and many other, but differentiates itself by bundling advertisements with desirable content. The company was founded in 2006, has about 50 employes, and has received very little funding. Advertising partners include Coca Cola, Best Buy, Sony, and Chevrolet.