O2 launch location based marketing service

O2 have launched location-based service marketing service enabling advertisers to target individuals with SMS/MMS messages, based on their likes and their current location.

The new six-month location-based service trial is described as the first from a network “to offer large-scale location-based mobile marketing in the UK.” The first users of the trial will be Starbucks and L’Oréal.

The service uses location-based technology known as “geo-fencing” to power the trial and is the result of O2 Media – O2’s mobile marketing arm – partnering with Placecast, a Californian location specialist.

Placecast’s customers have included North Face, quick-serve restaurant, Sonic Drive-Ins and American Eagle Outfitters. Figures taken from Placecast ShopAlerts Pilot Studies 2009 show that 65% of customers who were part of initial programmes made a purchase as a result of an SMS and MMS, and 60% of participants found the location-based messages to be “cool and innovative”.

Shaun Gregory, Managing Director of O2 Media, said: “The growth of location-based services will create a golden age for proximity marketing. It fuels a growing expectation among consumers for personalised advertising via their mobile phones that is directly relevant to their passions. The market potential here is huge – it has already had massive success in the USA – and this is another nail in the coffin of the old model of reaching mass audiences in one go.”

The system works by using the likes, age and gender details logged by the million or so opted-in users of website www.o2more.co.uk. When a user is found to be within a geo-fenced area owned by Starbucks, those interested in food and drink receive an SMS offering them money off Starbucks VIA Ready Brew at a nearby branch.

O2 claims that opted-in O2 More customers will only receive a maximum of one SMS or MMS per day from O2 More and that it has no impact on battery life as all detection is done as part of the service O2 provides for voice and messaging.

We have a few niggles with the system, firstly, this is really only going to be an answer for big brands. For example if you’re advertising a Christmas toy promotion in Cardiff in your single shop then you’re unlikely to get too many customers, especially if a customer has just walked by one of the tens of Starbucks and L’Oréal vendors in the town.  More importantly SMS is not a time-guaranteed service, if the network is busy you maybe hundreds of yards away by the time you receive the SMS, and you’re probably unlikely to run back to grab the free coffee or a tube of hand cream. It’s a good start.