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O2 becomes first UK mobile operator to offer location-based marketing

by Scott Bicheno on 15 October 2010, 15:42

Tags: O2/Telefonica (NYSE:TEF)

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They know where you are

No sooner does Google reveal that it's already making a billion dollars per year through mobile advertising than mobile operator O2 announces it has launched the UK's first location-based mobile marketing service.

The service will allow advertisers to send marketing material to opt-in end-users, which is targeted on both a demographic and geographic basis. It aims to capitalise on one of the key unique features of mobile advertising - to focus on people that are physically close to the product or service. Starbucks and L'Oréal will be the first to give it a 6 month trial.

The ability to do this relies on a technology called ‘geo-fencing', which sends out a message to any handset that comes within the range of a geo-fence, that can be created around pretty much anything. The technology comes courtesy of US company Placecast, which also provided the image below.

Shaun Gregory, MD 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."

Here's O2's breakdown of how it works:

  • O2 customers register on O2 More, launched in December 2009, by inputting information about their age, gender and interests such as football, travel and cinema
  • When opted-in O2 More customers are 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
  • When opted-in O2 More customers are found to be within a geo-fenced area owned by L'Oréal, customers interested in beauty receive an SMS offering buy one get one free on L'Oréal Elvive hair care range at Superdrug
  • O2 protects its customers' privacy by not sharing data peer to peer
  • O2 does not spam its customers with irrelevant or frequent SMS or MMS - opted-in O2 More customers only receive a maximum of one SMS or MMS per day from O2 More
  • Customers can opt out of the service at any time
  • The service works on any mobile phone (not just smartphones) and does not need an app. It has no impact on battery life as all detection is done as part of the service O2 provides for voice and messaging
  • The service is not available to customers aged under 16 years



HEXUS Forums :: 8 Comments

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Gosh that is a great leap forward for mankind.
Who in their right mind would “opt-in” to be spammed by marketing organisations?
Those who want special offers? I can't see me using it though!
Unless they plan on offering incentives like money of your bill each month who in their right mind would do this?
If it's something I use on a regular basis & special offers are timed right (starbucks/costa first thing in the morning etc) I might be tempted. I would need some sort of incentive to use it though, beyond the special offers!