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O2 rolls out location-driven, time-targeted, SMS-based mobile ad service with Starbucks and L’Oreal as launch brands

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UK operator O2 has gone live with a location based SMS ad service that pings opted in consumers vouchers and other information regarding specific stores and products when the consumer enters a ‘geo fence’ around that store. The launch customers are Starbucks and L’Oreal and O2 already has 1million people opted in following a soft online launch in late summer.

Called O2 More, the service has been developed in conjunction with Placecast, which runs similar location triggered couponing and vouchering services for leading retailers and MNOs in the US. The service is interesting as it can be adapted to a specific store and specific offer and uses text to reach as many consumers as possible. It offers location-time-relevance triggering and adds a whole new dimension to mobile advertising.

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.”

Starbucks has so far built 800 geo fences around stores all over the UK and is using the O2 More service to launch Starbucks Via, its brand of instant coffee. Opted in users – who when they sign up to O2 More online can select what sorts of offers they are interested in receiving – will then be sent a 50p off voucher to their phones as they pass through the geo fence around one of the Starbucks stores. If they have a smartphone, they get a nice colourful MMS. If they have a non-feature phone they just get a text.

L’Oreal meanwhile is doing it around the launch of a new shampoo and has had its geo fences built around branches of SuperDrug. When consumers enter here, they get a similar experience to Starbucks.

In each case the voucher is redeemed simply by showing it to the shop assistant. In future, when the infrastructure is in place for wide scale mobile coupon and vouchering, they vouchers will have a more sophisticated redemption channel, says Placecast.

Ray Conway, Starbucks UK & Ireland’s director of Consumer Packaged Goods said: “Our experience as a pioneer in social media has taught us that customers want to find Starbucks in new ways. We’re proud to be one of the first companies in the UK to use this innovative technology to offer discounts for customers who are close to supermarkets and our coffee shops where Starbucks VIA Ready Brew is sold.”

Hal Kimber, head of CRM for L’Oréal adds: “We’re very pleased to be participating with O2 on the launch of this service. The opportunity to deliver timely, relevant communications to L’Oréal Paris’ various target audiences through the platform is very exciting for us and the learnings will be invaluable for our CRM initiatives going forward. In future mobile will undoubtedly become one of, if not the key channels for developing consumer relationships and we are really excited to be working with O2 from the beginning on this.”

Since its launch one year ago O2 Media has provided personalised media opportunities for brands including Adidas, Cadbury, Blockbuster and Interflora by leveraging O2’s unique customer data via O2 More. Success stories include a NatWest campaign that targeted its app at iPhone owners, which received a 26% response rate, while targeting families with teenage children gave Thorpe Park a near one-in-three download rate for its app. O2 Media has since expanded into new areas, like Top Up Surprises and Priority, to offer brands unique and innovative solutions that stand out from the traditional clutter.

Placeacast, which build the service and has white labeled it for O2 More, has already had huge success in the US with brands such as North Face and American Eagle Outfitters. Alistair Goodman, CEO of Placecast, said: “O2 is one of the most innovative mobile carriers in the market and we are pleased to be partnering with it to bring location-based mobile marketing to the UK. The service allows consumers to go about their day and automatically alerts them when they are near a special offer available at their favourite retailers. This is truly marketing as a service to consumers, not an intrusion, enabling people to connect with brands at the right place and in real-time, all via their mobile phone.”

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