Are consumers ready for tailored ads?

Mini drivers in the US are being greeted by name when they pass digital posters (MW last week) in the latest example of “proximity marketing”. However, the campaign has reignited the debate about the intrusive nature of hi-tech interactive marketing.

Drivers have to register for the Mini campaign, giving their consent. When they sign up, they are given a personalised key fob with a radio chip which the posters detect.

Similar chips will feature in other consumer devices such as mobile phones, personal digital assistants (PDAs) and laptops, and many London commuters already have one inside their Oystercard.

LG Mobile launches its Shine phone with a radio chip this week, and John Bernard, the company’s UK head of marketing, says LG hopes to send owners personalised ad messages when they pass shops, but only if it is “pull marketing [consumer initiated] rather than push.” However, there is a fundamental difference, in perception terms at least, between consumers using chips for smartcard-based payment systems and marketers tracking their behaviour and targeting them with ads.

Passing acquaintance
Rachel Harker, of marketing technology company Hypertag, says technology could be developed to recognise individuals passing a poster and then send them tailored ads. But she adds: “I don’t think either consumers or advertisers are ready for it.” Furthermore, European Union-wide privacy regulations mean such ads could only be sent to consumers who had already consented to receive them.

The law has yet to fully catch up with technology, as demonstrated by the position of Bluetooth. The technology has been used to send ads in the past, but many argue that most campaigns have been illegal. The Privacy and Electronic Communications Regulations (2003) say that electronic communications, including Bluetooth, can only be used for marketing to consumers who have given prior consent.

Bluetooth campaigns – such as the test by Maiden Outdoor which saw commuters at London rail stations downloading a sample track from a Coldplay album – have relied on the argument that consumers give implicit consent by leaving their phones on and “open”, and by physically entering a designated area. The Information Commissioner’s Office (ICO), which administers the regulations, disagrees with that interpretation but there has been no court case yet to establish what the law actually means.

Hypertag has a system which only sends communications to Bluetooth owners who change the name of their devices temporarily to indicate consent. A recent campaign saw clips from the new James Bond film Casino Royale sent to consumers with phones called “Bond”.

Robert Dirskovski, head of interactive at the Direct Marketing Association (UK), believes that such a system would pass the consent test, but adds/ “Just because you have your Bluetooth on and in open mode is not enough to indicate consent.” Some Bluetooth marketers, however, deny there is any problem with using Bluetooth for unsolicited advertising. Toro Blue, which sells Bluetooth broadcasting systems to retail outlets, claims the system can be used to send electronic business cards to Bluetooth owners who enter a building or who walk past on the street. The latter – broadcasting to passers-by – would be illegal, according to the ICO’s interpretation.

Matter for interpretation
However, Toro Blue founder Gregor Isbister says: “That’s its interpretation. I have a different interpretation.” He believes the regulations do not apply to Bluetooth, as it is broadcast and does not involve any personal information, while advertising communications are not stored on the handset and disappear if the consumer ignores an initial prompt. He adds: “If you don’t know a message is being sent, you probably won’t even notice it. It only really works if you’ve been alerted to the message beforehand.”

Bluetooth aside, there are other systems that allow marketers to send tailored ads to consumers on the move. But the question is whether UK consumers are ready for such an intimate approach.

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