O2 signs Starbucks & L’Oréal to debut location-based mobile offers

O2 has signed deals with Starbucks and L’Oréal to be the first brands to undertake a six-month trial of its large-scale location-based mobile marketing platform in the UK.

The new system, believed to be a world-first for a mobile network, will enable brands to deliver relevant SMS and MMS to consumers in a more localised, targeted, engaging and effective way than ever before. 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 company who has trialled the software with small retailers in the US.

The service will also work 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.

Starbucks and L’Oréal will use the software to target consumers opting into the O2 More service to receive relevant messages dependent on their age, gender, interests and for the first time, their location. Over one million customers aged 16 and over are registered on the scheme, and only these customers will recieve the offers based on their interests.

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. For 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 says it is in discussions with several other brands, and claim interest is high in the service because it “immediately enables the UK’s favourite retailers and brands to reach over one million opted-in consumers on their mobile phones when they are in a mind-set to make a purchase. It enables brands to target their audiences better than ever before and give consumers relevant and targeted information and offers.”

Shaun Gregory, managing director of O2 Media, says: “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.”

Alistair Goodman, CEO of Placecast, adds: “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.”

Other clients currently working with O2 Media since it launched last year include Adidas, Cadbury, Blockbuster and Interflora.

Over one million customers have signed up to O2’s mobile marketing scheme – O2 More, which is delivering over 1,000 campaigns by leveraging O2’s unique customer data via O2 More and are based in London, working with all the major media agencies and brands. The company says it will now showcase the technology to these buyers and hopes to add more brands onto its trial list before going mainstream.

This story first appeared on Pitch, Centaur’s subscription-based online interactive marketplace for agencies and clients to share news, opinion and debate.

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