LBS, Consumers and Control of the Mobile Experience

This article originally appeared in the Feb. 2012 issue of Next Gen Mobility

Location-based marketing is the key to unlocking the next phase of growth for mobile operators. It’s also the tool for carriers to combat the over-the-top plays from Apple, Facebook (News - Alert), Google, and Microsoft. The technology is fully formed and deployed to do this at scale today. The challenge is designing a user-friendly service that consumers find really valuable, not intrusive.

Since the earliest days of the Minitel in France two decades ago, I’ve devoted my career to designing digital and mobile service offerings for consumers. The lessons I’ve learned about simplicity, ease of use and personalization have been core to creating Placecast’s ShopAlerts platform, the first global scale location-based marketing and offer management solution for mobile operators, brands and payments companies. ShopAlerts is designed to drive consumers into physical environments using geofencing technology to send relevant mobile alerts. The market opportunity for such a service is enormous, since 95 percent of purchases in the U.S. – more than a trillion dollars – are in brick-and-mortar stores.

ShopAlerts is live today in the U.S., Europe and Asia. With 8 million active users in the U.K. alone, it’s become increasingly clear that innovative mobile operators like Telefonica’s O2 (News - Alert) and AT&T have discovered the recipe for success: a subscriber base of millions, combined with a user-friendly experience that consumers see as a valuable service. O2 subscribers receive special deals and benefits for being loyal customers. Brands participating in O2’s program include Cadbury, House of Fraser, L’Oreal, Marks & Spencer, and Starbucks.

The program works on any phone – over 300 million in North America. This ubiquity is especially important to our mobile operator partners looking for mass-scale adoption. When an opted-in consumer is found in geofenced areas, he or she receives a ShopAlerts message with an offer. Messages can be delivered via SMS, MMS, dynamic display ads, mobile landing pages, and in-app push notifications, even when the app’s not open.

Mobile operators have three assets uniquely suited to the delivery of LBS. First, they have the ability to locate any phone on their networks in real time, without an app being on. Second, they have a trusted relationship with users; a consumer may not love his or her carrier, but he or she trusts them not to share personal information with others. Third, they have a large potential audience with an always-on device out in the physical world. 

LBS delivers on the promise of a valuable service by following a simple formula that’s emerging as a standard from the MMA and CTIA (News - Alert). Users choose to join a program and share their location data in exchange for receiving valuable offers. Operators agree not to resell or share that information for any other purpose. Consumers select products and services in which they’re interested, and the information they may want to share, and even times of day and week that they want to receive content. At Placecast, all data is anonymized and encrypted, and dumped after it’s used.

Placecast aggregate data shows that consumers are receptive to location-based marketing:

·         74 percent of participants like the fact that their location is used to deliver messages;

·         53 percent reported visiting a specific retailer after receiving a location-based alert; and

·         22 percent reported making purchases at participating retailers based on receiving location-based alerts.

The launch of Google (News - Alert) wallet and the complexity of ISIS/other wallet initiatives have made one thing clear: There is little money to be squeezed out of transaction fees, and Google will likely pass through the cost of payment processing, opting instead to make money on location-based offers. The opportunity presented by mobile wallets is really about commerce – driving real-world leads for retailers, and valuable offers for consumers. Relevant location-based offers can be linked to a credit card or appear inside a mobile wallet today. When a consumer can purchase with a single click, or even receive a discount automatically on their monthly statement just for being a part of a mobile operator loyalty program, new value is created for everyone in the ecosystem. Consumers get discounts just for being loyal customers; brands can drive traffic to their stores and measure ROI in real time; and credit card companies, issuing banks and carriers get new revenue.

The sheer size of the daily deals and mobile advertising markets is the prize. According to analysts BIA/Kelsey and Borrell, the daily deals market will approach $4 billion over the next four years, while mobile proximity marketing could generate another $6 billion during the same timeframe. With their user data, real-time location information and trusted relationship with consumers, carriers have a unique opportunity to answer the threat from Google, Facebook and others in the battle for mobile marketing dollars.

Anne Bezancon is the founder and president of Placecast (www.placecast.net).