UK Carrier O2 Teams with Placecast for LBS Opt-In Marketing to a Million Consumers

UK carrier O2 today announced that it has teamed up with Placecast to deliver geofenced (proximity based) SMS and MMS shopping alerts and offers on an opt-in basis to UK mobile subscribers. This is a version of what Placecast has been doing in the US market with its successful ShopAlerts program

Carrier O2, which is owned by Spain's Telefonica, already has an opt-in marketing program called "O2 More," with roughly a million members receiving "exclusive offers from brands." Overall O2 says it has a UK customer base of 22 million. Placecast now brings the carrier the ability to deliver locally relevant offers at scale as part of O2 More.

O2 sells the ads and Placecast provides the hosted infrastructure, through a new European data center. Offers are reportedly capped at one per day and customers won't receive the same message twice. Consumers must also have opted-in to the particular shopping category (e.g., health + beauty, food + drink, etc) to receive specific offers. 

Placecast CEO Alistair Goodman told me earlier this week that "This is the first time a carrier has deployed an LBS marketing program at scale for a large number of users." I asked him about interest from other carriers, which I expect will spike after news of this program gets out.

He said, "We’ve seen enormous interest from carriers and from those who’ve aggregated large audiences from all over the world. This is a way to take your brand strategy and extend it into mobile without building an app."

The first two announced brands to take advantage of the geofencing component of O2 More are Starbucks and L'Oreal. The programs they'll be running are the following:

  • O2 More customers entering the Starbucks geofenced areas (who've opted in to food and drink) will receive an SMS offering them money off Starbucks VIA Ready Brew at a nearby Starbucks store (this will also include grocery stores later)
  • O2 More customers within a geofenced area owned by L’Oréal (opted-in to beauty) will receive an SMS offering buy one get one free on L’Oréal Elvive hair care range at Superdrug.

Here's an example of one of the L'Oreal alerts:

 Screen shot 2010-10-14 at 3.32.53 PM

Previously Placecast reported that "65% of customers who were part of the [US ShopAlerts] beta program made a purchase as a result of an SMS and MMS." Though this occurred during the early testing, these results are really impressive. 

Carriers have flirted with mobile couponing in the past but the O2 More program and its new geofencing/LBS angle (through Placecast) create a model that could help reestablish the carrier's relationship with the consumer and generate considerable ad revenue at the same time. It also utilizes carrier-consumer data for greater targeting relevance -- all in the context of an opt-in program (which makes it more effective). 

It's a model that US carriers should look carefully at and strongly consider. Indeed it's a lot better and more interesting than trying to force people onto a "deck" that is no longer relevant to most mobile users.