O2 launches UK’s first location-based mobile marketing via partnership with Placecast

O2 has become the first network provider to offer large-scale location-based mobile marketing in the UK, enabling brands to deliver relevant SMS and MMS to consumers. Starbucks and L’Oréal are the first brands on board for the six-month trial, which relies on consumers opting into the service to receive relevant messages dependent on their age, gender, interests and for the first time, their location.

With the launch, O2 immediately enables the UK’s 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. 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 whose tried and tested platform has transformed the mobile marketing industry in the USA.

Placecast’s customers have included The North Face, quick-serve restaurant, Sonic Drive-Ins and American Eagle Outfitters. 65% of customers who were part of initial programmes made a purchase as a result of an SMS and MMS, and 60% of participants found the location-based messages to be “cool and innovative”. (1)

The partnership combines Placecast’s location-based experience with O2’s customer base of over 22 million, its network and O2 Media’s strong relationships with brands and ad buyers. 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, 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.”

How it works:

  • O2 customers register by text on mobile or on O2 More’s website www.o2more.co.uk, launched in December 2009, by inputting information about their age, gender and interests such as football, travel and cinema
  • 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
  • When opted-in O2 More customers are found to be within a geo-fenced area owned by L’Oréal, customers interested in beauty receive an SMS offering buy one get one free on L’Oréal Elvive hair care products at Superdrug
  • O2 protects its customers’ privacy by not sharing data peer to peer
  • O2 does not spam its customers with irrelevant or frequent SMS or MMS – opted-in O2 More customers only receive a maximum of one SMS (text message) or MMS (text+picture message) per day from O2 More
  • Customers can opt out of the service at any time
  • The service works 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
  • The service is not available to customers aged under 16 years

Since its launch one year ago, O2 Media has provided personalized 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.

Ray Conway, Starbucks UK & Ireland’s director of Consumer Packaged Goods described their thoughts on the service: “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 is excited about the opportunity: “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.”

Alistair Goodman, CEO of Placecast, stated the company’s thoughts on the partnership: “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.”


(1) Figures taken from Placecast ShopAlerts™ Pilot Studies 2009. More information on this can be seen here:http://placecast.net/research/Placecast-ShopAlerts-Pilot-Studies.pdf