Wednesday, March 02, 2011

Location-Based Marketing: Useful or Invasive?


Not sure if this is really cool (professionally), or a little creepy (personally). Let’s talk it out.

With new announcements from AT&T and Loopt, location-based ads will start to be pushed onto phones, offering a new way for advertisers to target ustomers.

Loopt’s "Reward Alerts" sends mobile ads and offers to users' phones to notify them of nearby deals, via a special smartphone app. Cons

umers present the message at the POS to redeem the offer.

AT&T’s “ShopAlerts” program sends a text message ad to users near a specific location. Because it’s an SMS function rather than an app, it’s open to non-smartphone users. It will offer rewards/coupons via a "geo-fence," a virtual-perimeter around a retail location/event/geographic area. Customers get alerts when they are inside this geo-fence. The texts will also include info like weather, traffic, and local shopping area details.

Now, mobile advertising has been location-enabled for some time. Google uses location to target advertising displayed with mobile search results, and mobile social networks (i.e., Foursquare) may display specific ads when a user "checks-in" at a store.

But, in this case, by pushing out advertising actively (initiating action without consistent user input), new services venture into territory that was previously unreachable.

But let’s take a step back for a moment. As a marketer, this is really cool, and something that I can use. As a consumer, it’ll be useful as well, if I don’t get 1) inundated and 2) inundated with crap/spam. It could get old very quickly. Also, take this example from Minority Report:

There’s a scene where Tom Cruise’s character is traveling through a Gap, and later a mall, where he is constantly accosted by virtual salespeople who know his name and purchase

preferences by his retina scan. Useful, yes, if you get a good hookup. But do you want to be that traceable? Does it matter?

That’s not to say retina scans are bad – Captain Kirk used one to secure the plans for the Genesis Project (which I can’t BELIEVE I can’t find an image of!). However, I don’t plan to be doing any terraforming anytime soon, so I’m more concerned with the marketing potential. So back to that.

There are a few stumbling blocks to engage consumers with this; much like the Scanner dilemma, they need to opt in to a particular service, so there’s going to be a bit of a land grab. Also, there’s a fine line between useful and obnoxious, and if a service crosses that, consumers will switch, or bail entirely. I’m not sure AT&T has the customer-service track record or feel for their customers to stay in the Nice Zone. Will anyone?

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