AT&T Launches First ‘Scalable’ LBS Marketing Program with Placecast

This morning AT&T and Placecast announced that the mobile carrier will offer geo-fencing-based “ShopAlerts” in New York, LA, Chicago, and San Francisco. ShopAlerts were launched about a year ago by Placecast and a similar carrier program, powered by Placecast, has been running in the UK with carrier O2 since October. O2 is owned by Spain’s Telefonica.

The concept and mechanics for users are quite simple: they first opt-in to receive the MMS or SMS-based alerts, which are triggered when they enter the designated “geo-fenced” area. The ShopAlerts contain text-based (or text and graphics) promotions, offers and coupons from advertisers. The messages can have branded elements or contain links to the mobile Web.

Initial advertisers that have signed on with the program include: HP, Kmart, JetBlue, SC Johnson, Kibbles ‘n Bits, Nature’s Recipe and the National Milk Mustache “got milk?” Campaign.

This is significant on several levels. As I argued at the time the O2 deal was announced last year this makes carriers relevant to mobile marketing and advertising other than simply as location or other data providers. Privacy is a non-issue here because users have opted-in.

Opt-ins can be obtained or driven by any media: in-store signage, TV or print ads, Facebook pages and so on. It thus is a way to use social media or traditional media to drive mobile marketing. The program can be used both for loyalty and new customer acquisition.

Performance of these campaigns can be extremely effective. The original beta version of the program with selected retailers in the US last year yielded impressive results:

• 60% of participants found the location-triggered messages to be cool & innovative
• 79% said it increased their likelihood to visit a store
• 65% made a purchase as a result of a ShopAlerts message
• 73% of participants would definitely or probably use the service in the future

People often forget about the value and importance of SMS, which has near-100% penetration among mobile users and significantly greater reach than apps or the mobile Web. Accordingly this is an LBS marketing program that delivers the kind of potential scale and reach that brands and agencies have been clamoring for (and complaining was missing). AT&T has 95 million subscribers in the US (again, doesn’t matter if they have smartphones).

ShopAlerts can be used to deliver deals/offers that drive people into local retail stores. But it can also simply be used to target people in particular markets (e.g., by Jetblue trying to promote a discount on a particular route). It’s a location-based mobile marketing program that will work for national brands and retailers alike.

I was told recently by Placecast CEO Alistair Goodman that opt-out rates in the UK for the nearly identical program with O2 are extremely low. Expect other carriers in the US and Europe to roll out similar programs in the not-too-distant future.