Placecast Teams with Alcatel for Lo-Mo Ads

1020 Placecast and Alcatel-Lucent have teamed up for opt-in location-based mobile advertising, and specifically opt-in “geo-fencing.” Here’s how the release explains it:

As part of this service, 1020 Placecast leverages its unique ad engine to weave location information into highly relevant messages — enabling brands and advertising agencies with scalable, proximity marketing campaigns that will be pushed to consumers’ mobile devices in SMS and MMS formats. Alcatel-Lucent, leveraging its Geographic Messaging Services Platform (GMSP) as a hosted service, tracks opt-in subscribers’ locations on behalf of the service provider and pushes mobile content to the subscriber when and where is appropriate – based on the advertising campaign developed and managed by the 1020 Placecast platform.

Consumers will encounter the prompt to opt-in to receive these ads/messages in several ways. It could be in online ads, on a retailer website; it could be in-store — any number of ways.

Once they opt in they will be targeted with messaging if they enter the advertiser’s specified zone (e.g., within two miles of Palo Alto Shopping Center). This is the “geo-fence.” Alcatel-Lucent’s technology will convey the user’s mobile location to Placecast, which will serve the relevant brand/retailer message or ad (based on the user’s opt-in preferences) when the user gets within the zone.

The old LBS “fantasy” was the “Starbucks Coupon scenario”: you’re walking by a Starbucks and they beam you a coupon. This is a more sophisticated version of that scenario. The difference here is that users have previously opted-in to get the advertiser’s message (so it’s a mixture of push and pull). The objective is to drive in-store or real-world traffic.

There are lots of SMS based ad and opt-in mobile advertising and loyalty programs today (see, e.g., SmartReply). The geo-fencing precision is the novel dimension here.

In my research with Local Mobile Search we continue to ask consumers about their attitudes toward and interest in mobile advertising in various forms. In the abstract consumers often say they don’t want ads on their mobile phones. Consumer receptiveness to mobile advertising is a long discussion but the responses change if they’ve had experience with mobile ads and/or you show consumers a concrete benefit. This question was asked in Q3 2008:

Source: Opus Research/LMS (8/08, n=789)

Believe it or not this 43% number is very favorable. Over time consumer receptiveness to mobile marketing and advertising will continue to gain partly contingent on its presentation. There’s a much longer discussion here that I won’t get into now.

This Placecast program is a taste of the sophistication to come with location-based ads on mobile devices. The problem is not so much consumers or privacy concerns. Rather advertisers and agencies in general lag way behind both consumer adoption and the technology. From the WSJ piece on the Placecast and Alcatel-Lucent deal:

Ad executives say they need to see more research on how targeting ads based on location translates into sales.

“The question is always the same: Can we drive more sales?” says Alexandre Mars, head of mobile advertising at ad holding company Publicis Groupe and chief executive of its Phonevalley mobile-marketing agency.

In a year or so this question won’t be asked any more.

LBS is already real and, as I just said, it will become more central to online and mobile advertising going forward.

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If you want to hear a discussion on LBS advertising online and in mobile you can listen to the recorded webcast on the Placecast site and look for this module in the lower right (roughly an hour).