Starbucks, L'Oreal to trial location-based mobile marketing

O2 customers to get text and MMS alerts when they're out shopping

Starbucks and L'Oréal have announced they are taking part in a six-month trial of mobile location-based marketing using a service from O2.

The service, launched by the mobile network this week, will send SMS and MMS location-based marketing messages to the more than one million O2 customers who are signed up to O2 More.

Shoppers who have signed up to O2's More service will receive marketing messages based on their location
(Photo credit: Shutterstock)

O2 More is an opt-in service where O2 customers can record their personal information - including age, gender and interests, such as football, travel and cinema - and receive offers from companies based on the details they've provided. O2 More customers will now also receive offers based on their location.

O2's location-based marketing works by using geo-fencing technology - provided by US company Placecast - whereby certain geographical areas are 'owned' by particular brands.

Once a consumer steps into a particular brand's area, the geo-fencing technology will trigger an SMS or MMS to be sent to them containing an offer designed to bring them into a shop.

In Starbucks' case, O2 users who have registered an interest in food and drink will get an SMS offering them money off Starbucks Via coffee at a nearby branch when they enter an area owned by the coffee company. When consumers who have specified an interest in beauty enter a L'Oreal-owned area, they will be sent an SMS with a buy one get one free offer on L'Oreal Elvive hair care products at Superdrug.

O2 will limit the number of messages sent to each customer to a maximum of one per day.

Thanks to the rise of more feature-rich smartphones coupled with growing awareness of services such as Foursquare, the location-based advertising market is beginning to take off. According to predictions by analyst house ABI Research, the mobile location-based advertising market is set to be worth around $1.8bn in the US alone by 2015.