LONDON (AdAge.com) -- Cellphone operators are muscling in on location-based marketing -- usually the preserve of specialists such as Foursquare -- and the two biggest U.K. mobile companies, Orange and 02, are competing to be leaders in the field. O2 has a big head start, with deals with Marks & Spencer, Starbucks and L'Oreal, but Orange won't even discuss its plans except to say the company is entering the new area this year.
02's first deal with leading retailer Marks & Spencer offers customers a free smoothie if they buy a particular sandwich or salad at the store. To redeem the offer, customers quote a unique product code from the text message.
The 02 service sends targeted SMS or MMS messages to customers when they enter areas that have been "geo-fenced" by brands, retailers or services. To receive a message, customers must be older than 16 and have signed up for the 02 More program, which invites them to state products and services of interest, age and gender, and promises to send out no more than one text a day. More than 1 million people have opted in so far, out of 02's customer base of 22 million subscribers.
02 went live with location-based SMS toward the end of last year, when it launched programs with Starbucks and L'Oreal. Starbucks has built 800 geo-fenced areas in the U.K., and used location-based marketing to promote the launch of its Via instant coffee range in October 2010. The L'Oreal deal was put together with pharmacy chain Superdrug, and included messaging buy-one-get-one-free vouchers for the Elvive hair care range.
Neither Starbucks nor L'Oreal would comment on their first experiments with location-based marketing. At the time of the launch, L'Oreal's head of CRM, Hal Kimber, said, "In future mobile will undoubtedly become one of, if not the key channels for developing consumer relationships."