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O2 hits button on location-based ads

Coffee'n'shampoo straight to your phone. Kinda

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O2 is to start pushing out SMS and MMS advertising, based on where you are and without requiring smartphones or apps - though the operator promises it will be an opt-in service.

From today O2 customers who have signed up to O2 More will receive messages pushed from Starbucks and L'Oreal, regardless of their handset or contract, but only when they pass through locations pertinent to those companies in a development that's been far too long coming.

O2 is very keen to emphasise that O2 More is opt in - no one is going to receive messages unless they've said they want to, and just to be sure there's no possibility of offence no one will get more than one message a day. O2 More has been running for a while, targeting messages based on age, gender and interest, so adding location is a logical step.

Network operators always know roughly where one is, based on the cell with which one's phone is constantly communicating. In Europe this data is even logged for 12 months for law-enforcement purposes, but that data has always been locked in the "network" part of the business and not available elsewhere in the company. Location-based advertising doesn't need the accuracy of GPS or the attendant battery consumption, and operators have been far too slow to take advantage of the information they've been sitting on for decades.

Operators have massive amounts of information that could be tapped for the delivery of advertising. Five years ago a Singapore operator started a project to profile customers, based on their calls and messaging, in order to target advertising at the trend leaders.

That kind of thing requires a huge integration effort, but is becoming more common: one can imagine that Blyk's attempt to run a network financed entirely through advertising would have been a lot more successful if the company had been able to profile its customers and deliver location-based advertising over SMS.

But Blyk's UK network was a virtual operator - it ran on Orange's infrastructure, so profiling data was harder to come by. Real network operators know as much about their customers as Google or Facebook do, but they've been criminally slow to take advantage of it.

O2 More tells us the messages it delivers are "a service to consumers, not an intrusion, enabling people to connect with brands at the right place and in real-time", but the important thing is that the advertising is being delivered by a company subject to UK regulations, and that users can opt out.

It seems likely there will come a time when failing to opt in to such a system leads to a more expensive tariff, but as long as the option exists (and is respected) it's hard to argue with. Still, they'll have to sign up some more interesting advertisers before we'll be putting our names on the service. ®

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