Article

AT&T offers customers location-based mobile advertising

Customers are concerned about charges for text ads and number of messages.

March 13, 2011 by Kim Williams — Reporter, NetWorld Alliance

AT&T Advanced Ad Solutions recently announced an agreement with Placecast, a location-based mobile advertising company, to provide ShopAlerts, which are text messages delivered to consumers via their mobile phones when they are near a participating store or brand.

AT&T is the first carrier in the United States to offer a large scale, location-based shopping service using geo-fencing technology.

The question is whether or not consumers will view this marketing program as spam or a helpful way to receive special offers, rewards, coupons and other promotions from participating stores. Sign up for the service is free; however standard text messaging and data rates do apply.

Geo-fencing, the technology used to deliver the text messages, creates a pre-defined, virtual space around a particular location. Customers receive promotional messages once they enter a participating area. Potential customers are located based on cell towers communicating with their phones.

Tania Kempf, who recently switched from AT&T to Verizon, said she would only use the service if it didn’t charge text messaging and data rates. 

"I am unwilling to accept advertising on a mobile calling plan I pay for. If I'm getting pop-up ads, then the service should be free — just like the difference between paid and free iPhone apps," said Kempf.

The service is currently being offered to AT&T customers in San Francisco, Los Angeles, Chicago and New York. Customers must opt-in via SMS or the AT&T web portal. The program is fully automated and does not require an app or download, which means the program isn’t limited to smartphone users.

Some of the companies initially slated to use the ShopAlerts by AT&T service are HP, Kmart, JetBlue, SC Johnson, Kibbles 'n Bits, Nature’s Recipe and the National Milk Mustache "got milk?" Campaign.

Shopkick Inc. offers a similar location-based service as a smartphone app for iPhone and Android users that offers coupons and rewards based on "check-ins." Retailers partnering with Shopkick include Target, Macy’s, Best Buy, American Eagle Outfitters and Crate & Barrel. 

AT&T customer Julie Rodriguez says the program doesn't appeal to her because she wants something in return for her shopping loyalty.

"I think that this is an interesting concept, and I already use iPhone apps that offer a similar service, such as ShopKicks and CheckPoints. These apps also offer the potential to earn points that I can exchange for gift cards," said Rodriguez. "My current plan offers unlimited text messages, but for those consumers that pay per text message, or that are limited to so many texts per billing cycle, they may not opt-in to receive messages if it is going to take a ding out of their allotment."

Repeated attempts to contact AT&T regarding the text and data messaging rates went unanswered.

Deborah Graham, current AT&T customer, said she would be interested in using the service if she were able to pick and choose which stores and brands she could receive messages from and limit the number of text alerts she receives. Otherwise, she welcomes the opportunity to save money from coupons and other promotions.

"My college-aged son thinks this would work great in a mall setting. I am worried that it would be too many messages about stores I don’t care about and would never shop in, no matter what the sale," said Graham.

According to AT&T, customers will never receive more than four texts per week from participating retailers. Customer privacy is protected and in line with the Data Protection Act and location data will not be shared, broadcast or passed on to any third parties.

Shopping messages will also feature information on local weather, traffic, the local shopping area and other shopping-related details. AT&T plans to increase the number of participating brands and roll out the program nationally by summertime.