Alcatel-Lucent Targets Customers with Location-Based Mobile Ads

Imagine walking down the street when your mobile phone rings alerting you to a discount at your favorite store. That technology is coming, thanks to a new location-based messaging and advertising service from Alcatel-Lucent that will let carriers offer customized alerts to subscribers.

 

The technology identifies cell phone users within a specified distance of an advertiser's closet location and notifies them of the address and phone number, the company said in an announcement today. In addition, the ad can also include a link to a coupon, or other promotion.

 

Alcatel-Lucent (News - Alert), a French telecommunications equipment maker, has teamed up with 1020 Placecast, a location-based advertising services provider on the venture Placecast will work with brand marketers to create campaigns. The company reportedly is in discussions with carriers to start testing mobile ads this summer.

 

While mobile ads are nothing new, Alcatel-Lucent’s service offers a unique feature: an opt-in service. While other competitors’ services send out mobiles ads to all subscribers, Alcatel Lucent’s will send ads out to only those customers who sign up for the service. Consumers can control the number of ads they want and specify which companies can send them, the company said.

 

 

The mobile ad initiative could be part of Alcatel-Lucent’s strategic plan, which CEO Ben Verwaayen (News - Alert) unveiled at a press conference last December. During the event, Verwaayen identified mobile as one of the core areas it planned to make investments in the near future.

 

The new service comes at a time when revenue is dipping for phone equipment makers. Wireless carriers, however, will try to benefit from the deal by taking a cut of the services, the Wall Street Journal reports.

 

The potential of mobile ads is big for marketers. As traditional advertising vehicles such as print and TV continue to decline, mobile devices will serve as a more effective ad medium in the near future. Yet, there are barriers companies need to overcome. One 2008 survey found that consumers aren’t as familiar with the marketing platform. Others find the practice annoying and complain that the ads are interruptive.

 

 What’s the solution? Companies need to find a way to pitch their products in ways that consumers find relevant and in ways that won’t cause distraction. For the most part, consumers are open to receiving mobile ads, as long they get a discount off their monthly service bill. According to a survey last fall by Transverse, more than half of respondents said they would look at ads on their phones if they received a 25 percent to 50 percent discount on their bill.

 

“This offering enables carriers, and the brands they support, to create a highly-relevant and personalized experience for mobile users while also delivering immediate return on investment,” said Gani Nayak, president of Alcatel's Rich Communications business, in a statement.

 

U.S. advertisers will spend $229 million on mobile ads in 2009, up 26% from $169 million last year, Appscout reports. Meanwhile, the mobile ad business in Europe is far larger than in the U.S. As TMC (News - Alert) reported, more Europeans receive targeted ads for consumer goods, including food, travel, and fashion compared to mobile products and services.