Bluetooth Mobile Ads Deliver 'Hangover'

(MoneyWatch)  For all the talk about having the right product at the right time, retailers have never attained the holy grail of using location-based ads to market to people's mobile devices -- thank goodness.

The main drawbacks to sending marketing messages to possible customers as they walk past a store are speed and intrusiveness. Given that missed calls are part of the mobile experience, how likely is it that you'll get a marketing message while you're still within range of the promotion for which you're being targeted? And assuming you are in range, how would you really feel about it if you got a text message from a Gap you happened to be passing that said, "Hey Michael, we have a pair of those jeans you were looking at online yesterday?" Talk about a scary picture.

Now, mobile ad agencies are turning to Bluetooth technology as a way of reaching target customers in time and allowing them to opt in on a case-by-case basis. The technology works in public places like coffee shops and bars, where people are standing or sitting still, and beams requests to any Bluetooth-enabled device in range, requesting permission to show a marketing message. One mobile ad network, Danoo, which boasts movie and TV studios and video game vendors among its customers, claimed a three percent conversion rate for its most recent campaigns. Danoo's vice president of marketing, Doug Scott, told MediaPost that

[while] the 3% aggregated average... may not sound like a "mind-blowing number," think of the direct-response rates for these campaigns and the ability to connect at the moment consumers are open to interacting with the content.

The technology may be even more successful than that number indicates. Bluepod Media, a U.K.-based Bluetooth network which counts Warner Bros., Sony Pictures and Coors among its customers, recently promoted The Hangover in its network of London bars. According to Jon Fletcher, an executive with the company, 16 percent of people with Bluetooth-enabled devices -- more than three times Danoo claims for its campaign -- agreed to download the trailer. (Customers can now actually verify those kinds of claims, at least in the U.K., through ABCe, a Web traffic certification body.)

I've always been very skeptical about mobile location-based marketing because of how annoying it can be. No matter how much you love a company, it will never be your buddy. Why on earth would you want it calling you? With this approach, vendors can at least ensure that messages are welcomed by consumers, which not only protects them from charges of being intrusive, but increases the chances that the message will actually result in a transaction.