Location-Based Advertising Concept Cashes In On Opt-In; Turns Good Deals Into Good Deeds

Topic: Mobile Marketing | Author: Peggy Anne Salz | Date: April 17, 2009

Between the Mobile Advertising U.K. research project and interviews for MSG’s own global mobile advertising reference work (more about that in future posts), I’m naturally eager to connect with the companies and the brands that set the bar. (If you have a story you would like me to consider for the projects I mentioned, or you just want to share your news with the growing MSG community of mobile operators, influencers, senior executives, and decision-makers, I encourage you to contact me directly or email my PA Andrea Henninge to set up a briefing (andrea@msearchgroove.com).

With all the excitement (check out this recent report on CNN) around location-based advertising, it’s a given that coverage of this trend will have a top-notch spot in both research projects I outlined above, as well as MSG analysis going forward. (A great example is an upcoming column from Nate Janewit, computer scientist, location expert, and frequent contributor to thinking spaces and websites such as ReadWriteWeb. I just went over the draft with Nate yesterday and greatly look forward to the industry discussion it will spark when I post it later this month.) Another indication of how big location is: MetaPlaces 09: How to monetize location data and services (September 22-23 in San Jose, CA), an exciting industry event that will discuss context-enabled content and the service models that will benefit advertisers. MSG is proud to be a premium media and marketing partner and will circle back with exclusive pre-event promotion content, such as podcasts with keynote speakers and in-depth Q&As with key players.

A company that has caught my attention, with a potentially path-breaking approach to location-based advertising, is BipBip, the brainchild of Lasse Larsen, Chairman of the Board, WIS  International. (Wireless Information Services). The company – headquartered in Riga, Latvia – has an impressive stockpile of patents around the service, and ambitious plans to  launch BipBip worldwide (including the U.S., China, India, and 21 cities across Europe) following a successful pilot in Denmark last month. (My personal thanks to Lasse for contacting me on Twitter (@peggyanne) and for giving MSG the exclusive.)

What is BipBip? On paper the ad-funded service fulfills the criteria mobile advertising evangelists Andrew Grill and Jonathan MacDonald would no doubt agree are essential to delivering effective advertising services. I’m thinking here of the 3Ps: Permission (people will decide what brand messages they interact with); Privacy (people will decide where their data is collected and how it is used); and Preference (people will decide what content they find relevant).

The permission-based BipBip advertising scheme requires users to log onto the service via their mobile or PCs to provide personal data (gender, location – zip code), but there’s a twist. It also collects information from consumers (Preference) who sign up for the service on what products they are interested in (a sort of combination shopping list/wish list), and the price range that would make them buy, and a proximity that would clinch the deal. (Privacy, because users decide what happens to the data. It is passed on to retailers, who can only deliver a coupon discount on the wish list item when it matches the conditions (price and proximity) the user said they would accept.

At the other end of the spectrum, BipBip has pulled together retailers and advertisers that have the goods/services and discounts to make consumers an offer they are likely to appreciate. The back-end system makes a match, and location technology closes the loop, alerting consumers via free SMS to when they are in the vicinity of an item on their list at a price they are willing to pay.

But the real differentiator is an even cleverer feature that turns greed-is-good bargain hunting into a mission to make the world a better place.

bipbip do good Location Based Advertising Concept Cashes In On Opt In; Turns Good Deals Into Good Deeds

This is because BipBip donates up to 50 percent of its profits (what it earns when a user agrees to receive a text ad/coupon) to a good cause that the user has chosen (as part of the opt-in process).

Do the numbers add up? Lasse tells me they do. Because BipBip has cut deals to buy text messages in bulk at good prices (and developed IP that prompts the SMS gateway to send cheap texts (from advertisers) to users on the move. With no mobile operator to feed in the value chain (even payment is outside the operator with transactions handled by PayPal and credit card companies), the company only spends 5 percent of its income (from advertising) on sending SMS advertising and coupons on behalf of the advertiser. Plenty left over to donate to the user’s favorite cause, organization, or local soccer league.

My take: Give consumers what they want? It’s possible because BipBip plays the role of an honest broker, bringing people together with the nearby offers they want most (otherwise they wouldn’t have put them on their wish list). Supply and demand are in synch, and BipBip makes its money in the middle. What’s more, BipBip doesn’t pay lip-service to the causes and concerns that motivate a large number of today’s empowered and socially responsible consumers. It pledges to spend real money on real non-profit organizations (in fact, no user can sign up for the free service without naming the organizations that should benefit from them accepting text advertising and coupons). I’ll reserve judgment until the service is live. However, a mobile advertising model that allows consumers to do good while they do their shopping sounds like a good deal all around.

10 thoughts on “Location-Based Advertising Concept Cashes In On Opt-In; Turns Good Deals Into Good Deeds

  1. verywell can all this be thrush wordy, don’t misunderstand me I would love this to happend, but reading this article (good job btw.) I was reminded how many times I have being disapointed by our politicans in the states “they talk and talk”, but they never bring in the full cow, only a leg or so (get my picture?) – so all this about bipbip, I for one have to see it before beleiving it, but I can also promise that IF the provide – I will most probaly fall in love with this service.

    Br. Hansson

  2. hello Hansson,
    I am sure everybody can understand your scepticism when it comes to politicans. But giving away part of the margin is not an optional good deed for BipBip. It is build right into the business model.

  3. Hi Steffen, some Q’s;

    (1) can you show some prove of that?
    (2) and what is your connection to this since you can state this ?

  4. Hey Peggy

    Helen Keegan and I ran a company exactly like this as far back as 2000 – ZagMe. It had all the elements you describe including the three P’s (we were the first to verbalise them and put them into practice in a mobile environment). We didn’t have a charity angle, though we did give out points when people saw ads, which could be converted into charity donations.

    We recruited 85,000 users and ran over 1500 campaigns, so learned a lot of lessons before going bust (actually as a result of 11the September 2001).

    I realised that we were far too early, so wrote a White Paper based on the experience. The main purpose was so that future generations of people don’t make the same mistakes. They are though!

    Anyone interested in this area can contact me russell AT mobhappy DOT com or Tweet me russellbuckley for a free copy. Happy to send you one too if you’re looking at this area.

    Good luck to the BipBop team.

    Russell

  5. Hi Russel,

    First of all thank you very much for sending me a free copy of your white paper regarding Zagme, it was very interesting to dig into and it’s very easy to read even for a guy like me that does not have English as my mother tongue –and thanks for comment on a article about our humble product.

    After reading your white paper it’s every much confuse me that you in your comment state ” Helen Keegan and I ran a company exactly like this as far back as 2000 – ZagMe –unquote”.

    Because as Ms. Pegge Anne Salz is explaining so every well in her article; the BipBip System are the consumers tool – NOT the advertisers,
    and therefore not just in the broad term a new kind of mass-marketing meets email-SPAM -just now on the consumers mobile phones
    like almost all other location based / mobile marketing services that is on the market today.

    The BipBip System is 100% the opposite
    it’s the first system in the world that gives back the “shopping” power to the consumer
    and allows the consumer to say to the advertisers
    “if you can’t give me this product to this price with this distance’s”
    -then I am not visible for you and as a advertiser on the BipBip System you can’t therefore see me equal to you can’t send me information eaual to NO SPAM. -so in short;

    I can’t in any circumstances agree to your compares’.

    But saying ALL this – again I am very much proud, that a person like you with your track record is taken you time to read about little Us
    and we thank you very much for wishing Us good luck in future and off cause
    it’s likewise from Us to you, even if you don’t need, it as much as we do ;)

    // Lasse Larsen
    COB Wis International SIA
    Twitter: @Luffemann

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