This is a great follow up to my previous post about the problems with location-based SMS advertising.

Two weeks ago, O2 launched their very own SMS advertising network called O2 More. The opt-in program aims to “deliver highly personalised campaigns for advertisers and give customers access to a wide range of exclusive and relevant offers from over 50 leading brands.”

It works by the O2 customer signing up and filling out their age and interests online (picture below), O2 will also use their location and usage data:

What other information will be used for O2 More?

Only things we know about how you use your phone since you’ve been on O2. For example, if we know you download music to your phone, we may send you details of a music offer. We want to make the messages you receive from us as relevant as possible.

I dug around and found the O2 Sim card I used for the AQA vs 118188 test and signed up for O2 More. Check out the registration screen below (click to enlarge).

This is the first time one of the big four operators has opened up their customer data to brands and it’s probably long overdue. There’s no reason this couldn’t have been done years ago so why now? Are brands and consumer attitudes changing?

Shaun Gregory, managing director of O2 Media said in a statement:

“Mobile advertising has been slow to deliver on its promise. Much of that has been down to a lack of understanding, limited opportunities and no real accountability or measurement. O2 More is about to change all that and will spearhead the UK’s first truly personalized media business.”

Why Now?

I personally think that operators are seeing power shift over to manufacturers and are making (slightly vain) attempts to combat this. For a long time operators have been holding all the cards for targeted mobile advertising, they have your location, personal details (when you sign the contract) and even your browsing habits. But now everything has changed, advances in technology means that the handset can do all of this and more, putting the manufacturers in pole position.

Phones can use GPS for your location, online accounts for your personal information (like Facebook, Google etc) and can track your browsing habits just as well as the operators. This poses a problem for mobile networks because they are moving out of the profit loop.

But the most important thing to remember is that manufacturers control the user interface and experience. This means that advertising doesn’t just have appear in the browser or Applications, completely new ad-units can be created. Imagine the things you could do if you got the chance to start mobile advertising from scratch, on your own terms. Imagine the brains behind Apple and Google creating new ways to advertise that aren’t restricted to SMS or banners.

In the past operators took a cut of your profits if you wanted to make some money using things like premium rate SMS, LBS lookups or reverse billing. These days you can take payments from within a iPhone/Android/Blackberry App and the operator doesn’t get a penny. Imagine the amount of money that goes around the iPhone eco-system without O2 getting a sniff.

And what about ad serving? It’s allowed developers and publishers to turn over millions in revenue by pulling ads into their apps/mobile sites without any profits going to the networks. After Google paid $750 million for Admob, a business that relies on advertising on mobile networks, I wonder if operators wondered why they weren’t getting a more of the pie.

This is blatantly obvious with app stores. Vodafone and Orange have just launched their own. Why? What do they believe they can offer the marketplace that the manufacturers cannot? The answer is – not much, apart from confusing consumers. It’s totally ‘me too!’ behaviour with the purpose of slowing domination by manufacturers.

Anyway back to O2 More, one thing O2 does have is reach, they can target people who have low end phones just as well as the super duper ones because everything is reliant on the network rather than phone hardware. But when recent studies show that iPhone users spend more money you often wonder where you’re likely to get a higher ROI.

I’ve been signed up for O2 More for 3 weeks and I have yet to receive a promotion. Not really a good start.

Shaun Gregory, head of O2 Media, said: ‘It’s not about bombarding customers; it’s about providing true relevancy. If we have [an offer you’ll enjoy] we’ll send it. If we don’t, we won’t.’ Gregory also swears you won’t receive more than one a day”

Maybe the ad inventory doesn’t match up to my personal preferences yet? One I get a SMS ad i’ll screen grab it and post it on the blog.