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Some social networks use it and provide businesses with ways to show customers offers and specials based on their current location. However, for the most part, these are application-specific. An individual would need to download an app, join a social network and opt-in for push notifications from the service to receive any ads on their phones. That may all be changing.
On July 24, according to an ABC News article Verizon Wireless became the first wireless carrier to launch a rewards program.
While on the surface, it would seem that they are just joining the thousands of businesses across the country in rewarding customers for using their service, Verizon’s program has a different goal altogether…. collecting consumer location data for advertising purposes. This, in itself, is also not new. Verizon launched Verizon Selects in 2012, which is an opt-in program that uses subscriber surfing and location data to better target ads they see on the phone. The catch here is that to join Verizon Wireless’ new reward program, opting in to their Verizon Selects program is mandatory. Verizon currently has 100-million-plus subscribers, according to the ABC News article, which gives it a considerable audience. In addition, users do not have to download or use an app to have ads delivered to them. Unlike every other service that utilizes location data, Verizon has direct access and control over their service, as well as the ability to deliver ads to consumers without the need for an app.
This presents quite a few interesting questions.
Will the carrot of a reward be enough to convince a person who otherwise would not opt to share their location data to be willing to do so? If the answer is yes, the Verizon Selects program will almost certainly become very valuable to Verizon and to their advertisers. There is no public information on how many Verizon subscribers are already participating in the Verizon Selects program. My guess is that offering freebies, discounts, experiences and prizes to their customers will entice enough people to give up their location and browsing data. Imagine being an automobile dealership in an auto mall and being able to push specials and ads to a Verizon consumer who is at your competitor’s dealership at that very moment shopping for a vehicle.
With the increasing concern consumers have over data privacy and the very public debacle that occurred last year when Verizon was revealed to have given the NSA access to phone records, it’s an interesting decision by Verizon to go public with its desire to collect more data. It’s proven, however, that consumers are willing to trade their data in exchange for discounts and rewards. Almost every major company – in every consumer-facing industry – has a rewards program; including automobile brands, entertainment, hospitality, grocery, travel and banking; to name some of the larger ones.
The fact that Verizon has the ability to use cell towers to locate customers rather than relying on the GPS or Wi-Fi connections on consumer’s phones, gives them a distinct advantage when it comes to location-based push marketing. It will be interesting to watch this program develop and see how many consumers decide to take advantage of Verizon’s new rewards program in exchange for their privacy.