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Summary:

AT&T is offering an SMS location-based offers service, while Verizon is delving deep into the handset to cull web and app usage information for its deal targeting purposes. Both programs are opt-in only in an attempt to head off the inevitable concerns over privacy.

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AT&T and Verizon Wireless already know where you are – that’s the price of being connected to a mobile network – but now they want to use that information to offer you coupons and daily deals. Verizon is going several steps further, taking the demographic info stored in its customer databases, your web browsing habits and even the apps you use to create hyper-tailored deals.

Both operators coincidentally launched location-based marketing services today, respectively called Verizon Selects and AT&T Alerts. Verizon’s program is just a pilot, targeting a portion of its customer base, but both operators stressed their programs are opt-in only and neither would sell nor distribute any personally identifiable information to outside companies.

carrieriqThat may assuage many customers who want their privacy protected. But these programs — particularly Verizon’s since it tracks the way consumers use their mobile phones — will give many customers the creeps. Last year a huge controversy broke out about over U.S. carriers’ use of Carrier IQ, a company that anonymously, but secretly, gathered phone usage information from handsets. Sprint, AT&T, T-Mobile and even Apple claimed to use the info only for diagnostic purposes, but the resulting backlash forced most carriers to excise the software from their handsets.

Verizon was the only major carrier whose hands were clean of the Carrier IQ scandal, but ironically the information Verizon Selects is using to target offers is the exact type of data that Carrier IQ collected. This time, however, Verizon and AT&T are asking permission, which may just be the critical difference in the eyes of the consumer.

The Yankee Group conducted a survey in the wake of the carrier IQ controversy, finding that a majority of U.S. mobile subscribers wouldn’t mind if their carriers logged information from their phones, but only if they were transparent about doing so and if that tracking provided some legitimate value such as being used to more quickly fix problems with their phones.

That seems to be the bet that AT&T and Verizon are taking now. Customers who inherently mistrust their operators may never sign up for these programs, but many might see value in them.

AT&T Alerts is available to all of its customers, and is designed to be both location and time sensitive. If you’re approaching a Gap, for example, AT&T ships you text message out of the blue with a link to a coupon for jeans. You can register for the service on the Alerts web page or opt in by texting “join” to the “ATTALERTS” short code, though it’s not available yet for the iPhone 5.

Verizon Selects is a lot more expansive, covering much more media than SMS – even direct snail mail — and unlike AT&T Alerts, it provides a direct link between the third-party advertiser and the customer. Here’s how Verizon explains it in its News Center blog:

Simply put, Verizon Selects will use location, web browsing and mobile application usage data, as well as other information including customer demographic and interest data, to create specific insights. Verizon Selects analyzes this information about customers to see whether they fit into certain audiences Verizon or third party marketers are trying to reach. Depending on the results, participating customers will receive marketing messages or offers that may be of more interest to them than what they see or receive today. These messages could be delivered in various ways such as email, text, postal mail or online or mobile advertising.

We are asking customers to opt-in to Verizon Selects because of the types of information being used and because the capabilities provided to third-party marketers gives them the ability to reach customers directly. It’s important to remember that Verizon DOES NOT share information that identifies customers personally outside of Verizon.

  1. Having seen Andrew Coward (the man with perhaps the best last name in Marketing) speak about Carrier IQ, I’ve come to the conclusion that no one would be upset at all about that software if it were opt-in. Frankly, consumers have shown time and again that they are willing to exchange privacy for convenience and Carrier IQ, in discount form, seems like the perfect way to tap into that.

    Location is just another signal in the noise.

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    1. I agree with you there. The thing is carriers didn’t ask permission. They didn’t even tell their customers were doing it. And the demanded their handset vendors secretly install the software in their firmware. Those just aren’t oversights. Those are the reasons for the controversy.

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  2. Agreed, consumers are quite willing to give up info freely when offered a cookie in exchange but only when offered. In the world of Facebook and the millions and millions of users who post everything and anything about their personal lives and their friends/families lives with or without consent this really should not come as a shocker.

    Of course Facebook does take the stance that their service is free and you can opt out anytime you want and while that is true Facebook also has shown time and again they will use whatever methods possible to make changing your privacy settings to keep your privacy, well private.

    I bet if the wireless carriers offered a huge discount on their services in exchange for this level of info the response would be overwhelmingly positive, I for one will continue to say no, opt out and pay for my service. My privacy is worth more than a cheap coupon.

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