That smartphone in your pocket may soon become a tiny, portable billboard.
Canadians who carry mobile phones are becoming accustomed to seeing advertising messages on them. But until now, to receive an ad you usually had to be accessing a website or software application, or you had to be on a telemarketer's list.
That's about to change. Within weeks, many Canadian cellphone users will be sent ads just because they've walked by the corner store – a development that illustrates the effort by companies to use non-traditional ways to reach consumers, but also raises serious privacy concerns.
Next month, iSign Media Solutions Inc. will light up a network of mobile antennas in Mac's convenience stores across the country, and Couche-Tard outlets in Quebec and Atlantic Canada. The antennas will push advertising messages to any cellphone equipped with Bluetooth technology within their signal reach. The company already owns a network of digital signs in those stores – those screens advertise lottery tickets or other products.
The idea is that anyone within a roughly 300-foot radius of the store will see a "tile" pop up on his cellphone screen. The message will request permission to deliver an ad, usually with a coupon offer or some other deal to encourage the user to click "Yes."
iSign, based in Vancouver, already has a very small network of these antennas in western Canada (just over 150, mostly in Calgary and Vancouver). Until now, they have mostly been in restaurants or small businesses and offered local advertising because of their smaller reach. The Mac's partnership, however, will expand that network to include 1,500 stores nationwide.
"Our demographic seems to be younger people … they're the least likely to consider it an intrusion, and they're very active on mobile phones," said iSign chief executive officer Alex Romanov.
But research has shown that Canadians have concerns about advertising that targets them based on their real-time location, said Scott Hutchinson, a spokesperson for the Office of the Privacy Commissioner of Canada. Because it has not done an in-depth investigation, the commissioner's office would not comment on the appropriateness of iSign's practices. But Mr. Hutchinson noted that in order for the company to stay onside of private-sector privacy laws, mobile phone users will have to give their consent to receive messages. Customers must also give permission if details of their interactions are to be tracked and stored.
"We are and will be keeping an eye on the practice of mobile marketing in Canada," Mr. Hutchinson said.
For advertisers using iSigns in-store digital signs, it's an opportunity to make their ads reach more people. But it's also a chance for Mac's – which not only houses those signs but uses them to promote its own products and sales – to market its stores more effectively. That means moving beyond the direct mail flyers and radio spots that have dominated its marketing efforts in the past.
"Traditionally, convenience stores have been laggards in marketing," said Tom Moher, vice-president of operations for Mac's Convenience Stores Inc. in central Canada. "This is really an opportunity within our retail space to be innovative."
This type of initiative – sometimes known as near-field marketing – is something that companies are asking for more often from their media buyers, as they search for ways to speak to customers more directly.
"A couple years ago, Bluetooth technology behind billboards was quite common, but it really felt like spam," said Caroline Moul, digital director at PHD Canada.
"Now what we're seeing is, it's done by retail location, to give something of value – to give offers to bring people in. Marketers are trying to figure out how to do that."