Forschungs- & Entwicklungsinformationsdienst der Gemeinschaft - CORDIS

Business model VIII: Private push approach II (LBA in big shopping centers)

- Expected ad perception: affinity;
- Local system operator-centric;
- Local system operator is not the retailer but rather an entity with multiple local systems;
- Great diversification of advertisement;
- Existing or quick build up of a critical mass exceeding user database;
- User owner: local system operator;
- Incentives for the user: informative advertisement and coupons from retailer, as well as free information subscription and possible discount from mobile operator;
- Source of payment: retailer;
- User grants opt-in and personal data;
- Target group: shoppers;
- Revenue stream: retailer - local system operator - content supplier.

In this case the local system operator is not the retailer, instead, it can either be the owner of the facility where the retailer is located or another entity with nationwide presence, e.g. a telco or mobile network operator that wants to expand its WLAN product portfolio. The role of the retailer consists in the provision of sales content for which it receives a one-off payment at the beginning as an incentive to participate. At the same time it has to share every single sale with the operator of the local system whenever a purchase has been triggered by an LBA message. A prerequisite to make this model work is the ability to distinguish whether a customer’s purchase is based on such an advertising message or not. A possible approach to solve this problem is to send coupons with bar codes to the users, which grant a discount upon redemption at the cashier.

The customer relationship is managed by the local system operator. Mobile operators have a big advantage as they have a high number of subscribers and therefore a huge potential user base. To reduce its dependency on relevant sales content the local system operator can also buy additional content which might be useful and interesting for the users. This has a positive impact on the perception of LBA, as the touch of being solely an advertisement channel is shifting to being an information channel. Thus, the customer is more likely to opt-in for advertisement on their mobile device and to provide personal data for profiling. The user can benefit from this LBA approach in two different ways. First, he receives interesting sale offerings from the shops he likes (through his profile), and second, he can additionally benefit from useful information, which the local system operator has purchased from the content provider. In case the mobile operator is the operator of the local system, the user can even get monetary incentives like discounted monthly fee or free call minutes.
The advantage of this scenario compared to (LS-Private-Push-I) is the quick establishment of a large user database. Hence, this approach is also interesting for smaller shops whose customer base is too small for the deployment of LBA on their own. With every participating shop the local system operator enriches its portfolio and therefore makes this service more attractive to the user who is able to choose between a wide range of different product ads.

Reported by

YellowMap AG
Wilhelm-Schickard-Strasse 12
76131 Karlsruhe
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