Network equipment vendor Alcatel-Lucent has teamed up with location based advertising firm 1020 Placecast to bring a new, location-based advertising service to brands and mobile operators.

The service will deliver targeted SMS and MMS ads to opt-in subscribers when they enter pre-defined location zones.

The two companies will combine to offer a turn-key service with Alcatel-Lucent providing the geo-fencing technology, while the location-based advertising technology is being powered by Placecast.

Apparently the service will operate as follows:

• Consumers opt-in to specific brands from whom they would like to receive advertisements.
• Brands set up “geo-fences” around the particular zones where they would like to send ads.
• The Alcatel-Lucent network infrastructure keeps track of the subscriber to see if they enter any of the geo-fenced areas.
• When a subscriber enters a geo-fence zone, that information is sent to the Placecast platform
• Upon receiving the location information, the Placecast server knows what brand the consumer has subscribed to, and so sends the appropriate advertising message.

Here are some screen shots of a demo

This sort of advertising, where ads and coupons are pushed to your phone based on your location has been discussed – not always enthusiastically it must be said – for many years. Clearly if done right it could be a valuable service, bringing useful information and purchase incentives just when you need them.

But if done wrong, consumers might find it so intrusive that it sets the whole mobile marketing back a few years in terms of customer acceptance. The 100% opt-in process is a good start, but the entire service will have to be built around the goal of a great consumer experience in order for this type of advertising to become as successful.

It will be interesting to read about the early deployments of this new service to see what customers think.

Read the full press release.