August 23, 2012, 2:31 PM — An ad agency is testing a new app that uses strategically placed cameras, facial recognition tools and Facebook histories to offer targeted local deals.
The system, dubbed Facedeals, uses cameras placed at the doors of participating stores and facial recognition software to identify users of the app and then offer them customized deals based on their history of likes and interests on Facebook
[ Free download: How to craft a mobile-application strategy ]
The Facedeals systems was developed by Redpepper, a Nashville-based ad agency.
The company notes on its Web site that it and the product are "not affiliated with Facebook."
"For businesses, there is no easier way to deliver customized deals," the company said on its Web site. "Users receive personalized offers simply by coming through the door, which removes the guesswork typically performed by both parties. Businesses will no longer wonder which offers will stick. Patrons will no longer plan outings with a deal-a-day mindset, but can simply frequent their favorite spots and count on being rewarded."
The company said it's still testing the new product -- as well as looking for funding.
Company executives weren't available for comment on the new app.
Analysts said that while the product could be a boost to local-deals offerings, it also poses some tricky privacy issues.
"My first reaction was chills, closely followed by shuddering, as my mind raced through the implications of this kind of seemingly benign application of facial recognition," said Dan Olds, an analyst at Gabriel Consulting Group.
"On the face of it, it all seems innocent enough. You sign up for the service, you go to places, they automatically recognize you and then give you a special deal," Olds said. "(But) consider that once you sign up to allow yourself to be recognized, your presence will be logged anywhere that has one of their cameras."
"With enough time and camera locations, they'll be able to build a highly informative map of your travels," Olds said. "Combine that data with other data, like what you purchase, how much money you make, and they'll be able to build a highly detailed dossier on you."
Patrick Moorhead, an analyst with Moor Insights & Strategy, however, said he expects most people won't be put off by the potential privacy implications.
"Over the last 15 years, as privacy has decreased, we have all been more open to share more," Moorhead said. "An important factor is when the consumer receives a benefit for exposing more information -- in Facedeals' case, consumers could get access to free or discounted merchandise."
He added that a successful Facedeals app could prove beneficial to potential rivals like Groupon by helping to make the market more legitimate to consumers.
Olds, though, said that the Facedeals system could pose a risk to rival firms. "If this were to catch on, it would put a huge amount of pressure on Groupon and others that are trying to exploit the local business market," he said.
He noted that the technology, if it works, would offer users an easier path to get deals at their favorite stores and restaurants -- they only have to show their face. That alone could help allay user privacy concerns.
"Some people will figure if they're going to be out shopping anyway, they might as well get the discount," said Olds.
"At the end of the day, they might be right. Although we don't think about it, we're seen and potentially logged on security cams in stores, malls, parking lots, and many other places. The only difference with this program is that the cameras are obvious and you're getting some benefit from patronizing certain places," he added.
Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, or subscribe to Sharon's RSS feed . Her e-mail address is email@example.com.
Read more about e-business in Computerworld's E-business Topic Center.