A marketing campaign targeting mobile phone users with location-based messages and offering them a free two-day pass to the nearest Fitness First has resulted in 1,100 people signing up as new members.

The "You Are Here" campaign by O2, the second-largest mobile phone network in the UK, used 'geo-fences' which are set up around a particular location, in this case a Fitness First health club and gym.

As soon as a target customer enters the area marked by the 'geo fence' they automatically receive a SMS or MMS with the offer. To redeem the offer, they simply show the message at the nearest Fitness First club.

O2 estimates that with average membership costing just under £300 per year, the uptake generated increased revenue around £400,000.

Shaun Gregory, Managing Director of O2 Media, said: "The evidence for using location-based marketing is really beginning to mount. These figures show that it is not only effective at targeting the right consumers at the right time, but also extremely effective at driving new revenue streams and huge ROI."

Gregory added that the best responding target audience was 18 to 35-year-old smart phone using single Londoners, who enjoy engaging through social media.