More and more brands are using location-based marketing strategies and eMarketer predicts that marketers will spend $26.5 billion in mobile location-targeted advertising this year alone. There are actually several different types of location-based marketing tactics that brands can use. Our hope is to provide a general understanding of those tactics and how consumer privacy remains protected with this type of marketing.
The fundamental methods of location-based marketing include geofencing, geotargeting, geo-conquesting, and proximity marketing.
Geofencing is when brands push out advertising or other content to a consumer based on that person’s real-time location. The brand sets parameters around specific locations to create an area. The consumer first has to opt-in to share their location with a brand’s app. When that person enters a designated geofenced area, he can then receive branded text messages, push notifications from the brand’s app, or other content and advertising when he is using the app in that location.
Facebook, Instagram, and Google are the most well-known platforms that provide geofence targeting. Snapchat provides location-specific geo-filters that companies can use to increase brand awareness or promote a physical brand location or event they might be hosting. Other push notification providers such as restaurants also support location-based messaging.
Geotargeting is sort of the past tense version of geofencing in that businesses use it to push out advertising and content to consumers that have visited specific locations in the past. Marketers working on the idea that location data is as an indicator of an audience’s real-world preferences so they use historical data to build campaigns that will reach more relevant audiences. The key is for each brand and marketer to understand how this location-based marketing strategy fits their business and customers so they know whether to target consumers by looking back one day, one week or one month, etc.
Geo-conquesting is used for brands that want to reach audiences that visit their competitors’ locations. This tactic can be used when an audience is nearby at the moment, but also works very well when applied to reach historical audiences. An example of geo-conquesting is when Burger King ran a campaign in which they offered a one cent whopper to audiences that had their app open when they visited a McDonald’s location. For good measure, Burger King included directions to the nearest Burger King restaurant as well!
Proximity marketing uses technology like beacons and near-field communication (NFC), to trigger ad delivery, alerts, or content to a smartphone that is within a few feet of a specific location. The most common example is how a smartphone can detect the presence of a credit card terminal and allow quick and easy payment via the smartphone.
Some beverage companies have combined this tactic with augmented reality which allows a consumer to use an app like the Living Wine Labels app to bring to life a wine or beer label. If you’ve not seen this and wonder how it works – the smartphone camera views the label and the app turns the screen view of the label into an animated display. Companies are using this strategy both to educate consumers regarding the product and for mere entertainment value.
Consumer privacy is of the utmost importance and companies opting to utilize location-based marketing need to have an understanding of how their audiences are created and how consumer privacy is protected.
First and foremost, the location data used from either GPS or another signal must be opted-in so the consumer is aware that he is choosing to share his location in order to serve advertising purposes. Secondly, consumer data should be aggregated and anonymized to prevent the tracking of individual consumers. A third guideline is to not build location-based audiences from more sensitive locations like healthcare offices unless a consumer has offered explicit consent for that sort of specific use case.
HOW LOCATION DATA IS RESHAPING MOBILE
Location data is reshaping mobile advertising and attribution. With the increased usage of smartphones, marketers have rushed to adopt a mobile-first approach. That being said, marketers still need to be thoughtful in the creation and presentation of their content to ensure it is relevant and value-added for the target audience. The good news is that mobile targeting campaigns can be highly personalized via location data.
According to the LSA Market Landscape Report, location-targeted mobile advertising is expected to reach $32 billion by 2021. Location data allows brands to more effectively target mobile devices by enabling real-time message delivery based on a particular device’s location. This real-time location data can also be used to build audience profiles by applying the offline behavior of users to the targeting process.
A Google study found that 4 of 5 consumers prefer location-based ads and want to see messaging customized to their city, zip code or immediate surroundings. More than 60% of the consumers participating in Google’s study claimed to have used location information provided in ads. The consumers also indicated the importance of including in the ads the street address and phone number of the store and a call button for ads presented on smartphones.
The LSA Report further explains how brands are using location data for insights that go beyond marketing:
Use offline behavior to identify prospective audience segments
Better understand consumer purchase intent and preferences
Pair traditional and digital advertising with real-world activity and transactions
Improve customer experience through an understanding of customer activity from an operational perspective
Gain insights on competitor’s traffic
Create more relevant and personalized customer experiences
Predict earnings and financial performance
Prevent fraud and security issues
COMMIT TO AN OMNICHANNEL PRESENCE
Google found that 6 out of 10 Internet users will begin shopping on one device and then continue or finish shopping on a different device. As such, it is important for brands to maintain an omnichannel presence so they always exist where a consumer expects them to. Fortunately, data amplifiers exist. Data amplifiers are data publishing companies like Facebook, Google, Yelp, Apple, etc. Brands can share their location data with these amplifiers in order to maintain a strong presence across multiple channels.
Until recently, most marketers used the last-click model to assess the effectiveness of their marketing channels. This tactic gave credit for consumer conversion to the last touched medium just prior to a purchase. The issue with last-click modeling is that it only communicates regarding part of a user’s journey and doesn’t address other marketing influences that may have happened along the way. It also leaves out important information about users who begin their journey on one device and complete it on another.
Mobile attribution is all about using big data to gain a complete view of a buyer’s journey. Through attribution modeling, brands can better determine their most effective marketing channels through the use of more sophisticated predictive algorithms. This data-driven approach powered by machine learning helps brands find and analyze data from multiple sources and will assign the conversion credit to not just the last influence but rather the four most influential touch points in a user’s conversion journey.
Effective campaigns rely on multiple strategies and tactics to be successful. With increasing access to real-time location data, brands can utilize that information to gain competitive insights and create more personalized ad campaigns. And while data will continue to play an evolving role, brands still need to focus on their ad copy and creative. Location-based marketing simply allows brands to leverage the new technology available to make sure they are finding the right audience at the right time and doing it on a regular basis.
The experts at Strategy Driven Marketing are all about data and analytics. We’d love to deep dive into your business to understand your organizational goals. We can help you determine and execute location-based marketing strategies that will let you recognize progress towards those goals and identify challenges along the way. Contact us today to set up a consultation. Let’s get started!