Location-based marketing enables businesses to target consumers with a granular,The person's legswith online or offline messaging based on their physical location. Using location data, marketing teams can reach consumers based on criteria such as proximity to a store, events in their area, and more. Location-based marketing has proven effective across all customer lifecycles — from discovery and purchase to engagement and retention. When applied correctly, location-based marketing allows marketers to target specific customer segments with targeted offers while improving the customer experience for a population that increasingly values instant gratification. For example, location-based marketing can alert a prospect that a product they've been considering is in stock at a nearby store so they can pick it up immediately. Location-based marketing has largely been made possible in recent years by the growth of connected devices. Today everything seems to be connected to the internet - phones, cars, watches and more. These devices often track their owner's location, meaning a wealth of location and spatial data is available. Insights gleaned from this data provide marketing teams with better context for how to reach customers and improve their overall experience.
Types of location-based marketing
Location-based marketing enables businesses to target consumers with a granular,The person's legswith online or offline messaging based on their physical location. Using location data, marketing teams can reach consumers based on criteria such as proximity to a store, events in their area, and more.
Location-based marketing has proven effective across all customer lifecycles — from discovery and purchase to engagement and retention. When applied correctly, location-based marketing allows marketers to target specific customer segments with targeted offers while improving the customer experience for a population that increasingly values instant gratification. For example, location-based marketing can alert a prospect that a product they've been considering is in stock at a nearby store so they can pick it up immediately.
Location-based marketing has largely been made possible in recent years by the growth of connected devices. Today everything seems to be connected to the internet - phones, cars, watches and more. These devices often track their owner's location, meaning a wealth of location and spatial data is available. Insights gleaned from this data provide marketing teams with better context for how to reach customers and improve their overall experience.
There are several ways marketers can incorporate this location data into their marketing efforts:
Geotargeting is used to determine a user's location in order to then serve them personalized messages based on their location. If a consumer has consented to an app accessing their location, they may receive in-app messages or push notifications based on region or proximity to a store.
How it works
- Geotargeting is based on IP addresses. Each connected device has a unique IP address that makes it identifiable. From there, device IP addresses can be matched against country, zip code, etc. to determine where users are located.
- The main advantage of geotargeting is to improve the customer experience through personalization. For example, marketers can target users based on location-specific requirements, e.g. B. weather or local news and events.
- A popular example of geotargeting is Google search results. When a user searches for "coffee shops", Google uses location data based on the IP address of the device from which the search is performed to return information about coffee shops in the area.
Localized results for a search conducted in Boston
- Another common example of geotargeting is done by Uber. If a user is traveling and ends up in a new city, upon opening the app they will receive a notification about available cars in that city.
Geofencing is the creation of a boundary within a specific region. Whentarget audienceCross this limit and they become an active target of the marketing strategy. This may mean receiving content, offers, or other communications from the brand. An example of a boundary is an area that includes a popular mall where the company has a store.
How it works
- Geofencing uses GPS technology to create a boundary. Whenever a target user exceeds this limit, they will receive a notification or message.
Geofencing allows marketers to cover large areas like malls or event spaces. With this method, marketers can target all users who are within a certain radius. While less granular than other tactics, geofencing can be a great tool if you have a large trade show or if you want to capture traffic right in front of your store.
- Geofencing relies on real-time location data, allowing marketers to encourage users to engage with their products or discourage consumers from engaging with competitors.
Retailers can use geofencing to target users near their stores and encourage them to stop at a store. For example, if a customer has reviewed a product online, they may receive a notification that the product is in stock at a nearby store.
Beacons are connected devices that use Bluetooth or WIFI to connect to predetermined applications operating within the beacon's range. Beacons work well to target existing customers in a small geographic area.
How it works
- Beacons send a signal to your device that requests a server to send content to your device. This could be a push notification, an email, etc. Suppose a sports stadium encourages attendees to download their app for ticketing, discounts, etc. The venue would set up beacons to detect when a device with that application installed is in range.
- Users must be signed in and have Bluetooth enabled to use this. However, this medium of location-based targeting offers you moredirect communication channel with customers.
- Organizations can more accurately track users indoors. Not only does this allow for more specific targeting, but it helps marketers gain a broader understanding of customer behavior.
- Users do not have to be online to receive these notifications.
- Stores can place beacons in aisles around the store to broadcast offers while consumers browse. For example, a grocery store can use beacons to see when a consumer is in the ice cream aisle and then send them an offer for ice cream cones.
Mobile targeting occurs when marketers target consumers with ads on their mobile devices. Because consumers typically want to avoid ads, marketers aim to make their ads context-specific, which can be based on time, device, or location.
How it works
- Create segments in your mobile ad platform that define who you want to target and what skills you want them to target (when they enter a specific area or are close to your store).
- This allows marketers to target users directly on their devices for a more personalized connection.
- Marketers often get higher returns on ad spend when they use a more targeted approach.
- Social media ads that target location data can help encourage visits to a nearby store, restaurant, or event.
Geo-conquesting uses location data to distract potential customers from competitor locations. For example, car dealerships could draw a boundary around a competitor's property. When a target consumer reaches this limit, they are sent an offer to users encouraging them to visit the other retailer.
How it works
- Geo-Conquesting uses GPS technology to target users close to your competition.
- Businesses can gain market share and attract new customers by encouraging users they know are already searching for a product in the space to buy from them over a competitor.
- Burger King used geo-conquest to great effect, driving potential McDonalds customers back to their own restaurants. Consumers were encouraged to download the Burger King app. As they approached McDonalds within 600 feet, the Burger King app sent an advertisement for a1 Cent Whopper, and navigated customers to the nearest location.
Reasons to use location-based marketing
Location-based marketing can offer a variety of benefits to both consumers and marketers.
Marketers can deliver more targeted messages that increase awareness and foster relationships with customers and prospects. The targeted nature of these ads often results in less wasted spend as well. Consumers, who are increasingly careful about what brand messages they engage with, receive personalized offers at convenient times, enhancing their overall experience.
Some of the top reasons marketers use location-based tactics are:
Increase immediate foot traffic
- Location-based marketing can drive foot traffic for local businesses like retail or food service by informing users in their market of their proximity and luring them with an offer.
Deliver more relevant ads
- Marketers can use real-time location data to create more relevant, personalized ads. This is not necessarily limited to where a person is physically located. Position data can also provide timing and message delivery information. For example, analysis may show that a consumer is more likely to interact with an ad when they are on the train or on their way to work, which helps marketers determine when to run an ad. Location data can also inform text and creative material. For example, marketing teams may choose to use images of the city where the target consumer lives rather than generic images. Context and relevance have become crucial parts of messages to engage with rather than ignore. Using these real-time insights ensures that these criteria are met.
Distract consumers from the competition
- By targeting users who are switching to a competitor's store, marketers can encourage customers to visit their store instead and gain market share.
Create a better user experience
- By targeting customers when they are likely to need your services most, you can offer them a better user experience.
For successful location-based marketing, it is important that marketers consider their location as well as their customers' location. For example, businesses located on a street with minimal foot traffic may not want to invest in location tactics. Likewise, shops that are not at street level, such as B. in residential buildings or hotels, be careful to address only people who visit the building to shop. For those uninterested in visiting the store, regular warnings can cause annoyance and harmbrand reputation.
As with any marketing investment, you should first assess your customer base and the influencing external factors to understand how these tactics affect ROISet ad spend.
Trends im Location Based Marketing
Marketers have begun to exceed traditional expectations for location-based marketing by capitalizing on these trends.
Augmented location allows brands to do more with location data than just send out notifications. Marketers can create experiences based on where the user is at the moment.
Take Pokemon Go, for example. This app tracks a user's location and uses their mobile device's camera function to place a digital creature in the user's physical space.
Brands like Yelp are also playing on this trend, allowing users to point their camera at their current surroundings and view listings for nearby restaurants.
Another trend in location-based marketing is increased use. Retailers across the country are looking to invest in location-based marketing, with almost60 percent of retailersThey said they would concentrate the 2019 budget here. As marketers employ location-based tactics, they are careful to consider user privacy.
Beacon-Technologie / Proximity-Marketing
As mentioned earlier, beacon technology uses Bluetooth to exchange information with user phones. As beacons become more sophisticated, marketers are increasingly using them for location-based efforts — particularly for proximity marketing. Proximity marketing uses beacons to send targeted messages to users in a very small area.
Prominent developments in beacon technology come from Apple with iBeacon and Google with Eddystone-EID and Project Beacon.
Hyperlocal marketing tactics leverage location data and time-sensitive insights to engage customers. Marketers can target a smaller number of consumers in a specific city or even a specific block. This makes campaigns more personalized and measurable. Also, because personalization plays such an important role in marketing today, hyper-local campaigns are easier to tailor to niche audiences than large, national campaigns.
Before methods of mass commutation, hyperlocal marketing was a staple. The reach of the internet and television meant advertisers could spread messages beyond their immediate vicinity. Marketing teams are returning to this strategy while also incorporating new digital advances.
Privacy Concerns in Location Based Marketing
If you're concerned about user privacy when implementing location-based marketing, you're not alone. Privacy is a major concern for companies looking to get the most out of location-based marketing59 percent of the companiessay that these concerns prevent them from proceeding with these types of requests.
There's a fine line between using location data to improve customer experience and appearing to spill over to customers. Aside from sharing private information with your company and employees, customers are also wary of cyberattacks that could expose their data to a wider, likely malicious, audience. These attacks harm both customers and businesses, as 64 percent of consumers say they would not shop from a company that had their information stolen.
To minimize these concerns, marketers need to ensure that users are opting in to location-sharing services when using apps and have the ability to opt-out. Anonymizing data can also help reduce privacy concerns, since information about behavior and preferences is not tied to specific names or email addresses. Finally, organizations must ensure that cybersecurity solutions and protocols are in place to reduce the likelihood of a successful attack.
Beyond consumer concerns, many regulators have taken note of personalization tactics through data collection and enacted rules to ensure companies don't misuse consumer data.
One of the strictest regulations isGDPR, and applies to all organizations doing business with residents of the European Union. The GDPR doesn't allow companies to target users without an explicit opt-in and has strict regulationsguidelinesabout the use and storage of EU citizen data. Consult with your legal department to better understand what can be tracked with your company's marketing efforts
Businesses must comply with local privacy laws before embarking on a location-based marketing program.
Beyond privacy concerns
When privacy and data collection/protection are managed appropriately and securely, many consumers are willing to share information for a better customer experience. Consider these stats:
- Almost 100 percentof consumers would share their data for cash rewards
- Almost 90 percent would share this data for location-based discounts
- 66 percent would share data for loyalty points/programs
If your business can offer users a better experience, it can be a great tactic to strengthen relationships with customers and prospects by providing more relevant information and rewarding loyal customers.
Get started with location-based marketing
To ensure your location-based efforts are successful and not negatively impacting your businessMarketing-ROI, consider the following before you begin:
- Clarify privacy concerns with your Legal Department: This should be the first step. Work with your legal department to understand who you may target and whether the tactics you intend to use are consistent with local laws.
- set goals: The only way to measure impact is to set clear goals and KPIs for what success looks like. What is the goal of the campaign? Are you trying to send notifications to people in your store or direct people away from a competitor?
- Choose an alignment method: Based on the goals set, choose a targeting method such as geofencing, geo-conquesting, or beaconing (see the first section of this post). This targeting method should match your goal. For example: Geotargeting could be a great way to lure past customers to your store, while geofencing can be a great way to attract new customers to a restaurant during lunch hours.
- Analyze results:Review the data collected and determine which tactics have worked well for your business and which have not. Use geo-zone analysis combined withMarketing-AttributionAnalytics to better understand what led to conversions.
Examples of brands using location-based marketing
- Adidas: Adidas used location extensions in its search ads to encourage visitors to shop at their nearest store. One in five people who viewed the site ended up going to a physical store, which led to one680% increase in ROI.
- whole food: Whole Foods used both geofencing and geoconquesting tactics to gain market share and increase conversions. The supermarket targeted shoppers at nearby grocery stores with special discounts and encouraged them to visit Whole Foods stores instead. Similarly, shoppers who were already planning to go to Whole Foods or stop by received special offers - creating better experiences for existing customers and attracting new customers in the area. This campaign had one4.69 percentConversion rate (national average is 1.43 percent)
Combine location data with other data points
Location data is valuable for better understanding customer behavior and providing more personalized offers at the right time. However, it is still just a data point. To create the best customer experiences, marketing teams need to combine location data with additional insights to get a complete picture of needs and preferences.
Location data should be matched with attribution models such asUnified Marketing Measurement (UMM) to better understand the customer. Centralizing data in this way will not only shed light on marketing tactics based on real-time location, but also on creative preferences, the type of device consumers use when they shop, and historical data on what they bought.
Make sure location efforts aren't isolated from the rest of your marketing strategy, but rather serve to inform broader strategies to create a more cohesive view of your customers.
Additional tips and resources
- Location is playing an increasingly important role in marketing
- Mobile: How it's transformed attribution and marketing optimization