A background on Locations-based Digital Marketing

A background on Locations-based Digital Marketing

Digital Marketing has evolved quickly and with that, so has the way we communicate with potential clients and customers. In this article, we’re going to take a look at location-based digital marketing to see where it has come from and where it is heading. 

Locations-based digital marketing and advertising has seen significant change, improvement and uptake since early 2016. Locations-based marketing has been around for much longer than that, but marketers were slow in the uptake. Some forward-thinkers have been talking about location-based marketing since before 2010, but technological limitations meant their attempts were somewhat hamstrung.

The History of Locations-based Digital Marketing

Marketers have long been seeking a way to hyper-personalise our message to a targetted audience. We’ve gone away from the one-size-fits-all marketing model and instead prefer to create individual messages that respond to a customer’s unique problem. We want to be able to spark genuine conversations with our customers, rather than merely hoping they hear what we are yelling.

When mass-media (television, radio, newspapers) came, marketers saw an opportunity to present a message to an enormous audience. We came up with catchy slogans and engaged in consumer testing to see what message best appealed to the most people. If a marketing message caught the attention 55% of people, that was good enough for us, hell, that was magnificent!

Not anymore. We want complete engagement. We started by creating personas, giving groups of customers a name and marketing to smaller and smaller segments. Even then, some consumers were left out. We needed to find a way to address each customer individually.

Thanks to the internet and other digital technologies marketers have the power to tailor a message to respond to the unique situation or needs of every customer on an individual level. We do this by using the data available to us to learn as much as we can about each customer. We use this learning to create a message that responds directly to the needs or the situation of each consumer; creating relevant messages that are far more likely to invoke a response and thereby sparking the conversation we yearn.

Modern marketers have the power to tailor a message to respond to an almost infinite number of pain points for an almost infinite number of consumers. With the tools at our disposal, internet marketers can target customers by their demographic, background, gender, age, geographic location, favourite band, the car they drive, the clothes they prefer and their interests.

But we want more. Marketers dream of being able to send a message to a customer as they walk past a cafe on a hot day for their favourite cold drink. We want to be able to know a customer is in our shop who has been looking online for a particular type of computer laptop and we want to use that information to present them with a tailored, hyper-personalised offer. We want to not only appeal to who they are but also where they are and when they are.

The Boom of Locations-based Digital Marketing

Businesses and marketers started to understand the power of location-based marketing around 2016. We were now able to create bespoke messages and target individuals within a specific area. Marketing to individuals based on their immediate location showed higher conversions than broad-message marketing. And it should have, we know people wanted advertising that is relevant to them and their needs and now we had the means to deliver that in real-time.

Before 2016, the biggest barrier was the ‘active check-in’ – the need for a user to get out their phone, open an app, search for a location and then decide whether or not to share that location with others across social networks. The need for active check-ins led services like Foursquare, a location-based check-in app, to experience a slowdown in new user registration.

To make location-based marketing work we needed solid, reliable location data. That data wasn’t easily available until the major social networks started to treat locations data as a feature, not a service. Instead of people actively checking in on Foursquare, it was far more likely for users to tag their location to a picture, status update or video on a platform like Facebook, Twitter, or Instagram.

Once this location-data became available, so too did the opportunity to personalise our message to our consumers further and create advertising that was more relevant to each consumer. 

Why does Locations-based Digital Marketing work so well?

Consumers are becoming more relaxed with their data. This means there is more data for marketers to use to inform their campaigns. This isn’t the main reason for the rise of location-based digital marketing. The real reason is in the results.

Location-based digital marketing is so important to marketers because it works and there are three main reasons why it works.

  • It’s personalised.

We already know that a personalised message is far more likely to invoke a response from a consumer than a generic marketing message. Locations-based personalisation is no different.

There is no point trying to present a message to a user who has no desire or ability to act on that message. Learning what makes your customer tick and crafting a personalised marketing message to address that is far more effective.

Location data allows you to do that. Marketers can personalise a message based on the consumer’s location to create an offer that is more relevant to them.

We can go a step further. With location data, a marketer can personalise a marketing message that is more relevant to them based on where they are or where they live. We can use the little quirks and differences in language that come from living in different areas to further-personalise our marketing message.

  • It’s timely.

Location-based ads are delivered in real-time, and because of that, it means your message is sent out exactly when you need it to be.

Is it raining near your umbrella shop? Quickly send out an offer to target customers near your location who may need an umbrella. Timeliness gives your marketing an extra dimension and now, marketers can deliver their message to who they want when they want.

Bluetooth Beacons can be used by shop owners on specific platforms to let them know when a person enters their business and target an offer directly to them. Some may think it’s creepy, but to marketers, this represents an opportunity to personalise an offer directly to those who will find it relevant. Say someone enters your restaurant who likes cooking, send them an offer for that cooking class you’re holding every Wednesday.

This kind of technology works both for the consumer and the business. For the business, it gives them the opportunity to deliver a message to consumers in real-time in a relatively cost-effective way. For consumers, it gives them better access to the offers currently available at an outlet, allowing them to be more selective about which stores they spend their time (and money) with.

  • It’s relevant.

Most things in marketing come back to relevance. Long gone are the days of the generic blanket offer from the search ad campaign on Google. Now, marketers are looking for ways to make their ad more and more relevant to consumers. Even advertising platforms like Google Adwords and Facebook are encouraging advertisers to become more relevant to the needs of the consumer with metrics like the Google AdWords Quality Score, but that is something for another blog.

Location data gives marketers another dimension to target their message, meaning the message is more targeted and more relevant.

Localised digital marketing also offers marketers a chance to maximise their conversions by being able to target a message to those who are more likely to respond to it. A consumer’s location can help marketers determine what type of messages they will respond to and target their offer to the consumers in the location that will deliver the best return.

To be more specific; whether a consumer is at Newcastle Beach on a Saturday, shopping at Kotara Westfield or exploring the Maitland Sunday Markets will determine what type of marketing message they are likely to respond to.

Better ad targeting helps a message be more relevant. More relevant ads are going to result in less wasted clicks and less money spent trying to push advertising to the wrong audience.

How can you embrace Locations-based Digital Marketing?

Using PPC (AdWords, Facebook, Bing Ads etc.)

Location has been a dimension for serving targeted pay-per-click ads on platforms like AdWords and Facebook for a long time now. This is the most rudimentary form of location-based targeting, but it is still extremely useful.

Narrowing down your target area allows you to push a message to the audience most likely to respond or able to respond. For most small businesses, it is about spending your marketing dollars wisely and ensuring you are communicating your offer to those who can take action. 

Using Smartphone Apps

All smartphones now have some form of geolocation tracking built-in, whether that be via GPS or by triangulation using mobile-phone towers (like they do on CSI).

Most apps ask for location services to be activated when the user first uses the app. It may be an app to offer a loyalty discount, a catalogue or a shop but if the business has a physical location, they can use that app’s location data to distribute messages.

Starbucks has done this recently to send a discount or message to consumers with their loyalty app who are approaching a Starbucks store. They don’t measure the success of the campaign in click-through-rate, instead, they judge their success based on how many people visit the store after seeing the message.

According to Starbucks, having a personalised message delivered to a consumer nearing a Starbucks location made that consumer 100 times more likely to enter the store.

Using Smartphones and Smart Devices

Third party hardware offers business owners and marketing a whole new frontier for location-based marketing. With nearly a third of the world’s population owning a smartphone in 2017, several companies are building hardware to help businesses use the data available on these devices to market to them.

Again, we start getting into the ‘big brother’ world of location-based marketing, but overall it means higher returns for businesses and more relevant messaging for consumers. It’s not advertising that most consumers hate, it’s irrelevant advertising.

There are two main ways marketers can engage in location-based mobile marketing using a smartphone with 3rd party hardware.

  • Sensors

Technology like the Bluetooth Low Energy beacons, sensors and microchips that communicate with a smartphone NFC (near-field communications) chip are starting to become more familiar. These beacons are still relatively expensive to roll out (not to mention near-impossible to get ahold of) so adoption has been slow but it will pick up.

The sensor allows the reader to detect users within a set distance from it and collect data from their devices. The reader can also ‘push’ notifications to the consumer’s smartphone via the NFC chip. This notification could be an offer or some other marketing message, as well as multimedia, as the consumer nears the sensor.

  • Geo-fences

Geo-fences are virtual fences that use GPS, RFID, WiFi or electromagnetic technologies to allow marketers to collect data or deploy a message when a user crosses the virtual threshold. While Geo-fences are not expensive to set up, they do need to be paired with an app on the consumer’s smartphone that has location services enabled and active.

You’ve probably experienced crossing a geo-fence before without knowing it. On an Android device, consumers visiting a restaurant or cafe may be asked to leave a review for that business upon leaving. The consumer crossing the geo-fence triggers this notification asking for your review.

The ability to distribute a marketing message using a geo-fence is limited due to the smartphone owner having to allow permission for the app have access location data. Without this turned on, the geo-fence is useless.

Leaders in this space include tech giants Apple, Facebook and Google, as well as other forward-thinking companies like Esri and TripAdvisor. These companies are driving innovation in this space as a cost-effective way to deliver targeted messages to consumers.

What does the future hold for Locations-based Digital Marketing?

Locations-based Digital Marketing already feels like sci-fi but in reality, it is only in its infancy and has a long way to go before it reaches its full potential. The applications for marketers are fascinating and we’re confident locations-based marketing will become more and more prevalent as the technology becomes cheaper  and more accessible for businesses.

At the moment, the sensors in our phones and connected devices like smart-watches are limited to only telling marketers about the location of the device. In the future, we’ll be able to tap into optical and motion sensors, and we can correlate that with other available data to use for marketing. The new frontier for location-based technology is based on more sensors and getting more information about the user, the environment and their context.

Location-based marketing in the future will have the ability to augment reality. With more sensors analysing a user’s state of mind, stress levels, health, the weather around them, and a load of other factors, the applications almost become endless. And not just for marketers, for health professionals, emergency services, education, tourism and many more industries.

Imagine an app on your phone or smart device that guided you around the shopping centre, showing you promotions and exclusive offers as you passed each store. Imagine if you’re looking for your favourite bright blue wrist widget and your device could tell you which shops nearby have stock and which shops are offering the best deal.

In the not-too-distant future, location-based technology will allow stores to employ virtual shopping assistants, almost like an AI-enabled, virtual concierge. The technology could then be enabled to show the customer products they might like and offer them discounts on merchandise the AI knows they love.

This upcoming technology will blend Artificial Intelligence, Locations-based Marketing, Augmented Reality and Virtual Reality to create something that is of significant value to the consumer and the marketer. Smarter marketing, like the type of marketing that is enabled by locations technology, is something that everyone will be able to appreciate.

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