With 78% of marketers increasing their spend since June alone, there is no doubt the location-based advertising wave is strong and truly being leveraged by almost all movers and shakers in the advertising industry.
For those new to the term, or still struggling to full grasp the concept, here is a quick rundown of the technology, and how some brands are utilizing it.
What Is It?
Location-based marketing is centered on the fact that most of the businesses we visit, we're accompanied by our mobile phones, and most of the apps we use involve sharing our location data - thus creating an incredible opportunity for marketers to be able to share messages to consumers based on where they are. Location-based marketing ties together people, places, and media.
Think about where your ads are served to you - Facebook, Instagram, Safari. Coincidentally these are a few of the main apps I spend my time on whilst on my iPhone, all with enabled location services.
So, imagine you're walking through your local shopping center while you browse your phone. You see an ad highlighting 20% off at Zara - unfortunately; your mall is yet to house the European retail giant. The ad goes ignored. Contrastingly, your local mall is home to a brand spanking new Zara, you're served an ad promoting that specific Zara location, highlighting the 20% discount code. Suddenly, they've got your attention.
To build upon this, brands with apps are also joining the location-based marketing movement. Think about your Starbucks app - and the discount notifications when you're near a store.
This is a very simplified example of location-based advertising, and there are a plethora of creative opportunities available for brands to get involved, however - the principle is there.
The Privacy Barrier
Few recent consumer studies show a willingness to share personal data such as location, highlighting the fact that although it may be easy for consumers to engage with location-based campaigns, it doesn't mean they will. According to a consumer survey by Boxever, 60% of consumers indicated that they want offers that are targeted to where they are and what they are doing, contrastingly 62% said that they don't want brands tracking their location.
However, don't let these mixed results deter you. Where there is a will, there is a way, and a recent Microsoft study entitled "The Consumer Data Value Exchange" found that way. 89.3% of consumers said they would share data for location-based discounts, and a whopping 99.6% of consumers agreed they would share data for cash rewards. The study also found that 65.2% of participants would share their data for loyalty points, thus meaning although monetary rewards are particular successful in persuading consumers, as long as the offers are contextually relevant the campaigns would be received positively.
Consumers want a frictionless journey as they move between channels and devices, an experience that enhances their day-to-day, and now with mobile representing the expansion of retails storefronts, it's time for all marketers to make the leap forward embracing location-based marketing.
Here are some great examples showcasing how you can get involved:
A great example of a brand that is utilizing location-based marketing technology is Starbucks. The app uses a customer's proximity to a store to allow that customer to place and order ahead of time. Starbucks have also experimented with tracking user's device ID and location, and then serving them targeted ads based on that information.
According to Starbucks, the likelihood of a person entering a store increased by 100% after seeing a location-based ad.
Van Leuween, an ice cream store in New York City, allowed users a mobile payment option and subsequently used this feature to track the location of the user. Using the PayPal app, users were tracked through geolocation and advertised to with special offers and deals whenever they were by the store.
According to a forecast from eMarketer, mobile transaction payments will have increased by 210% this year. By capitalizing on this trend and utilizing mobile payment partners that encompass mobile tracking, the chances of you being able to influence the buying power of a customer will increase.
Barneys New York recently leveraged beacons to digitalize its flagship store in Manhattan. As a part of the beacon campaign, the app will notify the user based on what's in stock that's also in his or hers mobile shopping bags or wish lists, as well as recommendations based on the content that he or she recently opened on The Window, Barneys' in-house publication. This is a perfect example of how brands, combined with programmatic technology, can leverage location with acute precision to influence everything from awareness to in-store purchase intent.
Consumers are increasingly becoming more open minded about their data being shared in exchange for a heightened experience, and by being open and straight forward with consumers, while utilizing specific tactics to push past the privacy barrier, it is only a matter of time before this becomes one of the main channels in digital advertising. Although many are still trying to figure out how this technology fits their marketing models, those that tap this technology in the near future will gain a competitive advantage.
Experiment, learn, adjust, repeat - and you'll know when your next customer is right around the corner.