A technique called location-based marketing enables data-driven methods to their fullest potential. This is essential for any business as the world gets more digital. Marketing organizations may geotarget clients with amazing accuracy thanks to location data.
A pillar of the marketing industry in the twenty-first century is location-based marketing. It locates customers using a range of techniques and technology. It also aids in identifying and analyzing customer preferences. This marketing tactic significantly increases both in-store and online sales when used effectively.
What is location-based marketing?
With location-based marketing (LBM), businesses may specifically target customers with online or offline messaging based on their precise geographic position. Marketing teams can target customers based on criteria such as proximity to a store, local events, and more by using location data.
Location-based marketing has been proven successful throughout the whole consumer lifecycle, from engagement and retention through discovery and purchase. When done right, location-based marketing enables businesses to target particular client segments with offers while enhancing the customer experience for a society that places an increasing emphasis on quick satisfaction. For instance, location-based marketing could inform a potential customer that a product they’ve been eyeing is available at a nearby store, enabling them to buy it right away.
How does location-based marketing work?
Location-based marketing is a direct marketing tactic that notifies the owner of a mobile device about a deal from a nearby company by using the device’s location.
Location-based alerts are typically sent to mobile devices via SMS text messages. An alert could contain details on a local company’s offer of the day or a purchasing incentive, like a coupon code for a discount.
The consumer must consent to receive location-based marketing. When a user downloads a mobile app and selects “ok” when the app asks permission to access the device’s location, the opt-in procedure often occurs. The LMS’s technology makes use of geofencing, a form of software that employs triggers to deliver notifications whenever a device crosses a predetermined geographic border. As with any mobile marketing campaign, the objective of LMS is to attract the end user’s attention and convert him into a customer.
Location-based advertising is praised by proponents as a means of bridging the gap between online and offline customer interactions and encouraging impulsive purchases. If the data obtained by LBM is not used, shared, secured, and preserved properly, critics wonder whether it would lead to customer burnout and a breach of their privacy. Companies using LBM should provide strict opt-in rules and security measures to protect client privacy.
Types of location-based marketing
Let’s review the types of location-based marketing:
- Mobile targeting
A user’s location is determined through geotargeting, which then delivers customized messages to them based on their location. If a user has given permission for an app to access their location, they may receive push notifications or in-app messaging based on their position or how close they are to a store.
The act of drawing a line inside a particular area is known as geofencing. They will turn into active targets of the marketing plan whenever target audiences cross that line. This could imply that the brand sends them material, deals, or other kinds of messages. An area that includes a well-known shopping center where the business has a store is an illustration of a border.
Beacons are electronic devices that can connect to certain applications that are running within the beacon’s range using Bluetooth or WiFi. In order to create a target audience in a limited geographic area, beacons are really effective tools.
When advertisers target customers with adverts on their mobile devices, this is known as mobile targeting. The goal of marketers is to make their ads context-specific, which might be based on time, device, or location because consumers normally want to avoid advertising.
Geo-conquesting employs location information to steer potential customers away from rival venues. For instance, auto dealerships might erect a wall around a rival’s parking area. An offer to users will be delivered to a target consumer when they enter that zone, enticing them to visit the other dealer.
Location-based marketing strategy
Location-based marketing can benefit consumers and businesses alike in a variety of ways. Marketers may communicate with clients and prospects more precisely, raising awareness and fostering relationships. These ads’ targeted nature also frequently results in less money being spent. Customers receive customized offers at convenient times, improving their overall experience as they become more selective about the branded messaging they connect with. The following criteria is vital for a successful location-based marketing strategy:
- Increase traffic
- Create accurate ads
- Drive customers away from rival brands
- Create a better UX
By alerting consumers in the market to the closeness of a business and luring them with an offer, location-based marketing can increase foot traffic for local establishments like retail stores or food services.
Create accurate ads
Real-time location information can be used by marketers to develop more relevant, customized adverts. This is not always limited to a person’s actual location. Timing and messages can also be affected by location data. For instance, data may reveal that a customer is more likely to interact with an advertisement when riding the train or commuting, assisting marketers in choosing the best time to display an advertisement.
Copy and creative work can benefit from location data. Instead of using generic photos, marketing organizations could decide to use pictures of the city where the target consumer resides. Relevance and context have emerged as essential elements of messaging that are absorbed rather than dismissed. These requirements are satisfied by utilizing these real-time insights.
Drive customers away from rival brands
Marketers can gain market share by encouraging people to visit their store by focusing on users who are heading to a competitor’s business.
Create a better UX
You may give clients a better user experience by reaching out to them when they are most likely to require your services.
Marketers must take into account both their own location and the location of their customers for location-based marketing to be successful. Businesses situated on the street with little foot traffic, for instance, might not want to spend money on location strategies. Similar to this, establishments that are not on the ground floor, such as those in hotels or apartment complexes, should be cautious to only advertise to customers who are physically present in the building. Regular reminders may annoy people who have no interest in visiting the store and harm the reputation of the brand.
Before spending money on advertising, assess your consumer base and important external elements to understand how these strategies will affect ROI.
What are the advantages of location-based marketing?
Because you may target ads to customers who are nearby a specific business or competition using some of the technologies outlined previously, location targeting can help businesses increase in-store visits.
Marketers can leverage the results of advertising campaigns to gain deep insights into the purchasing habits of their clients by using visitor, audience, and trade area data. In the future, this can help to develop further consumer personas for even more pertinent and successful marketing.
Using location-based marketing strategies, you can fine-tune and segment your advertising to target potential customers based on a variety of factors, including time of day, shopping habits, weather, and more. This enables you to tailor your adverts, increasing conversion and enhancing return on ad investment.
Imagine simply paying for outcomes. Marketers can now use new performance models, like cost-per-visit (CPV) advertising, by utilizing location-based advertising. That implies that you only receive payment when customers enter the store. That increases your return on ad spend once more.
Location-based marketing examples
Below there are some brands that utilize location-based marketing strategies.
A location-based local push recommendation checks off two crucial boxes: it’s personalized and catered to the user’s current tastes. Both short-term and long-term user retention may benefit from this. It’s conceivable that a Yelp user will turn to the same company for a comparable recommendation on their next journey if they receive a useful tip from that business in one city.
Don’t be put off by firms that lack access to Yelp’s huge restaurant database. Regardless of whether you are connected to one or a hundred recommendations, this strategy demonstrates the worth of users both inside and outside of the app.
When is a user most likely to provide insightful criticism? When a brand encounter comes to an end? The client is considering how they feel about their most recent encounter. Google Maps is one tech company that effectively uses this.
After determining the user has finished their contact at a local business based on device location, Google Maps provides the customer a proactive request to rate their visit. The star choice is simple and efficient compared to having a form or boxes to fill out. The opportunity to interact with a captive audience is now.
Who doesn’t love free goods, especially when it comes from a well-known retailer like Sephora? This is the kind of push message that might be sent to app users who are close to a nearby store (within a particular range). This incentive is intended to boost the possibility of a full shopping basket as well as in-store traffic.
This alluring offer capitalizes on two crucial factors: It is succinct, and it emphasizes the numerous benefits of an in-person encounter.
How effective is location-based marketing?
Any retailer, supermarket, eatery, or other places where people go is a wonderful fit for location-based marketing. The physical footprint of these businesses syncs with location data, which makes for excellent use cases. Customers are encouraged to return, and their loyalty is increased when marketers build an audience based on previous actual visitors.
While location-based marketing works well for most businesses, there are some drawbacks. To reach their consumers, these brands frequently employ demographic targeting techniques. Other restrictions are imposed by regulatory bodies that have rules about audiences drawn from delicate areas, like points of interest in the health care system, and against the creation of discriminatory audiences.
The geotargeting tools that both Google and Facebook offer to make it simple for marketers to get started exploring location-based marketing. Their tools streamline the procedure and instantly distribute advertisements to audiences in specific places or geographic regions.
They switch to more sophisticated choices when their needs get more complex. These offer more alternatives for distributing such campaigns across the digital ecosystem, greater personalization when generating geotargeted audiences, and the capacity to generate audiences based on previous visits, such as visitors to their own sites or competitors’ locations.
Similar to any targeting strategy, testing, measuring, and refining are the keys to success with location-based marketing. While it might initially seem difficult, any marketer can easily plan and carry out effective geotargeting campaigns with a little practice and fundamental information.
Why is location-based marketing so attractive to marketers?
Because it enables them to deliver the consumers pertinent and targeted offers and messages, marketers adore location-based marketing. Location-based mobile marketing has been quite successful for many businesses. That comes as no surprise. It is user-relevant, data-driven, and tailored. Businesses experience a rise in engagement, conversions, and sales as a result.
Sales, according to marketing experts, are the main benefit of location-based marketing. Additionally, the Businesswire analysis demonstrates that location-based advertising strategies are 20 times more successful than non-location-specific ones.
Location-based marketing companies: Best data providers
Below we reviewed some of the best data providers for those who are looking for location-based marketing companies.
Through APIs and Cloud Location Services, LocationSmart offers location information. The data provided by LocationSmart covers 160 million cell towers and 15 billion devices worldwide. Mobile location data from the business improve location-based marketing techniques like geofencing and in-app messaging.
A provider of location data, SafeGraph has over 6.1 million POIs in the US and Canada. As a result of the company’s information on visit attribution trends, advertisers can create location-based audiences that can be modified in real-time.
The leading source of geolocation information is Skyhook. Geospatial Insights from the business provides location-based intelligence for over 20 million verified locations, visits from signal-confirmed devices, and dynamic behavioral and demographic segments. Marketers may build OOH ads that are based on the intent and loyalty of consumers by using Skyhook’s Context SDK to comprehend consumer visits.
The future of location-based marketing
The future for location-based marketing contains three significant elements: regulation, a proliferation of new data sources, and attribution.
Three important factors will affect location-based marketing in the future: regulation, the expansion of new data sources, and attribution.
New federal and state laws will require marketers and data providers of all kinds to adapt and change, starting in 2020 with the California Consumer Privacy Act. The advertising industry anticipates that more US states will follow California’s lead, with possible federal legislation as well. Similar regulations already exist in the European Union. The ultimate objective is a consistent framework that organizations and consumers can readily accept and that will increase transparency and control over data practices throughout the whole data ecosystem.
With the deployment of billions of new sensors via the Internet of Things, the implementation of 5G will produce enormous sources of extremely precise location data. Data is vital for a location-based marketing strategy. Compared to current cell phone towers, 5G towers must be grouped together more tightly. Due to the tighter clustering, cell phone operators can more precisely triangulate location than they can at the moment.
Faster upload and download rates provided by 5G will encourage the use of more internet-connected sensors across a variety of goods and businesses. As these zillions of sensors come online, they’ll produce data that can be used to evaluate product usage, consumption, and life cycles in addition to location data. This more detailed data will likely be viewed, analyzed, and used in different ways by regulators, marketers, and researchers.
Finally, advertisers will demand proof that their advertising expenditures increase foot traffic and sales as they hold their advertising spending more accountable. We are a long way from being able to demonstrate how particular in-store sales were influenced by digital campaigns or the majority of other marketing media. The number of disconnected data silos makes it impossible to combine meaningful and statistically significant results. While the point-of-sale system or online checkout can’t let those prior touch points know the sale happened, the TV advertisement can’t let your phone or laptop know it was also seen.
Given the difficulties in connecting internet ads to offline sales, marketers are employing location data to adopt a macroeconomic view of attribution. The effectiveness of their location-based marketing spending is assessed by looking at how their campaigns affect foot traffic at both their own locations and those of their rivals.
Ethical considerations in location-based marketing
All businesses involved in the advertising ecosystem should place the protection of customer privacy as their top priority. With location-based marketing, businesses only gather location data from customers who have given their consent before aggregating and depersonalizing the information.
Since a single audience offers little to no value, marketers do not use this information to target specific individuals. Delivering advertisements to huge groups as opposed to solitary individuals is significantly more effective at reaching audiences who exhibit comparable habits and features.
Furthermore, the industry self-regulates through organizations like Network Advertising Initiative and TrustArc, despite the fact that there is little federal or state regulation governing what data can and cannot be gathered or how it is utilized. They are essential to the industry’s efforts to safeguard consumers and to keep them informed about impending legislation.
It isn’t easy to undervalue the power of location-based marketing. Around 83% of marketers claim that using location data allows them to conduct more effective ads, according to MarTech Series.
They gain from it in a variety of ways. This technology not only assists marketers in acquiring new customers but also strengthens their existing ones. This is so that they may better meet the needs of their customers and increase response and customer engagement by using location-based advertising and marketing strategies.
New opportunities are presented by each of these shifts. Because of the effectiveness of location-based marketing, marketers will keep spending money on it. The cornerstone of any effective campaign is having an understanding of what works and what doesn’t.