Do you know how mobile device localization helps you achieve your marketing goals, build more effective campaigns, and increase your ROI?
Location-targeted mobile ads, which accounted for 38% of total mobile advertising in 2017 ($12.4 billion), are expected to grow year after year, reaching 45% in 2021 ($32.4 billion). This estimate comes from research and consulting firm BIA/Kelsey, source IABBrasil.
We're talking about location-based marketing . This practice isn't new to the market, but with today's technology, it's possible to do incredible things that were previously unimaginable.
This is a comprehensive guide on everything you need to know about location-based marketing . Keep reading to learn how to make the most of the technology available to your potential customers to help grow your business.
What is location-based marketing?
Location-based marketing is using a mobile device's location to alert the owner of an offer from a nearby business, creating a one-on-one relationship to deliver the most relevant message in the right place at the right time.
For example, you're in the city center and receive a notification informing you that an electronics and computer store 1 km away has put on sale that cell phone you searched for online last week.
How Location-Based Marketing (LBM) Works
Location data comes from mobile devices. Sensors are used to understand and identify these devices. This process is anonymized so that the user's personal details are kept confidential. These sensors come in a variety of forms—which we'll explore later.
How Localization Helps You Achieve Your Marketing Goals
Imagine this: an entrepreneur owns a restaurant chain in a large metropolitan area. He knows that most of his customers live within 5 miles of one of his establishments. In the past, he would have paid for a radio campaign to attract these target customers to one of his restaurants.
However, the problem is that 95% of the people who will hear the campaign don't live within 5 miles. This means he wasted 95% of the money invested on people who won't come to his restaurant.
Through MBL, our entrepreneur has greater targeting power—they can target their ads specifically to people within 5 miles of their restaurants. Not only that, they can also increase message personalization by aligning the ad not only with the potential customer's current location but also with the right timing.
The result: greater personalization in your message and a higher chance of conversion. Consequently, less money wasted and a higher ROI.
6 Types of Location-Based Marketing for Mobile Devices
1. Location Triggered Advertisement
This is the first and most basic type of mobile MBL. It uses the user's location obtained through one of the positioning technologies to deliver messages (text or multimedia) or app alerts based on the user's preferences and opt-ins (whether the device owner has authorized receiving emails with communications, newsletters, and/or promotions from that company).
The most common technology used in this type of mobile marketing is geofencing – establishing a virtual boundary around a physical location. Messages, once activated, are delivered whenever a consumer enters the geofencing . The radius can range from several meters to several kilometers when used outdoors.
2. Location Based Social Media
Services like Foursquare, Facebook Places, and Twitter enable two-way communication and direct customer contact. This type of MBL provides businesses with opportunities to create an interactive in-store experience that leverages the technology in their visitors' pockets—an experience that will convert them from browsers to buyers, and from past customers to loyal fans who act as advocates in both the real and virtual worlds.
3. Check-in Based Contests and Games
This type of MBL rewards users with virtual and/or tangible prizes for visiting certain locations and “checking in” and/or completing specific tasks (such as taking a photo or eating a special dish).
There are two types of location-based contests or games used for marketing purposes: a) using existing location-based gaming platforms; b) using one or more location-based social media platforms. This type of MBL is a powerful way to engage customers in active interaction with the brand.
4. Local Search Advertising
Promotes ads for local points of interest (retailers, restaurants, etc.), based on the geographic location of a mobile device. For example, when you search Google for "pizzerias nearby," the results are a selection of the best pizzerias near you. Some of these ads are paid ads, which will appear to potential customers within a certain radius, pre-established by the advertiser.
Did you know that a local search doubles your chances of closing a sale compared to non-local searches? The reason is that customers who search locally have a higher purchase intent.
Check out: Local SEO: the 9 vital factors for ranking in a local search
5. Location Branded Application – Location-based branded applications
They are mobile applications, created by a company, to promote its brand.
They can exist in the most different formats:
A simple mobile app featuring content from the brand's website. For example, a newspaper might offer a branded app featuring information, articles, and content from its website in a mobile-friendly format.
A game. For example, to promote the launch of a new model, Audi created a branded app with a "driving challenge" game. A strategy like this, when done well, is a surefire way to boost word-of-mouth marketing.
An additional and/or related service . For example, McDonald's created a branded app that allows customers to place orders from their smartphones and then pick up their orders at a McDonald's location at a specified time.
6. Proximity marketing
Refers to the localized, wireless distribution of advertising content associated with a specific location. This type of MBL is not tied to geographic coordinates, but rather to a distance using short-range wireless technologies such as Bluetooth, Wi-Fi, and NFC (Near Field Communication).
NFC is a radio communication that is activated when two devices, or a device and an NFC chip, touch each other or are in close proximity (usually no more than a few centimeters). This gives marketers a platform to create a new level of in-store interaction with a customer.
5 technologies for primary data collection
1. GPS
If someone is using a mobile app while traveling, there's a good chance a software developer kit, or SDK, has been implemented, which transmits various types of information to a server. The app can access the device's GPS function with great precision, determining its current or past location and publishing a real-time ad based on that information.
2. Indoor Geolocation Technology
This type of technology combines various signals emitted by smartphones, such as Wi-Fi, accelerometer, compass, and GPS, to infer a device's location with a precision of two meters. Using this information, it's possible to target mobile ads based on the target audience's location, ensuring that ads engage with the consumer in a contextualized manner.
3. Beacon
A type of "antenna" capable of detecting mobile devices and acting as an intermediary between an app and the store or products. Unlike other geolocation technologies, a beacon is a single-way transmitter, sending the signal to a smartphone (or other type of receiver). To work, a specific app must be installed on the device to interact with the beacons. This ensures that only the app installed on the device can track the user.
4. WI-FI
Locating through access to a free Wi-Fi network, whether in a public place, a corporate environment, or even a coffee shop, is more accurate than GPS data and is also widely used to complement indoor geolocation. The only limitation is the Wi-Fi signal itself, which can be as broad or narrow as the signal provider determines.
5. Carrier Data / IP Address
Location data provided by the telecommunications operator. This data offers a lower degree of accuracy, but is the most widely available type. The IP address provided to the user by the operator is used to determine their current location.
Privacy issues
It is the duty of whoever collects this information to obtain the user's permission and to disclose their privacy policy in a simple and concise manner, specifying how it will be used and shared.
The law defines which practices are permitted and which are not and should be used as a basis. However, because legislation fails to keep pace with market changes, it leaves many questions unanswered.
The user must be respected. The best way to achieve this is through a transparent relationship, with clear opt-in and opt-out options. Applications that, in exchange for permission, improve their services and enhance the user experience tend to rely on the public's willingness to share their data.
Context-aligned content is crucial for location-based advertising
LBM only works well within the appropriate context. It's not enough to know where a person is coming from and where they're going. You need to understand their preferences, habits, and where they are in the consumer journey.
The smartest brands are realizing this and ensuring that their ads not only focus on the location they're portraying, but also align with the mindset and lifestyle of those in the area.
They do this by examining past consumer behavior and creating audiences based on visitor data—the “real-world cookies”—where a consumer is, where they’ve been, and where they’re going says a lot about who they are, if measured properly.
Location has effectively infiltrated every media format we see in the market today. With new data sets collected and distributed every day, advertisers have greater potential to leverage these statistics and produce ads that truly speak to their target audience.
Get it right and you'll make your target audience think, "Is this ad speaking to me?"
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