Do you know how mobile device location tracking can help you achieve your marketing goals, build more effective campaigns, and increase your ROI?
The forecast for location-targeted mobile ads, which in 2017 accounted for 38% of total mobile advertising (US$12.4 billion), is to increase its share year-on-year, reaching 45% in 2021 (US$32.4 billion). This estimate comes from the research and consulting firm BIA/Kelsey, source IABBrasil.
We're talking about location -based. This practice isn't new to the market, but with the technology available today, it's possible to do incredible things that were previously unimaginable.
This is a super guide on everything you need to know about location-based marketing. Keep reading to understand how to make the most of the technology available in your potential customers' pockets to grow your business.
What is location-based marketing?
Location-based marketing is using a mobile device's location to alert its owner about an offer from a nearby business, in order to create a personal relationship and deliver the most relevant message in the right place at the right time.
For example, you're downtown and you receive a notification informing you that an electronics and computer store, 1 km away, has put on sale that cell phone you researched online last week.
How does location-based marketing (MBL) work?
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 remain confidential. These sensors come in a variety of forms – which we will see later.
How location helps you achieve your marketing goals
Imagine this: an entrepreneur, owner of a restaurant chain, in a large metropolitan area. He knows that most of his customers live less than 8 km from one of his establishments. In the past, he would have paid for a radio campaign to attract these target customers to one of the restaurants.
However, the problem is that 95% of the people who will hear the campaign live within 8 km. This means he wasted 95% of the money invested on people who won't go to his restaurant.
Through MBL, our entrepreneur has greater targeting power – they can specifically link their ad to people within 8km of their restaurants. And that's not all; they can also increase message personalization by aligning the ad not only with the potential customer's current location but also with the right time to advertise.
The result is: 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 announcements, 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. Once activated, messages 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, or Twitter enable two-way communication and direct contact with the customer. This type of MBL provides business opportunities to create an interactive in-store experience that leverages the technology in the pockets of its visitors – an experience that will convert them from browsers to buyers, and from long-time 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 means of engaging customers in active interaction with the brand.
4. Local Search Advertising
It promotes ads for local points of interest (retailers, restaurants, etc.), depending on the geographic location of a mobile device. For example, when you search Google for "pizza places nearby," the result is a selection of the best pizzerias near you, and some of them are paid ads that will appear to potential customers within a certain radius, pre-established by the advertiser.
Did you know that in a local search your chances of closing a sale double, compared to non-local searches? The reason is that customers who perform a local search have a higher purchase intent.
Check it out: Local SEO: the 9 vital factors for ranking in a local search.
5. Location-Branded Applications – Location-based branded applications
These are mobile applications, created by a company, to promote its brand.
They can exist in many different formats:
A simple mobile app with content from the brand's website. For example, a newspaper could offer a branded app with information, articles, and content from its website in a format compatible with mobile devices.
A game. For example, to promote the launch of a new model, Audi created a branded app with a "driving challenge" game. Such a strategy, when well executed, is a sure-fire way to generate 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 specific time.
6. Proximity marketing
This 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 to a distance using short-range wireless technologies such as Bluetooth, WiFi, and NFC (Near Field Communication).
NFC is a radio communication that is activated when two devices, or a device and NFC chip, touch each other or are in close proximity (usually no more than a few centimeters). This gives marketers an opportunity to create another level of in-store interaction with a customer.
5 technologies for collecting primary data
1. GPS
If a person is using a mobile app while on the move, there's a good chance a Software Development Kit (SDK) has been implemented, which transmits different types of information to a server. The app can access the device's GPS function with great accuracy, determining its current or past location and publishing a real-time announcement based on that information.
2. Indoor Geolocation Technology
This type of technology combines different signals emitted by smartphones, such as Wi-Fi, accelerometer, compass, and GPS, to infer the location of a device with a precision radius of two meters. From this information, it is possible to target mobile ads using the target audience's location, ensuring that the ads interact with the consumer in a contextualized way.
3. Beacon
A type of "antenna" capable of detecting mobile devices and serving as an intermediary between an application and the store or products. Unlike other geolocation technologies, the beacon is a one-way transmitter, sending the signal to a smartphone (or other type of receiver). To function, a specific application must be installed on the device in order to interact with the beacons. This ensures that only the app installed on the device can track the user.
4. Wi-Fi
Location via 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 comprehensive or restricted as the signal provider has set.
5. Carrier Data / IP Address
Location data provided by the telecommunications operator. It 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 responsibility of whoever collects this information to obtain the user's permission and disclose their privacy policy in a simple and concise manner, specifying how the information 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 cannot keep pace with the rapid changes in the market, it ends up leaving many questions unanswered.
The user must be respected. The best way to do 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 have the public's willingness to share their data.
Context-aligned content is crucial for location-based advertising
Lifecycle Marketing (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 their consumer journey.
The smartest brands are realizing and ensuring that their advertising not only focuses on the location where it will be featured, but also aligns with the mindset and lifestyle of those in the area.
They do this by examining past consumer behavior and creating audiences based on browsing data – the “real-world cookies” – where the 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 all media formats we see in the market today. With new datasets collected and distributed every day, advertisers have greater potential to leverage these statistics and produce ads that truly speak to their target audience.
Do it right and you'll make your target audience think, "Is this ad talking to me?"
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