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Location-based mobile marketing

Consumers tend to be a bit ho-hum when asked if they would appreciate being sent location-specific deals in real time based on their distance from a specific shop, hospitality outlet or service provider. The reason for this seems to be unclear (have a read of last week’s blog here for more detail). But, overall, it seems people would rather have the option of receiving location-based marketing messages on their mobile device than not, and many would take the opportunity and use a voucher if sent one.

Whether the ambivalent attitude about this modern marketing format is because a percentage of the population feels it is intrusive, or maybe slightly 1984-ish, is unclear. Either way though, the resounding evidence is that, given a voucher, for example, a higher percentage of people would be likely to use it in their local outlet, than not.

And that, in itself, is a reason to take a closer look at location-based mobile marketing and determine whether it is a tool your business could utilise.

So, let’s start from the beginning.

Geofencing and hyper-localised targeting

It’s the way of the world, as anyone with a smartphone in 2014 will tell you. Almost every time you download an app, the first thing it wants to know is where you are. According to statistics from the 2012 Internet and American Life Project by the Pew Research Center, nearly three-quarters of smartphone users utilise their device to retrieve location-based information, whether that be directions, the nearest pizzeria or the weather.

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With an almost unlimited knowledge of consumers’ locations, through smartphone apps, marketers are able to hone in on this knowledge and offer hyper-localised ads to their target market. This is known as geofencing – i.e. the concept of targeting consumers as they wander past your store, or into the city block in which the store is located.

Placecast

Placecast was one of the pioneers of geofencing and now work with major retailers including Starbucks and the Subway restaurant chain to deliver location-based marketing. The company has, according to some sources, now set up geofences around approximately 262,000 locations in the United States and the United Kingdom, and it claims 50 per cent of customers who have subscribed to its ‘Shop Alert’ service have visited an outlet after being notified of an offer, with 22 per cent leaving the store only after purchasing an item.

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iBeacon

About a year ago, Apple included iBeacon in its iOS7 updates. It’s a location-based awareness capability known as an indoor positioning system that will potentially allow marketers to push location-based marketing messages to huge audiences, as well as allow retailers to understand how consumers are moving around a store. It is definitely ultra-modern, and does have that creepy factor to it, probably for this reason, but it is being picked up by savvy marketers across the globe as a way to deliver location-based messaging. Major League Baseball in the United States recently announced it would have iBeacon capabilities in 20 stadiums operating this season.

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As Brian Jackson of it business.ca explains: “iBeacon isn’t a piece of hardware, but rather a technology protocol that takes advantage of Bluetooth Low Energy devices. It allows a device to detect a compatible smartphone within a short range and push a number known as a universally unique identifier to a device. From there a smartphone takes over, assigning that number to an app that recognizes what action should be triggered as a result. An iBeacon can detect when a device falls into three different range categories – a few centimetres away, within a couple of metres, or 10 metres or further away.

For marketers, it means opportunities to trigger events on consumer devices that support Bluetooth 4.0 (such as newer iPhone and Android devices) through an app. For example, a coupon for a cup of coffee could be pushed to a consumer walking by a coffee shop on the street. Marketers could also monitor what regions of a store environment see heavier traffic or lighter traffic with the right analytics tracking software.”

To the future

While location-based mobile marketing is still a growing field, it seems to be one with infinite possibilities, and a concept that is definitely worth some consideration in digital strategies moving forward. If your head is still swirling with the possibilities, here is a great infographic by MDG Advertising about how location-based marketing delivers ads. And for more inspiration, have a look at The Location Based Marketing Association’s site and blog. Great food for thought.

What do you think? Have you considered using location-based marketing? Are you currently using it? We’d love to hear your thoughts.