Opportunities in Location Based Marketing

10th April 2017

Location based marketing really began to get going with the advent of the smartphone. Before this, previous incarnations of mobile internet had proved to be two slow and cumbersome to properly connect with the mobile consumer. From a marketing point of view, they also lacked easily accessible GPS signals and other means of identifying a location.

Whilst some marketing agencies branched out in to supplying specialist content to shoppers via Bluetooth, it was not a huge success.

Once the genie of Wi-Fi and real mobile data was out of the bottle a number of companies, most notably Foursquare jumped on to the bandwagon, providing both convenient location data for users planning meetings or looking to see if friends were in the area for an impromptu coffee, as well as for business wishing to run loyalty discounts and co-promotions with nearby stores.

 

Activating Consumers with Location Based Ads

The juggernauts of Facebook, Yelp and Instagram joined in once they were sure there was an emerging profit centre to be tapped. But there was a problem to be addressed, that of the means of activation of the ads.

Most ads that are triggered in store are still tied to using low power Bluetooth as their means of access to the customer. Whilst there is no problem using this if the customer is participating in the experience, if the customer has not downloaded the app or has not activated the location services in the phone (perhaps to save battery, or because they are simply not aware of the benefits) then it is likely that this will not connect with users.

 

Targeting Location Based App Downloads

There are currently two real models in play for encouraging app downloads. These are to target in store shoppers with point-of-sale information, or to get customers to leave an email address or mobile phone number that can later be used to market the benefits of the app. The alternative method is to use an existing app or social network that is already location aware to push information towards customers using advertising on those platforms.

With around £80 billion pounds expected to be spent on mobile advertising this year, it seems likely that it seems like a mix of the two methods will become commonplace for shoppers.

 

Activating the Consumer in a Location Enabled World 

Of course, getting the app to the consumer is only part of the issue. You need to provide a pretty good reason for your customer to use the app. This could be in the form of discounts or points. But if the discounts are not noticeable in the final bill (let’s imagine the impact of a 5% discount on the average Primark purchase, for instance) then customers will still not engage.
IKEA App

There is also an issue for premium brands. They do not wish to be seen to discount their products, but would still like to collect data on the users shopping habits to help in their marketing efforts. For many of those brands, the solutions have been to create augmented reality experiences. From a Tokyo aquarium using on-screen animated penguins to guide visitors to the attraction, to IKEA’s use of their app to show their furniture in your home, there have been many interesting applications for this emerging technology.

Another format being pushed by technology companies is to give more information about products. IBM has showcased an app that allows customers in grocery stores to find out nutrition information and recipes that can be prepared using the items on sales

The future for location based marketing looks bright, particularly as the likes of Google and Facebook continue to push both the technology aspect and the advertising that goes along side. However, in such a new industry, whether the current approaches can even still be seen in as little as five years’ time remains to be seen.