Mobile Location

It’s Location Location Location for Business

Remember when Location Based Marketing was the next big thing?  The first time? Back then the hype was around the idea of customers being drawn off the streets and into stores by special offers sent to their phone.  The concept always sounded good to marketers, and not so good to ordinary people.

These days we are using location in our smartphones more than ever, and people are feeling a lot less anxious about the use of their location in targeted services.  According to the Pew Institute, 74% of adult smartphone owners say they use their phone to get directions or other information based on their current location. And 30% of adult social media users have set up at least one of their social accounts to share location in their posts. It certainly seems as though the use of location is a routine part of a smartphone user’s daily life.

The reality of course is that location based marketing is not some new kind of campaign.  Marketing has always been about location.  When brands want to engage with their customers, they need to know where the customer is to present the message in context.  A TV ad is designed for watching at home, a bus shelter ad while waiting outdoors, a radio ad while driving to work. The only difference now is that we are able to know more about where our customers are.

To a small business or retailer with a location specific customer base, Location is fast becoming one of, if not THE most important targeting mechanism.

As technology makes it possible to place our customers at increasingly specific locations, the pace of innovation in marketing increases.  We are now talking about location using terms like hyperlocal, meaning we know when a potential customer is standing right in front of a specific display in store. Being able to place a customer so accurately opens up a whole world of opportunity for brands and advertisers, with particular benefits for retailers and small businesses.   While location is almost always relevant, to a small business or retailer with a location specific customer base, it is fast becoming one of, if not THE most important targeting mechanism.

Location at the macro level is nothing new. Marketing messages have been delivered with location targeting on digital platforms for many years.  While online location targeting is limited to known databases or the IP address of their internet provider, smartphones have made it possible to reach mobile customers down to a few metres with GPS co-ordinates.

Early innovators like Foursquare introduced the idea of advertising to customers who check in to a specific business or location. While initially the opportunities existed only for the business that checked into, Foursquare have now launched Post Check In ads, which enable brands to promote relevant offers based on the location of a check in. Facebook was quick to follow the check in trend, introducing local check in and taking advantage of the opportunities presented by location.   Facebook advertisers can target ads based on a customer’s location so that only people within a specific suburb or radius from a business will see the ad.  Free features on Facebook and Google revolve around the concept of a local business page, which business owners can claim or create.  Both platforms then promote businesses to customers based on location.  Digital media networks and platforms offer retargeting opportunities to reach customers who have previously been at a particular location, such as a retail store, a music or sporting event or festival. A successful campaign in the US from Piaggio Group retargeted customers who had previously visited Vespa dealers and retargeted them with location specific ads. The campaign saw a 4.69% increase in CTR.

Google has always had a strong focus on location targeting with their search advertising, claiming that as many as 97% of consumers search for local businesses online.  That number is almost matched on smartphones these days, with 90% of smartphone owners using local search on their device, 78% at least once a month.  In fact Google’s Our Mobile Planet research identified some compelling behaviours from consumers who found a local business using their smartphone.  48% had actually visited a business as a result and 31% had made a purchase in store.

Google Our Mobile Planet Research for Australia, 2013

AU NZ Local Search Action

A location related phenomenon known as Showrooming has taken local retailers by surprise in recent years.  Customers browsing in store are now using smartphones to look up price information and better deals online.  In effect they are using retail outlets as a showroom for online shopping.  By using location technology, retailers can combat showrooming and bring customers back into the conversation while in store.  Some stores now offer free WiFi to customers as they browse their shelves.  By bringing customers onto their own network, there is greater opportunity to engage them with content.  The most successful responses to showrooming are those that identify when customers are in store and reach out with targeted offers that trump what is available online.

Another radical angle on showrooming is known as geo-conquesting and it is taking competitive activity to a whole new level.  Some advertisers are making the most of GPS technology in smartphones to reach customers as they spend time in and around their competitor’s stores. This can be done by placing location targeted display ads on the kinds of apps and sites that are used to price check and search products while in store. Google ads can also be placed against search terms based on the location of the searcher.  So customers searching for information about TVs while in Harvey Norman might see search ads in their results offering TVs for 15% less than Harvey Norman’s prices.

A very small  ‘beacon’ transmitter can now be built into almost anything – a door, a vehicle, a store display, a handbag – and it can communicate with nearby smartphones using Bluetooth Low Energy.

Shopping centres and precincts have begun to see the opportunity in targeting mobile customers as they move throughout a centre.  Location technology can now detect when a customer is in the vicinity and offer targeted promotions based on their location.  Although we have seen some trials of this kind of activity in Australia and New Zealand, it is still early days.  As customers become more aware of the possibilities, brands and retailers will certainly respond.

Some of the most interesting location based innovation is happening at the micro or ‘hyper’ location end of the market.  In late 2013 both Google and Apple launched upgrades to their operating systems to support tiny, low cost transmitters called Beacons which can communicate with a smartphone or tablet via a form of bluetooth.  Basically, a very small ‘beacon’ transmitter can now be built into almost  anything – a door, a vehicle, a store display, a handbag – and  it can communicate with nearby smartphones using Bluetooth Low Energy. The technology is called Bluetooth Low Energy (BLE) and the enabling software is already in the hands of most smartphone users in Australia if they have a recent version of the operating system on their device.

payPal-beacon--644x362

PayPal Beacon plugs into any powerpoint and identifies when a customer is in store.

BLE has opened up a world of opportunity for marketers. With a wireless sensor placed in any location, targeted data can be transmitted to nearby customers. Obvious applications include placing sensors in store displays, which then prompt passing customers with promotions, product information or personalised messages.  This video demonstrates a new product called Estimote, which shows how a retailer could make iBeacons work in store.

 

Estimote

Estimote beacons are placed in store and trigger alerts to customer’s smartphones.

This fun infographic from MDG Advertising explores the future of proximity and micro location marketing.  it illustrates the ins and outs of using Apple’s iBeacon, Microlocation based platforms like Nearbuy, as well as Social Media and foursquare. It also identifies opportunities for marketers to use real time location specific data to better understand customer behaviour.

mdg-infographic-the-future-of-proximity-and-micro-location-marketing_cutoff

Using in-store promotion and branded retail apps there is significant opportunity to build customer loyalty with location specific offers.  Google’s Passbook held much promise for that kind of service, but has so far failed to live up to expectations.  Many large retailers have developed in store offers and coupons for redemption using Passbook, with Sephora providing a good example of what is possible when you work with the available technology.  In Australia and New Zealand, Passbook has been largely ignored and to date we have not seen a widely adopted platform  that enables location based solutions for brands.

In the meantime there is plenty of opportunity for local retailers, brands and businesses to reach out to their customers based on location.  Whether it be via existing media platforms or branded apps, the key is to focus on the relevance of location. A recent article in CMO Australia looked at a number of local initiatives that take advantage of the geo-targeted marketing revolution.  They identified that the key to success is not so much about the technology as the quality of the marketing offer.  As always, it’s important to start with the customer and work backwards.   A location oriented business could ask the following questions to identify the best location based marketing opportunities.

How to Identify Opportunities In Location Based Marketing

  • In which locations would you most like to reach your customers? 

eg. When they are in a nearby suburb, while they are browsing your retail outlet, or when they are researching competitor products.

  • What are the various ways you might be able to engage with them at this time?

eg. Location targeted ads on a social network or search engine, alerts triggered by a beacon as they pass by, an in-store poster promoting special deals for customers who download an app

  • What is the specific message you’d like to share at this time? 

eg. Special offers, new stock, competition details

  • How can the message be made more relevant by knowing their location?

eg. Time specific offers for immediate redemption, price matching on competing products, management of stock fluctuations in real time.

An Example Scenario:

A department store might like to reach customers when they are browsing fashion and let them know there is a 2 for 1 offer on shoes. They could do this by encouraging member customers to download an app so that offers can be shared when they are in store.  When a customer passes a Beacon in women’s wear it would generate an alert within the membership app.  In store customers could be directed to footwear to redeem the 2 for 1 offer.

It has been said that Location is the new Cookie.  Interestingly, the same could have been said in reverse a few years ago.  If Cookies were simply a digital way of ‘following’ a person as they navigate around the web, then Location information has always been a way of ‘following’ a person around the real world.   Location is not the new Cookie, it’s just Location!  Knowing a customer’s location means we can offer targeted products, services and messages in the real world as comfortably as we have become accustomed to doing in the digital world.

Now more than ever, the real estate adage ‘Location Location location’ applies to all things marketing.  With smartphone penetration approaching 70% in Australia, the ubiquity of location data means a customer’s location can become relevant at every stage of a business and marketing strategy.   Price setting, promotions like special offers & coupons, direct marketing, and even product customisation can be impacted by new opportunities using location.

 

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