Using a user’s geographic location data to push information about services or offerings nearby or in the user’s proximity—primarily through mobile devices over a network—is called location-based services. Location-based marketing has grown in the last decade due to the increased adaptation of smartphones and tablets.
Location-based marketing utilizes services to match a user’s location, for example discovering the nearest ATM, checking the weather forecast for your location, tracking a vehicle’s distance from the user, etc. When done correctly, it is effective, targeted, and ROI-impacting; otherwise, it can easily turn away your customers. Success lies in doing it right for your customers.
Push or Pull Marketing?
It is a mix of both: It is pull when a user seeks information based on his geographic location, for instance when a user searches for the nearest restaurants on their mobile device.
It is push, for example, when you receive an SMS on your mobile device when you are at the mall to buy ice cream on the 2nd floor with a 30% discount.
Applications of location-based services include:
• Location-based games & AR
• Location-based advertising
• Business intelligence & analytics
• Emergency support & disaster management
• Tracking, mapping, discovery, & information
Early adopters of location-based marketing
Active check-in using tools like Foursquare, Gowalla, and Whrrl has been well known in the location-based industry for some time now. The current trends are more about the passive use of location to share location-specific information to the end-users.
Facebook and Twitter are now embracing and pushing users to tag updates based on their geographical location, Google News is now customized to your location, and any search with queries ending “near me” are a few classic cases. For instance, “ice cream near me” gives authorization for Google to use your location and show the most relevant search results in your proximity.
6 Ways location-based marketing is helping you do business better:
1. People flow analytics and security: Helsinki airport manages the flow of people through its facilities by sensors installed throughout the terminal complex for both security and advertising. Airports are also pushing notifications while traveling, such as sending the time to leave for the gate (gate changed, reserve 10 more minutes to get to the gate, etc.)
2. Better performance on organic search: Location-based marketing performs better in search engine rankings if your business is listed. Listing properties on web portals such as Google Places, Yelp, and Facebook ensure better locational search rankings for you. Advertisers even have the option to bid money to rank above local search results.
3. Impulse-to-sales conversion: A prospect near your store has more potential to convert into a buyer than a person at a distance. As a marketer, you may want to push an ad to a person who is near your umbrella store on a day when it suddenly begins to rain. Thus, location-based marketing helps shorten the sales cycle from attracting to action.
4. Targeted and affordable: Since it’s very location-specific, it is also targeted. Every business listing makes you more visible. Companies such as Foursquare incentivize users to share their location and explore, for instance.
5. Reward customers: By comparing location-specific ad push vs. actual sales made, repeat customers can also be awarded more often to ensure repeated buying behavior. For instance, inside an airport, movement of your prospects could also help in understanding the buying preferences.
6. Navigation integration: Business listings today are often integrated with maps (driving and directions). It also helps users to identify places of interest while traveling.
Growing concern over privacy
Unwanted messages today are often perceived as spam. Consumers do not prefer sharing their location information and there is a growing concern of spam. However, few publishers and websites today are providing pop-up notifications for asking users their location or to accept cookies. A lot of users are still not comfortable with the idea of being tracked; despite regulations like GDPR being in effect, big advertisers like Google have found creative ways to share such information.
The way forward for location-based services
Consumers and millennials today prefer personalization, but not at the cost of entering their privacy zone. There is a thin layer between sending offers through push advertising using location-based marketing vs. spamming. The first impression of any unsolicited message is spam, so this can only be successful when users are given the decision-making power over what they would prefer to be informed on. This can be done through your ad servers or by using an app, which is probably the safer bet, as users will surely have consent agreement while downloading your application.
Publishers today should also give the users control over opting into a specific type of service or product for which they would prefer receiving updates and offers. Though it has been adapted to a certain extent by a few publishers, there is still a long way to go. This will ensure opt-in choices for information, and users will be happy to share their location with you, thus enabling better business. Once you win a consumer’s trust, the journey only continues further. A win-win situation for both your business and your consumers is the way forward for location-based marketing.
Disclosure: We may receive compensation for links to products on this website.
Neeraj is a Tech Marketer with 9+ years of experience in B2B Sales and Marketing. At StepToInbound, Neeraj writes about Website, Search, Social Media and Marketing Automation practices.