Although we still continue to make the mistake of thinking of digital and traditional or offline marketing as if they were separate worlds, the truth is that the barriers between the two are becoming more and more diluted, especially due to mobile phones.
Location-based marketing, along with augmented reality, is one of those technologies that bring the physical world closer to the digital one. In this case, we are communicating with the consumer through digital means, but the messages we send are related to their location in the “real world”.
What is location-based marketing?
Location-based marketing or location-based marketing is a direct marketing strategy that uses the location of a mobile device to notify its owner of the offers available in businesses that are near him.
Typically, location-based alerts are sent to a mobile or wearable device via pop-up notification or SMS. Alerts can include information about current offers (for example, the menu of the day in a restaurant) or include an incentive to buy, such as a coupon with a discount code.
Although brands have been doing location-based marketing for years, it is still trending and developing. You can take a look at some data here: https://www.factual.com/report/
To apply it successfully in your company, keep these three keys in mind:
- Traffic flows. To have a location-based marketing campaign that generates a sufficient volume of interactions, there needs to be a critical mass of traffic at the specified location. One of the challenges that marketers are facing today, is taking advantage of geotargeting when there are restrictions on mobility and therefore fewer people can see the notifications.
- The exclusivity of the products and services. Location-based marketing works well for limited products and services, which cannot be found everywhere. Therefore, before launching this type of campaign, we must think about how we are going to generate that exclusivity.
- Privacy. Location-based notifications may be perceived by users as invasive, so the issue of consent is key. You also have to be very careful with locations related to sensitive data.
Types of location-based marketing and their benefits:
Geotargeting is a technology used to determine the location of a user and send personalized messages based on it. If the user has authorized an app to access its location, they may receive in-app messages or pop-up notifications depending on their area or proximity to a store.
Geotargeting is based on the IP addresses of the users. All devices connected to the internet have a unique IP address that makes them identifiable. The IP address can be used to determine the country, region, or even zip code of a user.
The main benefit of geotargeting is that it improves the customer experience through personalization. For example, marketers can segment users based on location-related needs, such as the weather or local news.
A good example of geotargeting is Google search results. If you search for, for example, “Japanese restaurant”, Google will use the IP of your device to show you restaurants near you.
Geofencing consists of creating a virtual “border” around a certain area. When target audience users cross this border, they receive content, offers, or other messages from the brand. For example, we can put a border around a shopping center in which our brand has a store.
Geofencing uses GPS technology to create these virtual boundaries. Its main benefits for marketers is that it allows us to segment large areas and that it is based on real-time location data, which helps to achieve immediate conversions.
A typical example of geofencing is alerting about stores near you whose products you might be interested in.
Mobile targeting consists of targeting consumers through ads on their mobile devices. Because users typically want to avoid advertising, marketers try to make their ads relevant to the context, taking into account time, device and location.
To configure a mobile targeting campaign, you have to define an audience to target and an event that triggers the messages, for example, if the user passes through a specific area or enters one of your stores.
Mobile targeting allows marketers to directly target users on their mobile devices to create a more personalized connection. As a result, the return on advertising investment is usually higher.
For example, we may use mobile targeting to serve ads on social media that are relevant to where the user is.
Geo-conquesting uses location data to prevent users from visiting competing stores. For example, car dealerships can create a border around the establishment of a competitor to send offers from their own brand.
Geo-conquesting uses GPS technology to segment users who are close to the competition. For brands, it offers an opportunity to gain market share and new customers, targeting users who are willing to buy products similar to yours.
A well-known example is Burger King, which used location-based marketing to attract McDonald’s customers. First, users had to download the Burger King app. When they passed within 200 meters of a McDonald’s, the app sent them the promotion of hamburgers for one penny and told them how to get to the nearest restaurant.
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