Location-Based Marketing Will Rely on Mobile in 2017

May 2, 2017

More than 74 percent of adults own a smartphone. What's more, most of these adults won't leave the house without their phones. This obsession allows organizations to collect endless amounts of data. Phones with GPS beacons and apps make it easy for stores to gather data and develop insights regarding the typical actions of consumers. It's not surprising that location-based marketing (LBM) has centered on mobile.

Study Shows Mobile Location-Based Marketing Creates Deeper Relationships with Customers

Recently, the Location Based Marketing Association (LBMA) released a semi-annual Global Location Trends Report, revealing huge trends in usage and investments regarding location-based marketing and projections for implementing relevant technology in 2017.

"This report proves that location data is of huge value to the world's biggest advertisers," reported Thomas Walle, CEO and co-founder of Unacast. "We are seeing a major increase in our deterministic proximity data being used for enhanced attribution and targeting."

LBMA looked at more than 500 business leaders and marketing executives who currently use location-based marketing. Here were some of their key findings:

Countries are spending more of their marketing budgets on LBM.
About 25 percent of major corporations' marketing budgets are allocated to location-based marketing.
More than 50 percent of companies say they use LBM to target customers, and that number is predicted to increase significantly in 2017.
Wi-Fi/GPS on smartphones are the most commonly used LBM technology because it's the easiest way to gather accurate data.

According to Walle, the use of mobile for gathering information on customers is the secret to accurately gathering and using proximity data. "Deterministic proximity data provides not only a pervasive connection with the consumer, but also the conditions for a much deeper and more personal relationship with them."

Those who have not yet used LBM are strongly encouraged to add it to their current marketing practices. The potential for improved customer relations and further reach cannot be ignored.

Gain a Competitive Edge with Early Adoption

This research confirms a trend that has been steadily growing.

"Our report validates the importance and increased adoption of LBM," says Asif Khan, founder and president of LBMA. "The future is bright as we see an overall increase in LBM usage globally. We are so glad to share such valuable insights into the industry with our members…and beyond."

Adoption of LBM will give your company actionable insights now, as well as prepare you for future growth.

Marketers who currently optimize this trend will be at the forefront of this competitive landscape. When you tap into the mobile market, you'll have accurate, location-based data in real time.

The usefulness of location data is something companies can't afford to ignore. The data collected will refine campaigns, make strategies more measurable, and better define your target market.

Increase Transparency

The conversation in great customer service currently revolves around transparency in operations, but companies often overlook its power. LBMA research predicts that clients will demand certain transparency in data, which can put companies who are unwilling to act in a compromising position.

The media has made it clear that data collection is occurring and customers want to know how it happens. They may feel that their privacy is being violated; transparency in this process can reduce that concern and clarify expectations. Always explain the customer's role in your data collection and allow them to choose whether or not your app will use their location, even when it's in the background.

Oftentimes, consumers are willing to participate if you explain your reasoning, which provides you with better data.

Use Push Alerts for Conversions

According to research from MDG Advertising, nearly three quarters (72 percent) of consumers say they follow through with a call to action if they receive it while near the physical location of the retailer. However, the same research shows that only 23 percent of retail marketers use such geo-targeted strategies.

Stores can use push alerts when a consumer nears or enters their location for things like coupons and new arrivals. When customers receive a push coupon while walking past a store in a shopping center, they're more likely to step inside and make a purchase. The use of push alerts in a company app provides an excellent opportunity for retailers to connect customers with what they want.

Target famously used location-based push notifications through their app back in 2012, and they saw a significant rise in sales. When customers neared a Target anywhere in the United States, their mobile app would automatically alert consumers with coupons and new arrivals to drive more in-store purchases. The big box department store was one of the first to use LBM, and based on their success, others followed suit.

Geo-Target with Reminders

Alerting customers of a special offer, event, or promotion one time may not be enough for wishy-washy decision makers. Reminder alerts can help drive customer loyalty.

As an example of this, Taco Bell used push advertising to promote their "happy hour" promotion. Not only did they send a push alert on the day of the event, but it also had a "remind me" feature for the start time – in this case, 2 p.m. This useful feature helped drive the decision to stop by for those who weren't sure.

Consider Geo-Conquesting

Marketers already using LMB services can get ahead of the curve with a more aggressive style of push alerts known as geo-conquesting. It's a form of geo-fencing in which an app is programmed to send alerts when a consumer is near a competitor's store. When employing this strategy, you'll send an offer that entices customers to visit your store instead of the competitor's.

Outback Steakhouse's use of geo-conquesting increased their click-through ad engagement by 78 percent and lifted conversions by 11 percent. Anytime a consumer with the Outback Steakhouse mobile app downloaded on their phone came within five miles of a major competitor like Texas Roadhouse, Long Horn Steakhouse, Bullshead Restaurant, or other major steakhouses in the area, it would send a push notification that enticed consumers to visit Outback instead.

Some marketers might feel a little uncomfortable with this more aggressive style of marketing, but in a highly saturated market, it may be the only way to get ahead. You can bet your biggest competitors will do it, so you might as well get a head start or risk losing to the competition.

Conclusion: Adopt Location-Based Marketing Now

In the future, everyone will make the shift to mobile with location-based marketing. The curve is already developing, but there's still time for you to jump ahead of the competition by adopting this practice.

Your reward will be more accurate data and a better experience for your customers.

References & Further reading