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[YDM Week@nd] Location-Based Marketing

05Feb2016

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daily Pulse
02.05.2016 No. 30
Location-Based Marketing

Trend

Mobile Driven Consumer Behavior

eMarketer predicts that there will be over 2 billion smartphone users worldwide this year. This number accounts for nearly a quarter of the world’s population and over 60% of the number of Internet users which is just under 3.3 billion. U.S. consumers now spend more than half of their online time on mobile devices, meaning they identify, research and communicate with brands on-the-go. The fact that consumers are connected online anywhere they go provides marketers opportunities to utilize location data of their audiences for catering more relevant messages based on where they are.

Insights

Personalized, Real-Time Marketing Based on Location Data

Location data allows marketers to understand a user’s online behavior on the basis of geography, and present messages or offers accordingly. By personalizing marketing messages based on the user’s current location in real time, location-based ads precisely capture the unique opportunity that “mobile” brings about: being able to be connected anywhere, at any time. These contextually relevant ads are effective when trying to boost user engagement.

Facebook's Local Awareness ads allow advertisers to create location-specific ads, and the tech giant has revamped its feature a few months ago, especially for businesses with multiple stores. Advertisers can implement dynamic ad copy that changes based on a store's location. In addition, when users try to access the call-to-action button such as getting direction and phone number, sending message, or receiving more information, they are connected to the store currently closest to them. This way, advertisers can send hyper-local and relevant messages to potential customers who are most likely to visit the store at that moment.

Last year, Snapchat introduced sponsored geofilters, promotional images that users can overlay to their Snapchat videos only when they are in specific locations. Dunkin’ Donuts utilized this feature for their campaign on National Coffee Day (September 29) with geofilter of coffee beans. Users who clicked on the illustration could receive a free cup of coffee by unlocking the image either at or near a Dunkin’ Donuts store to get their coffee. The campaign capitalized on time and location specific moments when consumers discover and engage with brands on mobile devices.

Like the case of Dunkin’ Donuts, providing rewards to targeted audiences in specific locations incentivize customers to take actions. In order to highlight corporate social responsibility and promote responsible safety habits, alcohol brand Campari America worked with mobile rewards platform Kiip in offering consumers credit for Uber-like ridesharing app Lyft during peak drinking hours. When the targeted audiences of ages 21 to 34 used mobile apps affiliated with Kiip (such as Mixologist and onthebar which drinkers would be interested in) in areas with lots of bars and restaurants, they had chances to receive the $5 Lyft credit as a reward for continued engagement. For people who hang out with friends at bars or restaurants until late, finding a ride home is a priority concern, and Campari was able to raise its brand awareness by capturing the mobile moments with relevance to users.

Target marketing based on location data focuses on delivering relevant messages to consumers when they could be in the most responsive state. By letting consumers identify information and/or offers on mobile devices and trigger them to take actions on site, location based marketing seamlessly connect online consumer decisions to offline behaviors.

Challenges

Implementing location data is not without challenges. Accessing user data inevitably poses privacy concerns, and marketers need to be extremely sensitive to whether users want their data to be utilized and to what extent. Data should be utilized in such ways that consumers are receiving contents that really interest and incentivize them. It is essential for marketers to be transparent about the location data that is collected and used.

Another challenge that comes with location based marketing concerns measuring its effectiveness. Whereas advertisers can easily recognize who clicked on their ads and made purchases on desktop computers, is difficult to see whether a mobile ad drove in-store traffic. However, as users spend more time on apps on which location based mobile ads rely on for location data, the ability to measure the correlation between campaigns and the increase in subsequent store visits will be improved.

Editor's Note

Aggregated location data not only reveals the user’s location itself but also allow marketers to recognize user behavior and preferences in retail brands, dining or travel. Mobile user profile developed from these data offer deeper insights into their audiences, enabling contextual marketing practices targeted to meet each user’s offline and online situations. Big data should not simply imply more data, but should be used to identify and understand consumers in meaningful ways.

ydm's View on This Week's Theme by Ryan Kim, Director of Mobile Platform Division, Recobell

With the introduction of iPhone in 2009, smartphones hit the world, making everyone focus on the “mobile first” strategy. Today, we are turning into “mobile only” era with great emphasis on mobility. Location based data provide sources for differentiated marketing strategies never possible before. Users no longer have to move to a specific location to receive services; they can share their location data so that desired services come to them. This kind of on-demand services are rapidly reshaping user experience, and utilizing location based marketing wisely will certainly foster businesses to advance further.

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