Look to the Future of Location-based Marketing - dummies

Look to the Future of Location-based Marketing

By Aaron Strout, Mike Schneider, B. J. Emerson

The rate of change in location-based marketing presents both opportunities and challenges. Knowing the trends in location-based marketing is critical to ensuring that today’s decisions translate into tomorrow’s successes.

Opportunites to target market at decision point

  • Geo-targeting: One of the things that will only become more prevalent over the next couple of years is geotargeted (messages and offers based on location) advertising. For example, adding location to services such as DART for Publishers (an online ad-serving system now owned by Google).

    One thing that you can start thinking about as you test location-based services (LBS) is how you could use your LBS or recommendation engines like WHERE (or even Twitter) to start to serve more geographically relevant ads to your customers.

  • Day-parting: What’s really exciting about the promise of geotargeted advertising is that it comes with the advantage of day-parting (serving up time-sensitive ads, such as lunch ads around noon) and demographic targeting. Most important is that prospective customers will actually have a way to act on these targeted ads via an LBS.

Challenges of a changing technology landscape

  • Hardware in the location to support passive check-in: As location-based marketers try to make checking in easier on their customers, more LBS providers will move to on-premise hardware.

    Right now, a majority of LBS providers rely on GPS to allow customers to check in to a venue.Only shopkick — a company that powers LBS programs for the likes of Simon Malls, Sports Authority, Target, and Best Buy, among many others — requires retail stores to install physical hardware in their store that will passively check in customers if they have the shopkick application open on their smartphone.

  • Geofencing: You will also start to see more LBS and businesses using geofencing, which is isolating a particular location for privacy reasons. But as more companies adopt LBS and offer richer incentives to customers to check in, concerns around “gaming the system” will grow. To combat this problem, geofencing allows tighter controls over ensuring that a customer is physically in your venue (or at least within a 20-yard perimeter).

  • Wireless network technologies: Wi-Fi, 3G and 4G, LTE, WiMax microwaves are able to connect mobile devices over longer distances and are becoming more pervasive.

    This trend is creating a need for LBS to create enough elasticity around its check-in rules. For example, someone can go from a Wi-Fi network (which can sometimes interfere with GPS) to a 3G or 4G network, and then pick up public Wi-Fi networks.

    Location-based providers have to understand these patterns and not penalize customers if a local coffee shop’s Wi-Fi connects to a router five miles away and thus makes it appear that the customer is not actually in the store but rather next to the building housing the router.