What Is Location-Based Marketing?
Location-based marketing is a mobile marketing strategy that enables the personalization of content based on the individual user’s context and geographic location. Using technologies such as GPS, Wi-Fi and Bluetooth, it bridges physical and digital worlds to provide actionable content at the moment it is most useful.
Done successfully, location-based targeting improves response rates by up to 5x. According to data published in the Good Push Index report, influenced opens are 293% higher in highly targeted location-aware campaigns vs. broadcast messages. With an average 62% location opt-in rate and an average 51% of users opting in to receive push notifications, most apps can reach more than half of their users with location-based and proximity-triggered push messages.
Types of Location-Based Marketing
Location-based marketing leverages several forms of technology to gather real-time user data. Here are some of the most common types of location marketing:
- Geofencing: Send messages to users when they enter or exit a defined virtual boundary, such as a store or event location.
- Geotargeting: Deliver content based on a user’s zip code or region.
- Beaconing: Bluetooth beacons send messages to nearby phones when users are near each other.
- Mobile Targeting: Use real-time data, including GPS, Wi-FI signals or IP addresses, to deliver targeted messages to users’ phones.
How Location-Based Mobile Marketing Works
Location-based mobile marketing relies on real-time user data and precise targeting technologies to deliver relevant messages at the right times. Location-based mobile marketing requires the right data collection and technology, strategic implementation and measurable campaign execution.
Data Collection & Technology
Unlike asking customers directly for insights, location-based marketing collects data through IP addresses, GPS and Wi-Fi to understand user behavior, preferences and context to create personalized, relevant mobile experiences.
For example, if you own a retail business and your app detects a customer is close to a nearby location, you can send them a push notification with a personalized offer they can redeem in-store.
Implementation Process
After collecting location data, marketers define geofences, proximity zones or regional audience segments for targeting. Once defined, map out the customer journey and decide on message triggers to integrate with campaigns using in-app, SMS or push notifications.
Campaign Execution
Once set up, launch location-based marketing campaigns to deliver timely notifications to users’ devices based on their locations. Monitor and track engagement, clicks and conversions to enable marketers to optimize messaging and measure performance.
Location-Based Marketing vs. Proximity Marketing
When it comes to mobile marketing, location-based marketing is the key to bridging the physical world with the digital world, providing contextually relevant content based on a user’s geolocation. Proximity Marketing is used to describe a more granular approach to location-based marketing, often using beacon technology to provide a more precise location of the user. Although both terms can be used interchangeably, a key difference is in the way location is determined.
Generally, in location-aware mobile apps, we define location-based marketing as the process of triggering a notification or action when a user enters or exits a predefined geolocation or geo-fenced location. If location is determined through the GPS coordinates of the mobile device, it can be defined as location-based marketing. Often, however, it is necessary to define locations within a building, where a GPS signal cannot reach a mobile device to determine a user’s location. In these cases, it is necessary to deploy beacon technology to determine the location of a mobile device. Proximity marketing refers to the process of sending highly relevant and timely content triggered by mobile devices within a predefined distance — a ‘proximity’ — to a location-based device such as a Bluetooth Low Energy beacon.
Industries Using Location-Based Marketing
Whether determined through GPS or through proximity to a beacon, location is a key component of mobile context. More and more mobile marketers are using location to engage with users who have visited or are currently visiting a specific location. This becomes interesting specifically for organizations that have a brick-and-mortar location that defines some portion of the value to an audience.
Location-based marketing isn’t limited to retail. Non-retail applications can use location-based mobile behavior. To fully understand how to implement location-based marketing into a global marketing strategy, it’s helpful to identify mobile moments that are strengthened when the user is in a specific location. Below are some location-based marketing examples to optimize a mobile engagement strategy.
Retail
Shopping malls and retail centers can use location-based marketing to send relevant offers or loyalty rewards when customers are close by. Alerting customers when they’re near encourages more in-store visits and bridges the gap between mobile and physical experiences.
Restaurants
Restaurants can utilize location-based marketing to attract nearby diners with targeted promotions about daily specials or encourage repeat business. For example, a coffee shop may send out a push notification to users within walking distance during morning hours or highlight menu items to drive business.
Events
Sports venues, concerts and festivals can improve the visitor experience through real-time messaging. In-seat concession offers, wayfinding alerts, instant replays or reminders about nearby amenities can help visitors engage with the event and make the experience more enjoyable.
Industry Use Cases
| Navigation or Check-in | Traffic Flow Monitoring | Proximity Payments | Asset Tracking, Merchandising | |
|---|---|---|---|---|
| Retail | ✓ | ✓ | ✓ | ✓ |
| Hospitality | ✓ | ✓ | ✓ | ✓ |
| Stadiums | ✓ | ✓ | ✓ | |
| Events | ✓ | ✓ | ✓ | |
| Travel | ✓ | ✓ | ||
| Transportation | ✓ | ✓ | ✓ | ✓ |
| Hospitals/Healthcare | ✓ | ✓ | ||
| Industrial | ✓ | ✓ | ✓ | |
| Restaurants | ✓ | ✓ |
Why Location-Based Marketing Matters
Without location-based marketing, brands miss out on critical opportunities to engage customers in real time. By leveraging location data, marketers can deliver messages at the moment users are most likely to act. The importance of location-based marketing comes down to:
- Competitive advantage: Reach customers before competitors by sending timely, location-relevant offers and updates that drive traffic.
- Customer engagement: Deliver personalized, contextually relevant messages based on customer preferences and behaviors.
- Higher ROI: Run targeted, real-time campaigns based on location for higher engagement rates.
How to Use Location-Based Marketing With Airship
With Airship’s customer experience platform, you can leverage location data to orchestrate seamless customer journeys across SMS, push, in-app messaging and email. By using geofencing, beaconing and real-time insights, you can deliver personalized moments to your customers no matter your industry.
Glossary of Terms
Location-based marketing is a direct marketing strategy that uses a mobile device’s location to distribute content or services (such as push notifications) associated with a particular place.
A location–based service (LBS) is a software application that uses location data from an IP-capable mobile device to target specific users based on location or location history.
Location-based technology refers to the technology that makes it possible to locate a device within a specific geographic location. The most common technologies deployed in location-based marketing applications include geofencing with GPS positioning and Bluetooth beacon technology for indoor positioning. Other technologies used in location-based apps include Radio Frequency Identification (RFID), Near Field Communication (NFC), and QR Codes.
Geolocation is the wireless detection of the physical location of a remote device. As a noun, geolocation refers to the physical location itself; as a verb, the term refers to the process of detecting that location.
Proximity marketing is used to describe marketing or ad campaigns that are triggered by the proximity of a user to a specific geographical location. Proximity marketing campaigns typically rely on bluetooth low energy beacons or geofences to trigger a specific course of action.
A geo-fence is a virtual perimeter for a real-world geographic area. A geo-fence could be dynamically generated—as in a radius around a store or point location, or a geo-fence can be a predefined set of boundaries, like school attendance zones or neighborhood boundaries.
Geo-fencing involves a location-aware device of a location-based service (LBS) user entering or exiting a geo-fence. This activity could trigger an alert to the device’s user as well as messaging to the geo-fence operator. This info, which could contain the location of the device, could be sent to a mobile telephone or an email account.
Want to learn more about how Location-Based Marketing can help you connect with customers at each stage of the customer lifecycle? Contact us today and let’s talk!
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Want to learn more about how location-based marketing can help you connect with customers at each stage of the customer lifecycle? Contact us today and let’s talk!