Geolocation marketing success shrouded in mystery

Human beings are rediscovering what it’s like to be truly mobile again. For millions of years our species was highly mobile. Being chained to a desk with our eyes glued to a screen is arguably a new phenomenon.

Mobile communications and computing isn’t a passing fad. The pace of technological change is breathtaking; consider the average smart phone has more computing power than Apollo 11; wireless network speeds and capacities continue get faster and deliver more data; most urban populations have access to huge swathes of free high speed Wi-Fi; and literally every single mobile device has location technology baked right in. While a number of trends validate that geo-location advertising and marketing is a significant potential opportunity, the current reality suggests there’s still a big learning curve and further adoption hill to climb.

Consider these numbers and trending indicators offered up from mobile advertising firm Adfonic:

  • 94% of purchases are still made at physical locations. That means geo-location will be considerably more appealing to retailers than developing a transaction-enabled mobile site or app.
  • 50% of all iPhone iOS and Android data traffic is available to mobile ad networks for geo-location targeting purposes.
  • More than 50% of smartphone users have performed “shopping activities” (e.g., price comparisons) and 38% have actually made a purchase using their smartphone.

From Mary Meeker’s latest Internet trend report she suggests the opportunity for mobile advertising in the U.S. is huge at $20 billion. In relative terms total Internet advertising amounts to $30 billion and mobile advertising is currently only $1.6 billion (slide 17). This really illustrates how difficult mobile advertising is in many regards – if it were working properly, the delta between internet and mobile advertising spend would be closer.

we know where you are!There’s no question that mobile advertising and marketing opportunities are close at hand, as Mary Meeker boldly forecasts. The challenge is one of transcending theories into realities, and how to effectively align smart business decisions with smart phones is definitely still shrouded in mystery. Theories abound, yet successful case studies do not. Understanding how to create a personalized digital experience based on a person’s physical location is the crux of the issue.

Here are examples of location based marketing initiatives from two diametrically opposed brands. McDonalds built a successful campaign using Facebook Places in conjunction with a micro-site in which a weeklong campaign generated 120,000 visits to the site and more than 1,000 tweets an hour after launch. While it was suggested sales results were highly successful, they declined to disclose specific figures.

Luxury jeweller Tiffany & Co.  is deploying a very different strategy.  Using geo-targeted banner ads on the Weather Channel mobile application they are targeting affluent New Yorkers to its new SoHo property. When using the map section on the app users can see the banner ad on the top of the page. The app allows consumers to call the store and gives directions to the property. At this point there are no metrics to determine how Tiffany & co. is measuring the success of this campaign.

It’s imperative to consider the relevance and importance of messaging context; the where, when and how engagement takes place; the value delivered; and most importantly user permission, and privacy. Deliver the right kind of offer, to the right person, at the right time. Will someone consider hitting the brakes to save $100.00 on a $10,000 string of pearls or will they run into your store to save a dollar on a box of chocolates? It’s vital to differentiate between impulse and research driven purchasing habits.

Marketers can use location to infer a lot about what people are doing. At the ballpark, the theatre or the amusement park they’re enjoying leisure time and all that goes with it. At the mall means likely shopping and at an airport suggests they’re probably travelers.  Marketers can also now correlate and integrate new data points such as the weather, traffic, and other events that are proximate to that location. Creating specific and tailored messages will potentially deliver powerful, meaningful, and valuable mobile ads in the very near future.

The mysteries of geo-targeted advertising, and geolocation marketing in general, will keep unfolding in terms of creating positive engagement, measuring campaign effectiveness, and  enhancing top-line results; is it any different than Madison Ave. figuring out how to use television effectively? However, it’s critical to remember that just because companies may know where people are and potentially what they are doing, brands shouldn’t use this information as licence to interrupt and disrupt the rhythm of daily life. Avoiding a  jarring and invasive experience while engaging customers in a geo-centric way, ay there’s the rub.

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