Location-based advertising: the new kid on the shopper marketing block

20 Jul Location-based advertising: the new kid on the shopper marketing block

Location-based advertising: the new kid on the shopper marketing block

Digital marketing is an undeniably powerful tool, but it has – until recently – been distanced from the in-store sales environment. With advances in mobile technology, this distance is finally being bridged, bringing with it a powerful new tool for shopper marketing: location-based advertising.

Already making waves in international spheres, location-based advertising takes the power of digital marketing and combines it with the “right time, right place” elements of more traditional media. How does it do this? By using the location-tracking abilities of modern smartphones, as well as technologies like Bluetooth, to learn exactly where your shopper is, and send them customised advertising targeted to their location.

There are currently two main types of location-based advertising being used internationally.

1.       Facebook’s Local Awareness Ads

Notorious for knowing everything there is to know about their users, Facebook’s addition of location-awareness to their advertising offering gives businesses the ability to target shoppers with unparalleled precision.

How does it work?

Facebook’s audience selection tools for advertisers are already comprehensive, allowing you to choose who sees your advert based on a range of user demographics, interests, activities and traits. For example, using basic Facebook filters, you can ensure your advert reaches a target market between the ages of 18 and 35 who live in Cape Town CBD and are interested in mountain biking.

Using the new Local Awareness Ad functionality, you can narrow that target even more, concentrating on shoppers who not only meet the aforementioned criteria, but who also happen to be having coffee in a shopping mall where one of your biggest mountain bike retailers are.

In this day and age, the chances of that shopper checking Facebook while they enjoy a coffee in a shopping mall are incredibly high. What better time to tell them, in their newsfeed, about the benefits of using your particular brand of mountain bike and the fact that it is currently on promotion? The combination of location, timing, and a compelling offer targeted to your shopper’s particular interests increases your chance of conversion exponentially.

The pros

  • Facebook is pervasive, giving you instant access to a huge number of potential shoppers.
  • All that is required from users is to have location services enabled on their mobile phone.
  • Ads can link to other media like websites and videos, allowing you to inform and entice shoppers far more effectively than traditional alternatives like print media.
  • Facebook offers great measurability, tracking user engagement which can be correlated with sales figures to calculate the success of a campaign.

The cons

  • Local Awareness Ads have not yet been made available in South Africa. They should be coming soon, though, so get ready to see a lot more location-based ads on your news feed.
  • Location targeting is not 100% precise. Cellphone GPS provides accuracy within 10m, WiFi within 30m and GSM within 100m – 300m.

2.       Apple’s iBeacon

The iBeacon location-based advertising system is a little more complex than Facebook’s location services, and requires more setup by both the retailer and shopper, but it pinpoints a far more precise location which opens up a range of exciting in- and out-of-store options.

How does it work?

Introduced in iOS 7, iBeacon functionality relies on two elements, the first of which is an app on the shopper’s iPhone. Typically, this app has standalone functionality to encourage users to download it. It could be anything from a recipe app to a news app to a game – anything that appeals to a retailer’s target customer.

The second element is a series of – you guessed it – beacons. These discreet, low-powered devices are installed at strategic points throughout a store, and communicate with the shopper’s mobile phone over Bluetooth. The devices triangulate the shopper’s location with extreme precision, and send targeted messages tailored to the products the shopper is seeing.

Take, for example, a shopper in a liquor store. Having downloaded a cocktail recipe app, the shopper has gone to stock up. Walking down the vodka aisle, her phone vibrates in her pocket, and she sees a message letting her know that a particular brand of vodka is on special. She then walks past the beer fridge, where her phone buzzes again – this time letting her know that a new brand of craft beer she might like has just hit the shelves.

Being able to engage with your shopper about products in his or her immediate vicinity offers a unique opportunity to drive brand-awareness and encourage conversion. The iBeacon’s ability to record that engagement also opens up great possibilities for ongoing marketing outside the retail space.

(Read about Unilever’s ground-breaking iBeacon campaign for Knorr soup in Stockholm, here.)

The pros

  • The iBeacon system records engagement, so you know which shoppers have interacted with which products. This allows for targeted advertising on an ongoing basis, outside of the retail environment.
  • Single beacon systems are also available, and more affordable to roll-out than multi-beacon systems. While a single beacon can only detect proximity, this can be used very effectively to drive foot traffic into a store.

The cons

  • iBeacon requires both hardware and software, and professional setup.
  • Shoppers need to have an iPhone with an iBeacon-capable app installed, and Bluetooth and location tracking enabled in order to receive notifications.
  • There are currently no iBeacon installations in South Africa, but Angle Orange is looking forward to assisting clients who are interested in exploring the technology in our country.

Conclusion

Location-based advertising is a powerful tool that can be used to focus marketing more effectively than ever before. Its ability to combine a rich and personalised digital experience with the immediacy of traditional in-store shopper marketing tools creates unprecedented opportunities for dynamic engagement to enhance the shopper experience and ultimately drive sales.

 

Interesting Reads:

The Next Wave in Shopper Marketing: Micro-Location in the Retail Space

Geo-Location, Geo-Fencing & Creep Factor: The Future of Location Data and Mobile Advertising

What Shopper Marketers Need to Know about Location Based Marketing

Facebook: Helping Local Businesses Reach More Customers

iBeacon briefing: What is it, and what can we expect from it?

Drive Foot Traffic with Facebook Local Awareness Ads

1Comment
  • Susan
    Posted at 12:36h, 06 February Reply

    This was interesting. Foursquare, Groupon, Yelp and Google Offers are few other location based applications that have been widely adopted by users world over.

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