As previously announced, the panel I moderated at Webcom featured Location-based marketing (LBM) evangelist, Aaron Strout (@aaronstrout) and four of our Canadian thought-leaders on the subject – Sebastien Provencher, Laurent Maisonnave, Mohamed Kahlain. We discussed the future of LBM and how/if Canadian businesses should invest more of their ad dollars.
Here are some key take-aways :
In retail, a distinction should be made between location-based and geo-fencing: one is active, the other passive. One requires the user to engage with the business by checking-in with its mobile device (see my post on the leading check-in application Foursquare), the other requires that the business triggers a text message to a customer entering not a specific location, but a defined geographical area, assuming that the customer has opted-in this feature. This is an important touch point for ALL businesses. Let’s say you’re entering a pharmacy in downtown Montreal located near one of your favorite retail outlets. If you have activated ge-fencing on your mobile phone, that retail outlet may inform you, as you’re entering the pharmacy, of a special event happening at that moment. This is a great opportunity for businesses to tap into : spontaneous buying, thanks to proximity marketing.
As Sebastien pointed out, local marketing has been around for a long time. For years, storefront advertising and community events and forums helped advertisers spread their messages across neighbours’ fences and into consumers’ homes. What’s different today is mobility. Smart phones have allowed for speedier exploration and buying decisions. Mohamed talks of the new revolution when referring to the 4th P – the Place – (for more info: Mediative’s White Paper). Not surprisingly. A look at these statistics and one can understand why mobile marketing is the primary focus of businesses:
> 80%+ of online consumers use their web-enabled devices to research where to make offline purchases
> 41% of offline retail sales in 2011 (estimated) were web-influenced
> 55% of smartphone owners use their devices frequently while shopping in stores
What about LBM? The market is ripe for LBM also, as the number of mobile users, social network and LB power-users are on the rise.
New study conducted by the Pew Internet & American Life Project found that about 74% of smartphone users use location-based services to find out information about what’s around them. In addition, one in five (18%) are checking in to local businesses with geo-social services.
LBM for non-location businesses?
A third point that stood out and that may dissipate the belief that LBM is only for retailers or storefronts: non location businesses, such as TV stations or consulting firms, are also leveraging the potential of Location-based marketing, in a non-selling way. Aaron mentions how USA Today is using a Foursquare branded page to leave tips at locations across the US which highlight “hidden treasures”. When a person checks into a location, they get a tip that then drives people to the USA Today website to learn more, positioning USA Today as a helpful expert. See the excellent post from @arnoldmcp on Location as being more than check-ins. Location marketing here revolves around gamification or rewards as Getglue demonstrates, where users can “check-in” to a show. There is no selling involved, just hints and tips, yet businesses are using this as a way to get to know their customers better.
Key benefit or why should part of marketing dollars be invested in Location
Data, data, data. This is our last but not least nugget that should create excitement in the advertising community : location data is a real-time, day-to-day, minute-to-minute scoop into customers’ buying habits. When a consumer checks in, we get data, when a consumer leaves a tip, we get data, when a consumer becomes the mayor, we get data. If you claim a business, you get access to a statistics page that show how influential the customers are. Foursquare then suggests to potential customers to reach them via twitter, and based on check-ins data, these are your best customers. Never done before! So it’s not just data but actionable data for advertisers. This spells out l-o-y-a-l-t-y.
This is not to say that TV ads are over. Far from it. Actually, geo data is being used by agencies in their TV programming. Laurent has developed an application for its customers that monitors and analyzes the tweets that are being shared on The Survivor show for instance. These tweets are geo-tagged with the city or the district and this is where it gets interesting : combining traditional media with local data to better cater to geo-sensitive customers. Laurent believes that TV commercials quickly customized to local audiences will be the upcoming trend. See his excellent post on social TV and LB advertising.
All this said, there is perhaps one key factor that may be slowing down the adoption process is fulfillment. Providing local payment features with smart phones is what’s missing from the equation. Geo-couponing apps and virtual stores (see how Well.ca is disrupting retail) are beginning in Canada, where customers scan the item they want and check out on their phone.
Main challenges ahead
- for geo-fencing: getting users to turn on their mobile devices while still respecting their privacy
- specifically for non-location businesses, figuring out where customers are going to be
- at the end of the day: making location a end-to-end pleasant experience
I’ll end this post with one of Aaron’s many quotes that stay with me, taken from our first interview : “If I’m going to take the time to check-in and cross-post on Twitter or Facebook, you should give me something in exchange.” Checking-in to a location, like any other consumer-driven action, must be of high enough value to users.