Does Location-Based Marketing Really Work?

What is Location-Based Marketing and what is Location-Based Service (LBS)? In few words, I’d say they are the strategies that companies use to incorporate mobile users’ location and promote relevant information to them. Also, why do these terms matter to brands or companies and why should we care? According to Juniper Research, the Mobile Context and Location Services market has reached $12.2bn in 2014. Now, I’m going to give some examples that I found in my daily life, which can reveal more about how these location based ideas are applied in the industries as a growing marketing trends.

1. Requesting the nearest business or service, like restaurant.

LBS_restaurant example

As you can see, while I was sitting at home, typing “Italian food” to search for some Italian restaurant, the searching result of “Olive Garden Italian Restaurant” just showed up on my web page with all information provided. If you are a customer who is hungry and crazy for Italian foods, wouldn’t this restaurant look appealing to you? By simply clicking on the address, you can use Google Maps for direction and then you are off to go! It’s a pity that I eventually choose to eat at home to save some money. lol

2. Proximity-based marketing. Local companies can push sales ads or alerts to individuals who are near the store.

Since I missed the opportunity to capture the example on my phone, I used a similar one to show you the idea. When you are at the immediate area of a local store with your mobile phone and you receive its discount information, that is because the store has LBS to detect your mobile location and then deliver real-time notifications to you. By utilizing LBS, the local store can not only generate sales from the unplanned visitors but also bring higher engagement with the mobile users.

3. Locating people on a map displayed on the mobile phone to intrigue visit potential.

Many apps have the location-based information equipped in them and this feature allows mobile users to locate or find their nearest brick and mortar stores immediately. Take REI’s app as an example, when you tap “Stores” at the bottom menu, the app instantly shows you the nearest REI store and calculate the distance. After choosing the store you want to visit, the app gives you the address and map direction. If I were the consumer who recently intends to buy camping devices, with this app in hand, I may end up visiting the store even if I haven’t thought of buying REI’s products or just want to buy the stuffs online at first.

Another LBS app example is StreetBuff app, which is a new invention that can connect travelers with the locals by deploying mobile users’ location.

StreetBuff means the local people who know their places very well and they can give the most authentic recommendation to the new-comers who just traveled to that area. If you are the visitor, the app can track your current location and show the nearest StreetBuff for you to contact him or her for travel guidance. The best part is that it doesn’t cost you any money for the locals’ recommendation; however, if you have a great time because of the StreetBuffs’ suggestion, you can always tip them afterwards with the app.

4. Social events that posted on the Social Networks via users’ location, such as Facebook, Instagram, Twitter, etc.

LBS_FB example

On Facebook, I edited my current location as New York City when I came here last summer and after that I have seen a lot of social events on my News Feeds. Sometimes, it may become annoying but most of the time I clicked into it just to see what’s the event about since my Facebook information (the subject I might be interested) has been recorded and used by companies who want to target me.

So, does Location-Based Marketing work? Well, it does. As you can see in the following data, 19% purchase was made from Location-Based Advertisement, which is a huge market to tap into. Also, there’s still a silver line for in-store business because not all the consumers buy products online. Their reasons may be the proximity of the store, no shipping time for the products, ability to feel the products, potential to get better pricing, etc. Thus, no need to worry about where are the customers, how to attract people to your place will be the top issue to think about.

google_data

References:

How To Do Location-Based Push Marketing Without Going Too Far – Marketing Land http://marketingland.com/enhancing-brand-engagement-location-based-marketing-90841

The Proximity Tool Is Coming – MobyConnex                    http://www.mobyconnex.com/the-proximity-tool-is-coming/

Advertisements

2 Comments

  1. Wow, it’s really an interesting topic! Nowadays, many users enjoy the benefits and convenience brought by LBS apps. However, some users refuse to “locate” because they are worried that their information being disclosed by those apps. What’s your opinion on the safety issues regarding these LBS apps? In your mind, what can the LBS apps do to attract those poeple who are worried about their safety and personal information? Thank you.

    Like

    Reply

    1. Hi Jacqueline,
      This is really nice of you giving me your opinion. I really appreciate it:) Concerning the question you ask, I have some viewpoints. The safety issues regarding LBS apps will be an ever lasting problem for LBS marketing companies because everyone needs some privacy. However, people are becoming more open to share their information with the world for different kind of reasons and one of them is the incentives from the brand. Therefore, if a company can provide valuable offers to consumers, the chance of acquiring those customers will be very huge, like users can use Google Maps app to search for their destination; Lyft app gives out free rides to attract people to put in their credit card numbers and allow location tracking. Thus, the question for these LBS apps is to find out what can entice consumer to sacrifice their essential privacy?

      Like

      Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s