Brands are doubling down on location-based marketing, with research suggesting that investment is soaring. According to BIA Kelsey, for instance, around $9 billion was spent on location-targeted mobile ads last year, with this investment set to top $15 billion by 2018.
So which brands are spending this money effectively, and what can we learn from their campaigns? Let’s take a look at five successful location-based marketing projects, examine what makes them great, and identify what brands can apply to their own initiatives.
During Black Friday weekend, retail giant Macy’s rolled out a campaign designed to drive more foot traffic to its store. In the run up to the campaign, the retailer fitted its stores around the US with beacons, so that shoppers with the Macy’s app who walked into its shops during the Black Friday weekend would receive a beacon-triggered push notification to play mobile scratch-card games in a bid to win prizes and discounts.
One of the key areas Macy’s focused on was Herald Square in Manhattan, where around three million people gathered for the Macy’s Thanksgiving Day Parade. Placing a geofence along the parade route and around its store, this offered an enormous and ideal audience to target to come in store and play, with everyone already in the party spirit.
“Large amounts of business has already shifted online, a phase that’s set to continue, but retailers still have physical stores,” says Mark Thomson, retail industry director EMEA, at Zebra Technologies. “So, rather than let these stores waste away as we’ve seen with a number of retailers in recent months, Macy’s saw it differently. The philosophy was not to close stores, instead the focus was on attracting people to a physical store.
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“Macy’s set up a mobile app and offered cash prizes to users who downloaded the app and entered any of its stores in the run up to Black Friday. Using Wi-Fi to send notifications when the customer entered the store, the retailer was able to track its customers’ location and could reward them just for walking into the store.”
Thomson believes that this shift away from impersonal letters through the front door, to one-to-one personalised marketing in-store is changing the whole nature of a loyalty programme.
He continues: “Instead of rewarding a transaction, Macy’s chose to reward people based on behaviour – going to the store. This is a growing trend. Waitrose, which still offers customers a free cup of coffee when they enter the store, became Britain’s second largest provider of coffee all off the back of location-based marketing. It’s about integrating the physical store with digital solutions, like phones, to create a better customer experience.”
So what can marketers learn from Macy’s programme?
“Marketers need to understand that the move to online is not the be all and end all,” says Thomson. “It’s about targeting your whole customer base with the right content, in the right manner. Gone are the days when marketers could list every characteristic of their ‘average’ customer by rote. Personalised marketing in the moment of truth (at point of sale or when a customer enters a store) is where marketers can be truly effective.”
Last year, Coca-Cola made headlines when it conducted a beacon trial in cinemas in Norway, designed to discover the best methods for using the technology. The innovative thing about its trial, however, was how it delivered the promotion through a popular, third-party app as opposed to trying to convince users to download their own app in order to be rewarded.
As a result, it found that this method of delivering the campaign, when “not used in isolation”, was much more favourable than trying to engage customers through their own app.
The pilot scheme, conducted throughout May and June, saw free Coke offered to cinema-goers if they had publisher VG’s already-popular app on their phone as they walked through CAPA foyers.
24% of the people that had the app on their phone clicked on the offer, while 50% collected their free Coke at the cinema and 60% of those went on to click on retargeting ads served up some time later and offered a free cinema ticket courtesy of the soft drinks giant.
The lesson from this: The positive results suggest that location-based marketing, (and the associated proximity/ beacon technology) does not necessarily have to be used by brands through their own mobile application, and can, in some cases, be more effective served via third-party sources.
Montana Bureau of Tourism
Hitting a consumer with an ad based on their location at a particular moment is a powerful marketing device. However, it makes sense that delivering an ad that is tailored around the last 10 places that the consumer has visited, or the last 10 pieces of content they have consumed, could be even more effective.
It was this thinking that informed a campaign by the Montana Bureau of Tourism two years ago. The bureau worked with mobile ad network PlaceIQ to wrap ski resorts with technology connected to a tile platform.
The bureau’s mobile ads then connected to the tile platform to identify consumers who had previously visited ski areas and shops and therefore may be interested in visiting the ski resort in Montana. Ads depicting breathtaking photos of winter in Montana were targeted to these winter recreationists so that, for instance, a skier in Wisconsin would see the ads inviting them to Montana’s superior ski conditions.
“This campaign was unique because it did not rely solely on geo-fencing but took into account location histories of each user to build dimension into user profiles,” notes Christophe Collet, founder & CEO of mobile adtech firm S4M. “Because of this, the campaign was able to identify more accurately which users were the right audience for targeting. It proved successful - the campaign's measured return was USD $6.9 Million on an investment of $25,000.”
The campaign also picked up numerous awards, including a Creative Media Award for the Mobile Media category, a Silver Magellan Award from Travel Weekly, and an Internationalist Award and recognition at the Cristal Festival.
The main thing that marketers can take away from this campaign, says Collet, is that the combination of location data and historical data can be powerful. He says: “Mobile data from users' smartphones provides histories that marketers can use to build dimension to user profiles to better understand the needs and future intentions of their intended customers.”
And one that shall remain nameless…..
Location-based marketing requires there to be a value exchange - brands need to provide the engagement in order to benefit from it. And with phones being such personal devices, it is particularly important that brands are sensitive to their use as a marketing vehicle.
“‘Broadcasting’ to such intimate devices, our personal smartphones, needs to be handled carefully,” says Ian Malone, CEO and founder at Airspace. “There is an element of intrusion and that will only be tolerated if the customer feels it was worth it.
"The brand will remain nameless, but I was recently targeted by Regent Street’s proximity app, only to be told that the alert was simply telling me to the fact that I was passing Brand X’s shop. That’s supposed to be the reward for taking my phone out of my pocket and taking the time to read the alert? I think not.”
“So brands need to be aware that they have a very powerful tool at their disposal, but if the opportunity is abused or underwhelming, the impact on the brand could be detrimental.”
About Neil Davey
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 15 years, including Internet Works, CXO magazine and Business Management. He joined Sift Media in 2007.