Here’s why location data is so valuable for marketers.

You may have noticed that most applications on your phone ask to know your current location.  Despite some pull-back from consumers about their location information being shared, many people are still choosing to leave their mobile GPS on and make their mobile location known.  According to Pew Research Center in 2013:

The majority of smartphone owners say they are making use of their phones’ location-based services, and the share of all adults who do this continues to grow along with increasing smartphone adoption.

74% of adult smartphone owners ages 18 and older say they use their phone to get directions or other information based on their current location.

These numbers are likely increasing as applications are increasingly requiring users to turn on their location in order for the app to be used.  Examples of this include the famous Google Maps (although some features are available without location, GPS is required for full access), Snapchat geofilters, and the biggest new contributor to location-based data in 2016: Pokemon Go.  And mobile phones aren’t the only thing contributing to location databases.  The location of many smartwatches and other portable technologies can also be tracked.

This location data is so valuable to marketers.  There are a number of reasons why, but three primary benefits include data collection, location-based marketing, and tracking the effectiveness of marketing activities.

  1.  Data collection and analysis

Location tracking on mobile devices gives marketers an abundance of data about consumers.  Knowing where people go, which people go where, and how often people go to certain places can drastically assist marketers.  Although the amount of data regarding the locations of mobile devices is very large, this data can give marketers insights into consumers’ purchasing habits and trends, and help segment consumers into potential target markets.  It’s easier to sell to a market you truly understand, and location technology can help marketers do just that.

  1.  Location-based targeting

Location-based targeting or geo-targeting is the process of advertising and marketing directly to consumers based on their current location.  GPS, Bluetooth Low Energy (BLE) beacons, and other technologies have made it possible to send notifications or messages to consumers whenever they are within a certain proximity of something.  A BLE beacon is a small device that emits a signal that can be picked up by bluetooth-compatible smartphones.  The beacons then send notifications to the smartphones with some pre-determined marketing message, like an alert for a certain sale.

Starbucks uses BLE beacons to allow their customers to use the Starbucks App to order ahead.  Whenever a customer is within a certain proximity to a store location and has the app installed, the Starbucks icon appears on their home screen.  The user can then swipe up on the icon to open the app and order, even without being in the store.  This benefits Starbucks hugely, as it acts as a reminder for their customers that a location is nearby, reduces the friction of the ordering process itself, and allows baristas to pre-make drinks which reduces wait times.

Many other industries have moved towards using this marketing technique as well, such as grocery stores like Whole Foods, Carrefour, Eat, Tesco, and other companies such as GasBuddy, McDonald’s, Walmart, Nordstrom.

Not only does geo-targeting make it easier for marketers to directly reach consumers while they are in the right location to make a purchase, it also tends to be more accepted by consumers due to the utility of convenience that it grants.  If someone is already nearby a certain product or service and the consumer fits the target market, they would probably be happy to have a reminder to purchase something.

According to a study by Microsoft titled “The Consumer Data Value Exchange” from 2015, 99.6% of consumers would share data for cash rewards and 89.3% would share data for location-based discounts.  This demonstrates an enormous acceptance of geo-targeting that includes some sort of benefit for consumers.  Marketers who choose to utilize this form of marketing should try to include some incentive for the consumers being targeted in order to increase both acceptance of the method and willingness of consumers to respond with the desired action.

  1.  Tracking marketing efforts

Not only do location tracking technologies give us general information about where people are and what they are doing, it is also incredibly useful in determining whether marketing tactics are working or not.  For online stores, it’s easy to see how a customer gets to the site, and then whether or not they choose to purchase anything.  However, marketing can sometimes be hard to measure when people come to a physical store.  Was it an ad on a magazine that brought them in?  A social media campaign?  A recommendation by a friend?  With location-based marketing, it is becoming easier to see where people come physically come from, but it goes deeper than that.  If an online ad for a physical store is displayed on a specific mobile device, and the next day that same mobile device shows up in that store as tracked by location technology, it may be fair to say that the online ad had some influence on the customer’s purchase decision.  Although this may be more difficult to track than online marketing leading to online stores, it’s definitely becoming possible.  The technology surrounding this will likely become more advanced and easy to use in the next several years.

Photo courtesy of https://flic.kr/p/kjXY6a.

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