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Here, There, and Everywhere
Knowing where consumers are can reveal a lot about who they are.
For the rest of the January 2010 issue of CRM magazine please click here
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Mapping Out CRM 

When GIS first emerged, no one thought about connecting it to targeted advertising, but Léger says that marketing and advertising have become perhaps the strongest drivers. In fact, she adds, location may become “the new common denominator,” especially for predictive modeling. 

Companies are already using weather reports and analytics, but overlaying the information on a map enhances visualization for better decision making. For instance, a food-and-beverage company interested in real-time ad placements can integrate real-time weather information with the location of each campaign. In cities such as Denver, where Léger is headquartered, the weather can fluctuate between 80 degrees and sunny one day, and 40 degrees and snowing the next. Marketers can regulate the messages being delivered so consumers aren’t hearing a radio ad for hot soup when the temperature is at a record high. 

Market research, too, is enhanced when social networking is merged with location data. Real-time photos uploaded to sites such as Yahoo!’s Flickr can be geotagged to provide a more dynamic understanding of where people are visiting than, say, a post-trip survey. 

Bonte says that location history is even more important than current location. “They call location history the ‘fingerprint’ of human activity,” he says. “Nothing else is so accurate in describing what individuals have been doing.” 

Alistair Goodman, chief executive officer at advertising-services provider 1020 Placecast, certainly agrees. Goodman says his company has spent the past four years building a platform that has the “largest, cleanest, continually updated set of location data”—based on everything from GPS and cell-tower triangulation to neighborhoods and airport destinations. “Anywhere we know of,” he says.

“We’ve begun to build a rich understanding of locations all across the country,” Goodman adds, noting that the system profiles places, not people. In fact, the company made the fundamental decision to collect no personal data whatsoever. “We can only be in one place at one time and where we are reveals a lot about who we are and what we’re interested in,” he says. 

Retailers using Placecast’s mobile marketing solution ShopAlerts specify an imaginary polygon, or fence, of any size around their physical trading area. When any consumer who has opted into the service enters that zone, she will be alerted with an SMS, email, or display advertisement that’s customized on the fly. On phones with a Web browser, addresses can link directly to a map, and phone numbers can be click-to-call. 

At press time, American Eagle and several other retailers were beginning to launch initial runs of the solution for the holiday season. “Retailers are getting it now,” Goodman says. “We can finally connect the Web and digital to the physical world.” CRM data, though, isn’t yet integrated into ShopAlerts. Retailers have expressed interest, Goodman says, and Placecast is exploring this opportunity, but he acknowledges there’s “a lot more to learn about how to do this in a way that consumers are going to find valuable rather than intrusive.” 

Sense Networks offers a seemingly opposite perspective on location-based targeting. “I don’t care if you’re in Tulsa or New York,” Skibiski says. “If the attributes are the same, it’s the same to the computer. We take the location data, remove the location from it, and replace [that] with meaning that a marketer can do something with.” In other words, a 20-year-old boy and a 70-year-old woman searching for a clothing store from the same street corner may receive identical, generic results; soon, though, they’ll receive personalized information. 

Sense Networks’ Macrosense platform takes in an exorbitant amount of data to understand everything from the basic longitude, latitude, and time, to demographic data (Is the area rich, poor, ethnic? What is the educational level? Is it a red or blue region?) and regional data (Are there farms, financial services buildings, or bars in the area?). The technology looks at the environment and the people nearby to segment individuals into “tribes.” (See sidebar, “Collision at the Intersection of Real Street and Digital Avenue.") Skibiski compares the technology to Google’s parsing of inbound and outbound links to understand the context of any given Web page. “We do that for the real world,” he says. 

Skibiski claims the technology builds models automatically and can identify behaviors better than human interpretation. Someone who goes to a different bar every other night, for instance, is much more likely to be an influencer compared to someone who goes to the same bar over and over again—good to know for a spirits company. “It’s funny what comes out of our system,” he says. For example, the system has identified various activities that correlate with customer churn: when those around them are churning, which likely suggests exposure to similar influences; increase in entropy (e.g., the disruption of a home-work-home travel pattern) points to a possible life change; exposure to penitentiaries, which suggests the customer is going to jail. 

This knowledge comes in handy, particularly for the prepaid mobile carriers that don’t have the advantages of acquiring customer addresses, demographics, and even social security numbers, like the post-paid carriers do. Prepaid plans are one of the fastest growing segments in the mobile market, Skibiski says, but carriers have little to no insight on their customers. By looking at where customers are going (e.g., what neighborhoods) carriers can hone their marketing strategies to target the desired demographic—say, the affluent group. By identifying the most-affluent customers and only delivering offers they would find highly valuable, carriers increase the probability that those customer will refer other wealthy customers.  

“We don’t realize how stupid our mobile phones are right now,” Skibiski says. “Why doesn’t my phone know that I’m hanging out in this place, at this time, and 80 percent of people like me in this situation did this?” He imagines an Amazon for the real world, powered by the mobile world, but because no one has achieved that yet, everyone’s competing to be the victor. The end result could be revolutionary. “Map applications and all the stuff on mobile today,” he says, “that’s just at level zero.”

There You Are

According to Bonte, mobile advertising is in an early phase—claiming no more than 10 percent of total advertising budgets. (And most of that is spent merely translating the online world—i.e., display advertising—to mobile.) Where Bonte sees the real value of mobile advertising is in the ability—similar to the promise of Placecast’s ShopAlerts—to trigger consumer action on the spot. Advertisers, he says, are willing to pay more for the higher returns associated with that level of interaction. All that stands in the way? Privacy concerns and issues around abuse of personal information. 

Paul Hallett, chief executive officer of digital destination guide and mapping solutions provider Schmap, sees a clear distinction between privacy and security. Privacy involves users of an application or service not wanting outside parties to know their information. Security, on the other hand, is often an issue of unknowingly exposing oneself to risk. 

Twitter unveiled a new geolocation feature to its platform last August, allowing developers to build longitude-and-latitude options into any tweet. Users will not only see the location of tweets sent by those they follow but even tweets from a particular neighborhood or city. Cofounder Biz Stone emphasized that the feature is turned off by default and users will need to activate the location feature—perhaps on a tweet-by-tweet basis. Moreover, data will only be stored for a limited time. 

The notion of people knowing where you are at a given moment may be unsettling, but the industry is aiming for standard policies (e.g., consumer opt-ins) and a framework around the capture and utilization of location data. “We’re not there yet,” Bonte says, “so there’s still a lot of suspicion.” 

Concerns may be generational, as younger consumers are far more comfortable with sharing their information online, especially if there’s a value-add. Foursquare is a mobile application that integrates social networking, mapping technology, and a gaming aspect, allowing people to not only share their locations but see where their friends are and compete for status. In a blogpost about the application, Greg Sterling, founding principal of Sterling Market Intelligence, points to the niche appeal: Foursquare, he writes, “has the potential to be a ‘cult-like’ hit with a select demographic group (read: college and early twenties) that goes out a lot, is intensely social in groups, and has time on its hands.” 

For the rest of the world, geotargeting may just take some getting used to. Léger isn’t worried about consumer fears hindering growth and cites the adoption of Facebook as an indication of cultural shifts: Initial privacy concerns didn’t stop 50 million new users from joining Facebook between April and August 2009, expanding membership to more than 

300 million worldwide—or stop another 50 million from signing on by late November as Facebook’s population crossed the 350 million mark and eclipsed that of the United States. 

Each individual identifier in the client data analyzed by Sense Networks has been replaced with a code that only the client can decipher—once the data’s back in the client’s database. “You never want to store anything that’s unique about somebody’s place,” Skibiski says. “Take the data in real time, process it…then delete the data so it’s never sitting around.” With that policy, he says, privacy becomes a nonissue. Sense Networks, in fact, declared a “New Deal on Data,” giving customers the full rights of possession, use, distribution, and disposal of their information. 

“The issue right now is that people don’t know because they never thought about combining this in the past,” Léger says. “Privacy needs to be addressed but it’s not clear what the real answer is right now.” With more information, people and companies are empowered to make better decisions, but the good things rarely come without the bad. 

Bonte brings up concerns around crowd sourcing, where, for example, how fast people are moving can be collected en masse and used for public services like real-time traffic reports. While the information is not necessarily private, it does bring up concerns around being tracked, and whether drivers should be rewarded for their contribution. 

In a reverse perspective, location intelligence also gives the consumer insight into the company’s activities. User-generated networks, social media platforms, Web content, and mobile content, combined with location information, can be aggregated to create transparency in the organization. Just as companies can learn more about their consumers, consumers can, in turn, learn more about the companies they work with. “If your customer has become more location-savvy than you,” Léger warns, “then you’ll need those systems in order to keep up with your customer.” 

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