In Modern Marketing, It’s All About Location, Location, Location
Location-based marketing, the practice of using a person’s physical location to target him with just the right advertising message at just the right time, is certainly not new. Its roots might trace back to the first deli owner in New York to put his kid out on a street corner holding a sign proclaiming his bagels as the best in town.
It really started to flourish in the 1990s when the internet found its way into most people’s homes. That allowed marketers to identify visitors to their websites based on their unique IP addresses, giving them a fairly accurate idea of where potential customers were down to the neighborhood or postal area.
Now, backed by recent advances in mobile phone technology, location-based marketing—also sometimes referred to as location-based advertising or proximity marketing—is one of the hottest trends in marketing, and it is only going to grow as mobile carriers roll out 5G cellular networks this year.
Already, nearly 97 percent of global companies use some location-based services, according to the Location-Based Marketing Association. A report from Factual/Lawless Research says that 90 percent of marketers use some location data in campaigns, and more than 60 percent of them use location data to drive personalization.
Additionally, almost nine in 10 marketers said location-based advertising and marketing resulted in higher sales, followed by growth in their customer base (86 percent) and higher customer engagement (84 percent).
The research also showed that marketers in 2019 spent $26.5 billion on location-based ads, a figure that’s expected to grow by more than 40 percent by 2022.
To further demonstrate the point, the Factual survey also revealed that 94 percent of marketers plan to use location data in their marketing and advertising campaigns, but other uses exist.
“With only 24 percent [of marketers] using location as a measurement tool, there is a huge, untapped opportunity for marketers to leverage location data for measurement, for offline conversion tracking, attribution, and insights,” observes Brian Czarny, Factual’s chief marketing officer, in the report.
“Marketers today are expected to be data-driven experts, and location data is able to help them through every step of the process, from understanding their audiences and engaging customers, to measuring results and attributing success.”
And the success of location-based marketing is attributable, according to Asif Khan, founder and president of the Location-Based Marketing Association. Location-based marketing, he says, is growing because businesses and consumers alike are seeing more value in it today than ever before.
Take, for example, Amplify Credit Union, which is based in Austin, Texas. It has used location-based marketing and geofencing to optimize the marketing for its mortgage and home equity lending. Location data provides the credit union with a more granular view of where its target audience might be. Instead of marketing to the entire city of Austin, the credit union tailors its offers to members and prospects based on their specific ZIP codes. The result has been a 400 percent boost in digital conversion rates, according to Felicia Morales, the financial institution’s digital marketing director.
Based on that success, Amplify will follow a similar strategy as it expands into the Dallas and Houston markets, Morales says.
Vendors also have a hand in the growing attention to location-based marketing. “App developers are doing a better job of communicating the value proposition,” Khan says. “People see the value in exchanging their location information. There’s a huge demand from the community. Overall, the market is strong.”
It wasn’t too long ago that people were uncomfortable sharing their location information. That has changed sharply, even if there’s no marketing offer attached to it.
Ride-sharing services like Uber and Lyft are big reasons for the growing consumer acceptance, as location data is critical for them, Khan points out.