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July 08, 2010

"Here and Now" Culture: Location-Based Marketing

The proliferation of GPS-enabled smartphones and the advent of location-based mobile browsing has spawned a new breed of consumer that expects marketing to happen seamlessly, “in the moment” -- whenever and wherever they are at. It’s a new HERE AND NOW consumer culture that blends the online and offline worlds, fueled by the demand for instant gratification, the desire for more meaningful brand interactions and shared experiences, and the expectation that technology should enable these.

Location-Based Experiences

In his article, Digitalization of Retail, Jeremy Lockhorn of Razorfish describes consumers’ new “non-linear shopping journey” using mobile and interactive digital media as “the connective tissue” that ties together a seamless, multi-channel brand experience. Brand organizations who adapt their marketing communications systems to deliver a location-based experience to consumers will reap the rewards of delivering highly targeted and more relevant messages: Higher response rates and marketing ROI.

But how? And what does “location-based” even mean?

A location-based approach means delivering marketing messages and media to consumers via digital channels based on: a) their current physical location, and; b) their presumed position along their path to fulfillment. It’s like leading a mouse with through a maze of breadcrumbs to the cheese. Each message is designed to prompt action that propels the consumer towards the next step in the purchase (or repeat purchase) cycle. Their location could be anywhere: At home on their PC; at the café with their iPad; on-the-go with their smartphone; or inside a brand environment, like a retail store, hotel, or sporting venue.

The Customer Journey

It all begins with examining the “customer journey”. It’s the series of real-life interactions or “experiences” an individual could or should have with a brand that moves them towards a destination (i.e. a purchase, a booking, an experience). Delivering a location-based brand experience requires not only mapping out the customer journey, but also tailoring each interaction to the customer’s needs or motivations based on their physical location at the time of each interaction.

In other words, location-based marketing creates experiences for consumers in the “here and now”. It delivers meaningful interactions when and where consumers want and need them, propelling them further towards an end goal (whatever that may be). It’s literally brand on-demand. And today’s consumer doesn’t just want and need it — they expect it.

The key: Deliver something of value to the consumer (the breadcrumb) at each step along their journey toward the goal (the cheese).

Applying Location-Based Marketing

Consider for a moment the unique customer journeys of...

  • A retail shopper
  • A new home buyer
  • A tourist
  • A sports fan, theatre-goer or event attendee
  • A charitable donor

There are numerous opportunities for interaction along their respective journeys as they bounce between the online, mobile and offline world. Lockhorn describes one such journey in the aforementioned article. Jack Aaronson describes another retail journey in his article on social shopping.

Leading marketers are awakening to the fact that the systems and tools enabling location-based marketing actually exist and can be leveraged with a bit of effort and a lot of thought. Technologies and emerging media that are empowering location-based experiences include HTML5’s Geolocation API; GPS and real-time locating systems (such as RFID, Wi-Fi or Bluetooth) coupled with mobile search; digital signage and interactive touch screens; mobile devices and smartphones such as the iPad and iPhone; and mobile tagging systems such as Microsoft Tag.

Realestate Figure 1: A passerby browses real estate listings through an interactive storefront window display.

Windermere Figure 2: Home buyers can scan a mobile tag with their smartphone to access product information to aid in their decision making.

One way to contrast traditional marketing vs. location-based marketing is through a “treasure map” vs. “radar” analogy.

Traditional Marketing: The Treasure Map

Traditional advertising and media is akin to a pirate’s treasure map. A billboard, TV or print ad  is like an ancient scroll of crude landmarks and runes with a prominent “x” marking the spot at which the treasure can be found... Except the map tends not to travel with the reader. So, the consumer must see or find the map, decipher the map, and desire the treasure enough to navigate the indicated path to the plunder (i.e. fulfillment). It’s obvious that, given today’s technology and media, this method has several deficiencies: Consumers must receive, understand, determine the relevance of -- then act upon -- a single message, ignoring all others until they reach fulfillment. We all know that, along the path, the consumer will encounter other messages (noise), distracting them from their quest and pulling them off course.

The traditional “treasure map” marketing model necessitates a single consumer follow a linear path that can’t be strayed from.

Location-Based Marketing: The Radar

Location-based marketing acts like a constant beacon, using (primarily) digital media to draw consumers towards a single destination (or multiple destinations) through a constant stream of messages and brand interactions. At each beep of the beacon, the consumer is delivered an experience relevant to their physical location and needs at the time of the interaction. Just as a ship would signal others nearby, so too can the consumer enroll others in these experiences through social networking and mobile technologies (read the example in Aaronson’s article). The advantage to this method is that consumers receive the same signal the entire journey, honing in until they reach the source, and can enlist the input of others to aid in their decision-making along their journey to fulfillment. 

As Lockhorn explains, “...it’s everywhere commerce” that works “...the way they (consumers) want to shop.”

What does it all mean?

The implications of the “radar” approach are massive. Location-based experiences can — and will -- transform the way consumers interact with brand organizations big and small. Not just consumer product brands, but destinations like cities, restaurants, retailers and realtors, sports teams, entertainment venues, theme parks, and even charities.

The tools to deliver location-based experiences exist today. They are strewn about and lay ready-and-waiting at the marketer’s fingertips. Who will be the first to assemble them into one toolbox? It’s already happening. And certainly we’ve only begun to imagine the potential that location-based experiences can unlock. Exciting times for marketers, to say the least.

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Comments

Rob, this is an excellent treatise on the potential benefits to companies -- drawing consumers to a location. But what about the benefits to consumers? This is the part that is sorely lacking. As long as the only value is collecting digital badges, this technology will not go mainstream.

I wrote a post about this issue that explains this further:
http://businessesgrow.com/2010/06/08/is-this-foursquare-or-bore-square/

Thanks for the excellent perspective on this important technology!

Great article Rob. As I divulge further into these digital marketing opportunites, a tour guide to point out multiple ways to utilize some of these tools in the homebuilding industry would be advantageous. -I'm sure I'll be picking your brain soon.

Great article. What we need to do is start thinking of a customer in a referential framework where they are granted the keys to create a "context" void of privacy breaches, T+C's etc.

The brand can still participate but not over reach acceptable limits with push messages.If we expect customers to stay engaged we have to respect their experience overall.

In the travel example, we are working with Airports to develop a Passenger Experience Index which includes social media based sentiment analysis -weighted accordingly to keep the brands and retail messages focused and relevant.

Further adding destination marketing opportunities extends the value to both passengers as valued customers and brands to stay within the boundaries of "opt in" context metrics.

This is the sweet spot where value meets opportunity-a engaging but valuable process with checks and balances-not pure marketing subjectivity.

Location-based marketing is currently and slowly taking their way on mobile industry. It's new in the field but it’s kind of growing at a fast rate.

Rob, take a look at this treasure: http://geotoko.com

Thank me later :-)

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