Why proximity-based apps are relevant for customer pull

February 24, 2009

Raj Choudhury is vice president of digital services at Engauge Digital

By Raj Choudhury

Distressed inventory in the travel business is the unsold hotel rooms and airplane seats that become available at the last minute on travel Web sites at fire-sale prices.

But a hotel manager in the near future could be relying on a proximity-based bidding network to convert a cancellation into a booking.

Today, travel brands typically attract consumers to peruse these bargain-priced goodies by dumping them on a travel portal -- hotwire.com, priceline.com, Orbitz -- or by sending promotional emails and text alerts to email addresses and mobile phones.

Yet a proximity-based marketing network could advertise discounted rooms to travelers driving along the interstate when they are just miles from the property. Room offers could be dispatched to car navigation systems and trigger an alert on the screen.

Road warriors who need a place to stay between sales calls and like the price can follow directions on their Garmin or TomTom to speed-dial on their mobile phones and book a room.

Hotel loyalty card members -- Priority Card, Starwood -- can pre-set preferences for room types and price these holds based on when they are travelling in order to get approved text, email, phone or OnStar alerts.

The technology to pull off this transaction hasn't been implemented yet. But the transformational marketing power of proximity-based apps is coming and it will move people to take action.

One form of this advance already is operating in Japan and was exported recently to the United States.

The company, AdLocal, pushes messages to the GPS-enabled and 3G mobile phones of people who have opted into the network.

Retailers and restaurant operators sign up for the channel that sends ads and digital coupons whenever the handsets of consumer subscribers are within four kilometers of their business.

Advertisers also can choose to send mobile messages when subscribers are near the address of a competitor or in a neighborhood they want to target.

Proximity-based applications are spreading. For some time now, fans of social networks have been loading apps to their phones that broadcast their location and messages to friends, who were pre-registered or pre-invited to participate, when they are nearby.

Technophiles are synchronizing their home and office computers with mobile phones through free apps downloaded from the Web.

One called Home Zone enables password entry and calls up a screen saver when the user walks away with his or her phone from the Mac computer. When the user and phone return, the app disables password entry and stops the screen saver.

Home Zone also enables people to set up the software to play iTunes selections, preset the volume, open files and activate the networks their computer taps into just by coming and going with their phone.

We carry our phones almost everywhere. So it's plausible to imagine carmakers contemplating a Bluetooth proximity app that starts a car as its driver approaches the vehicle. How about home security systems that automatically turn on the house lights and deactivate alarm systems as returning homeowners walk toward their front door?

So why not a marketing channel that engages people when they are near your business but too far away to see the signs posted on your storefront?

You can bet there is a horse race underway between the Web portals, geo-targeting agencies, wireless networks, handset providers and many others to deliver the Holy Grail of locally targeted advertising and fulfillment.

Raj Choudhury is Atlanta-based vice president of digital services at Engauge Digital. Reach him at .

Comments on "Why proximity-based apps are relevant for customer pull"

1. Raj Choudhury says:

   February 26, 2009 at 7:02pm

   Michael, thanks for your comment. I agree that getting ping 25+ times is extremely intrusive. My vision of how this would work is more inline with what you suggested (on-demand). For example using you Garmin and looking for a hotel or gas station in an on-demand case would allow the advertiser to bid via an adserver based on your proximity. Much like a position bid. Same would be true when using a mobile device. In fact location based search applications that are already becoming main stream could use your location and not only present the results near you, but also bid prices based on the advertisers proximity bid strategies.
   
   I really don't think we are far away from this evolution. At least in the scenario I described.
   
   Thanks,
   Raj.

2. Michael Pastko says:

   February 24, 2009 at 4:18pm

   Raj, have you found that consumers worry about these approaches being too intrusive? It sounds great to get a coupon sent to you when you're within 4km of a business, but what happens if there are 100 businesses using it in one city? Should people get pinged every 10 feet? I agree that proximity-based advertising is the Holy Grail, but only when implemented effectively through on-demand or opt-in mechanisms.