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Why location-based marketing is an overripe low-hanging fruit

While the rise of geo-conquesting, navigational applications and an increase in sophisticated data have made campaigns from brands such as Toys ?R? Us, adidas and Jack in the Box stand out in the mobile space, the number of ill-conceived location-based messages that have alienated consumers should give marketers pause about the risks of overdoing location targeting.

The issue becomes more prominent as marketers go beyond driving in-store traffic and instead use branded apps, search and integrations into third-party navigational apps such as Waze to lure interested consumers. Misfiring campaigns stemming from overuse of location-based tactics suggests a big challenge for marketers in the weeks and months ahead will be resisting an over-reliance on mobile location.

?For many consumers, the mobile phone is the only device that they carry with them in-store while making a purchase,? said Tim Jenkins, CEO at 4Info. ?Obviously this is what makes mobile advertising so attractive and potentially valuable. 

?Theoretically you can deliver a message in that last mile before a consumer makes a purchase. While this is sometimes true, many marketers believe that this is the only appropriate time to advertise on mobile devices, which is where they go astray.?
 
Mobile site
Consumer packaged goods brands frequently tap location targeting but other sectors, such as retail and automotive, use it as well. In examples of successful location-based outreach, adidas linked mobile search campaigns with location extensions to drive consumers who were searching for a store straight to the store locator page on the brand?s mobile site.

Best Western ran a location-specific campaign in the state of Washington around airports and competitors to encourage consumers to book a hotel. And Dairy Queen bet on mobile advertising with a campaign to show consumers where they could find Orange Julius locations inside the ice cream shops.

Best Western mobile ad.

Then there is the example of the automotive retailer that targeted a car buyer on a dealership lot.  

?Seems like a smart idea, until you realize that by the time most consumers show up on a dealer lot, they?ve spent days or weeks researching cars and narrowing down their choices,? Mr. Jenkins said. 

?Delivering a mobile ad 20 minutes before they sign paperwork on a new car is usually way too late to influence the purchase decision.?
 
No matter the sector, location-based targeting works best when certain truths are kept in mind.

First, while consumers may carry their mobile devices into a grocery store, there is no guarantee that they will even take it out and use it while shopping in-store.
 
Second, if they do access their mobile device while shopping, they can only be reached with an ad if they are using an ad-supported mobile application or site.  

?Outside of a retailers? own app or perhaps a specific shopping app, which they may use to find coupons or compare prices, what apps are so powerful or important that they are going to take their attention away from their urgent task at hand - shopping for groceries?? Mr. Jenkins asked. 
 
Third, is the best time to try to sway a consumer to choose a product really while they are in-store? 

?Between being distracted with their kids, jostling among crowds and entering the store with a pre-defined list of specific products to buy, it may not be the ideal time to try and reach a consumer to convince them to buy Brand Y of ketchup,? Mr. Jenkins said.

CPG advertisers should use multiple tactics to reach consumers throughout their day on their mobile devices, and use location to adjust the message for relevancy and context. 

Do not just focus on in-store but consider when the consumer is near a store. For example, offer quick click directions to the drug store that is just a half-mile from the consumer?s location.  

?Quite often, in-store is too late,? Mr. Jenkins said. ?Except for the most value conscious consumer, the offer would have to be really compelling to get the consumer to go to a new location or even double back in the same store to make the purchase. Hard to do, particularly for low cost items.?
 
It is crucial to remember that the success of a location-based message or interaction will be individually driven.

Coors mobile ad.

?It?s going to be highly effective on some populations, but not on others,? said Shannon Denison, vice president of product and insights for Voltari.

?At the point we jump to an individual's mobile devices, we've gotten very personal, and all notions of audience targeting should be considered in that light ? an audience of one. Meaning, even if I can use location to figure out who you are, will the consumer react positively to my targeting??

Over-reliance on location marketing tactics tends to come into play when marketers do not distinguish between approximate in-location and exact in-location. 

?I can?t stress enough the importance of targeting consumers or visitors with precision ? not estimation ? using content and offers that are most relevant to that mobile user?s specific location at that particular place and moment in time,? said Dave Wentker, CEO of Tapcentive.

Location-based data is most vulnerable or potentially misleading when it is teamed with push-message notifications as the messages are mostly based on assumptions, not precise location data. 

?It?s a big leap, for example, to assume that a customer?s distance from a beacon, or a customer?s dwell time near a beacon, indicates specific interest or intent tied directly to content from that beacon,? Mr. Wentker said. 

Marketers need to understand the consumer behind the device.

?It?s not enough to know that a user is in close proximity to a retail location,? said Tami Kelly, vice president of account management at Qualia. ?Combining location-based data with offline past purchase history or interest-based data gives marketers the opportunity to advertise to those most receptive to their messaging, ultimately providing the brand growth they are aiming for. ?

Some experts claim the need to show caution is exaggerated.

?Unless there?s an idiot in charge of marketing, I don?t think CPG companies will be over-emphasizing location,? said Gordon Borrell of Borrell Associates. 

?There?s a certain amount of advertising ? the branding part ? that has little to do with location. In the purchase funnel, however, it?s abundantly clear that the most valuable marketing occurs in a narrow geographical cone that extends from the street to the shelf,? he said. 
 

?Location is actually the better determinant of audience,? said Brett Kohn, vice president of marketing with Thinknear. ?When we know and understand where a person lives, works, plays and visits, we have a much better understanding of who they are and whether or not they fit the target audience profile.? 

Power of location
Most experts agree that location is no substitute for understanding segmentation and profiling.

Adidas mobile site.

?At the heart of a successful mobile marketing initiative is understanding the audience so that you can create the right message at the right time,? said Sheryl Kingstone, Toronto-based research director of Yankee Group.

?Proximity marketing can power the ability because it takes advantage of the power of location. Mobile is just another channel in marketers? toolkits.?

Final Take
Michael Barris is staff reporter on Mobile Marketer, New York.