Businesses are forecast to spend $1.8 billion on location-based advertising in 2015 as part of their overall mobile marketing budgets, according to a new report by ABI Research, New York.
“It’s still early days and there’s no single ‘right’ approach to location-based advertising,” says Neil Strother, practice director. “This remains a very fragmented market that is full of experimentation.”
Nonetheless, the report notes that options are becoming more clearly defined. Location-based ads are enabled by three sets of technologies: GPS, Wi-Fi, and Cell-ID (location determined relative to mobile phone transmitters.) The most successful campaigns use a mix of some or all of these, depending on the product or service, region, consumers, and location accuracy required.
New location-based services are springing up, catering to mobile shoppers. Some are ‘check-in’ services such as Loopt, Gowalla, Foursquare, and Facebook with its Places, for consumers who are willing to ‘self-identify’. Others, such as Shopkick, use an iPhone app to reward shoppers just for visiting certain stores.
Some people may not want to be tracked, says Strother, “but it’s really about the value-exchange. If you care about getting discounts or being rewarded for shopping, is the value-exchange high enough so that you’ll accept having your whereabouts known to these companies in return for the benefits?”
Strother lays out a step-by-step guide for the would-be location-based retail advertiser in the report. The main points:
- Establish your marketing goals, as with any other marketing campaign;
- Analyze your customers’ mobile and location habits and develop your location approach;
- Choose location partner(s) and determine the best technologies for your brand;
- Execute your geo-targeted campaign, measure the results, and refine.