With the rise of mobile device usage, location has become one of the biggest factors in marketing. These days it seems that everything is connected to the internet – phones, cars, and watches. These devices are often tracking our location, meaning that there is an abundance of location and data available.
In this article, we will go over:
- What location-based marketing is.
- The top 3 benefits of location-based marketing.
- The top 3 challenges of location-based marketing.
What is location-based marketing?
Location-based marketing is making use of data collected on your mobile devices from current or past locations to display relevant content to you. Meaning, location-based marketing hinges around the fact that wherever we go these days, we always carry a mobile device with us.
This presents an opportunity for advertisers to personalise messages to people based on their current location. In real-time. A common way to use location data is through geofencing or geotargeting.
For example, if people are near a restaurant, a message will be sent by the restaurant to your mobile device with an offer for a free appetizer. This is a very simplified explanation.
The top 3 benefits of location-based marketing
There are many benefits concerning location-based marketing. The top three have been listed below.
Increased relevance
Given that people will be receiving content based on the places they have already been to, chances are that they would be receiving relevant information. This increases the chances of an engagement or a conversion.
This is convenient for the potential buyer as they could be notified on certain deals or promotions from their favourite stores.
Cost-effective
Location-based marketing means you’re focussing your efforts in a certain area. This reduces the wastage of time and money that would occur in a wider area.
Improved data collection
Behavioural information on your customers or potential clients can be gathered so you can make better decisions for your marketing campaigns. This could also help you improve your product or service to better suit your target audience.
The top 3 challenges of location-based marketing
The concerns of the implementation of location-based marketing are many, but below you will find the top three.
Privacy concerns
Nobody likes the idea of being watched. So, the idea of people knowing the exact location of someone, or perhaps their favourite places to go, will raise eyebrows. Fortunately, companies aim to be transparent on the data they collect as precautionary measures for both the entity and its customers.
Technical limitations
Collecting all this data is heavily dependent on the infrastructure around it. Areas that do not have technology like GPS and/or beacons will struggle to implement this idea. Small businesses with little budgets will struggle too, as this could be resource intensive as well.
Limited reach
The entire idea of location-based marketing is focussed effort in a specific area. The problem with this is that you could be missing opportunities outside that designated space. There are people who wouldn’t be interested in location-based promotions and deals.
The density of the number of people is also something that needs to be considered. One area may be denser than others, increasing the opportunity of a conversion. Others may not be so lucky.
Final Thoughts
According to Statista, 20 to 22 million people in South Africa use a smartphone. As you can see, location-based marketing has increased with a growing demographic of mobile device users.
So, next time you pass a store and receive a message based on your interest, you can be assured they are using location-based marketing.
