Location-Based Marketing (LBM) is a direct marketing approach that employs mobile devices like smartphones to offer potential consumers items at a local sales or service location. Users must have consented to receive push notifications and will receive notifications on their smartphone as soon as they are near a designated place or site. A single user opt-in is required for location-based marketing, which is generally connected with the usage of an app. When the user is within range, the app queries the mobile device’s location-based services, and the notification is triggered by this location data. The goal is to reach customers at the point of transaction in order to market a product, enhance online consumer loyalty, and make the communications more relevant.
About Location-Based Marketing
Location-based services, such as GPS, GSM modules, or RFID chips, serve as the foundation for location-based marketing. On one side, navigation satellites can be employed; on the other hand, mobile radio networks and transponder chips provide additional location choices. Advertising communications are contextualized, according to this principle. The context is the user’s location, which is established by the technologies listed above and indicates a basic interest in the services provided. If a person is near a place and uses the company’s app, they are more likely to become a client or be interested in the services.
Location-based marketing is a type of targeting that uses location data to give customized offers to users using cutting-edge technology. This can help with client acquisition as well as long-term loyalty. It’s not only about delivering advertising messages to potential consumers; it’s about providing services that fill in the gaps in the company’s portfolio and, above all, complement it. In certain circumstances, the client should be given appropriate information. Incentives for in-store purchases, extra services, or just useful information like opening hours, current wait times, or information about upcoming events and special promotions are all examples.
Along the journey, potential customers may be approached with LBM at the appropriate time, at the right location, and with the correct message.
How does it work?
In the realm of location-based marketing, many techniques exist, such as location determination and approach form.
Geofencing
Geofencing is the drawing of a virtual border that triggers the distribution of an advertising message when the user crosses it. Signals and information are exchanged between the mobile device and navigation satellites or mobile radio towers.
Geotargeting
Unlike geofencing, this refers to the use of advertising media within a specific range. The technology utilized defines the area. WIFI, NFC, Bluetooth, and Beacons are some of the possibilities. High accuracy is achieved by focusing on short-range radio technology, but the range is substantially reduced when compared to geofencing or other kinds of targeting.
Local context targeting
Promotional material is provided to users depending on their location and other information. Data enrichment is another term for this. Demographic data, in addition to current location, may be used to show people adverts that are more relevant to them or to display advertising messages. When compared to Geofencing, the goal is to broaden the reach.
Users frequently check into social networking sites such as Facebook, Twitter, Foursquare, or Yelp when they visit a restaurant, café, or bar. The app use and/or browser history is read and connected with location-based data in location social targeting, which focuses on these check-ins.
Each mobile radio-enabled terminal calls itself into the next radio network to locate itself. The device’s location may be determined based on its relative position to other radio networks. Mobile radio operators use radio cells to position themselves.
Wifi Hot-spots
Advertising messages can be delivered to all WLAN members within range of hot spots in train stations, airports, cafés, and public areas.
Global Positioning System (GPS)
The global positioning system uses longitude and latitude to pinpoint devices to within 10 meters of their location. A location module is built into most smartphones, tablets, and computers. Because signals are not always adequately received, this technique is not particularly precise within structures.
Bluetooth and Beacon
Bluetooth and Beacon allow wireless information to be sent (Bluetooth Low Energy). The targeting may be customized extremely accurately to buildings with the right devices and receivers. Occasionally, a unique app is necessary.
Examples for Location-based Marketing
There are several options for location-based marketing:
Navigation in retail locations, click and collect, or incentives for walk-in consumers are all examples of stationary trading.
Gastronomy: Offers for walk-in consumers, click-and-collect, and dynamic content adaption.
Event information, ticketing (click and collect), and interactive promotions are all available.
Information about planes, trains, and traffic, for example, may be found in public areas and institutions.
Online marketing relevance
Consumers’ offline and online actions can be linked using location-based marketing. The local link with location-based data allows advertising messages to be more relevant to target groups utilizing mobile devices, increasing the likelihood of consumers accepting the material. Customers can be contacted in their local area and directed to the point of sale using this type of mobile marketing, especially in the case of stationary trade. Special customer-tailored advertising sent via a mobile device can make a significant contribution to avoiding consequences such as banner blindness and a bad attitude toward advertisements.
However, in this context, legal hurdles deriving from data protection and privacy protection are equally crucial. Opt-ins and authorization to deliver push notifications are just as important as the technical execution of such campaigns, which is quite difficult. If the technological capabilities are exploited effectively, location-based marketing can provide advertising messages at the proper time and place in the marketing mix, especially in the case of youthful, technology-conscious target groups.
