Location-based advertising is coming into its own to the tune of $1.8 billion a year. That’s the amount that businesses will put into LBS (location-based services) including mobile marketing by 2015, according to the latest information from ABI Research, a market intelligence company specializing in emerging technology and global connectivity.
Location data helps companies plan text marketing campaigns effectively. All mobile phone users can be geographically identified to a fairly small area, by tracing the call to the closest mobile phone transmitter. It’s not only SMS marketing campaigns that can be tailored to local users: newer social websites including Foursquare take advantage of this technology as well.
When discussing questions about privacy and tracking concerns, ABI Research practice director Neil Strother acknowledges that “some might be put off by the ‘Big Brother’ aspects of this, 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?”
In order for a retailer to plan a mobile marketing campaign using location as a trigger, consumer location and mobile habits must first be recorded and analyzed. One example of LBS advertising can be seen with North Face, the outdoor gear and apparel company. Opt-in consumers get text messages whenever they’re within a certain distance from one of the physical retail stores. These sale or new product ads serve as reminders to buy at a later date and as impulse or convenience purchase prompts.
Location-based ad campaigns aren’t only for those retailers who have a relatively high density of outlets in one city. Specialty shops, for example, whose customers either drive long distances or frequent only once in a while would likely benefit from a reminder text message whenever they happen to be in the neighborhood.