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Location-based mobile marketing: brands knowing where you are

20 Oct

Imagine that you walk around the streets of London and receive a text message on your mobile to let you know that you’re approaching a Starbucks coffee shop and that you will get money off your first cup. Future music? Big Brother? Absolutely not. Location-based mobile marketing has taken off, especially since the popularity of social applications such as Foursquare.

Recent campaigns by Starbucks and L’OreaI have helped me to learn more about how location-based marketing works. I’ve learned about two important differences. First, the difference between “mobile marketing” and “location based services”. Mobile marketing is all about using mobiles to market directly to consumers (mainly through SMS). Smartphones like the iPhone and the Blackberry enable location-based marketing whereby GPS technology is used to track where consumers are and to target advertisements or promotions accordingly.

The other difference worth noting is the one between “ push” and “pull” marketing. It’s the distinction between brands pushing (unrequested) information out to users (“push”) and users actively seeking information from brands (“pull’). The “geo-fencing” technology as used by Starbucks and L’Oreal is a good example of pull marketing. For example, in Starbucks’ case, users who have registered an interest in food and drink will get an SMS offering them money off Starbucks Via coffee at a nearby branch when they enter an area owned (‘geo-fenced’) by the coffee company. Shopkick is another channel that brands use to reward people for visiting their stores or buying their products.

In short, the main two things I’ve learned thus far about mobile location-based marketing are:

  1. Mobile location-based marketing is definitely on the rise – Especially with the popularity of apps like Foursquare and the large number of smartphone users, this is an obvious channel for brands.
  2. The ability to target and customise ads – With “pull” location-based marketing, users are able to indicate preferences and sign up for brands of their choice. Also, the GPS functionality in smartphones provides brands with invaluable information on customers’ shopping patterns and geographic locations

Main learning point: I can imagine that location-based mobile marketing can be somewhat of a daunting prospect to users. The idea that brands know where you are and can target you accordingly is a slightly scary one. However, with users’ ability to opt-in to specific brands or promotion schemes, the benefits of location-based services could well work both ways!

Related links for further learning:

http://www.mobilemarketingmagazine.co.uk/content/location-location-location-0

http://www.silicon.com/management/sales-and-marketing/2010/10/15/starbucks-loreal-to-trial-location-based-mobile-marketing-39746472/

http://www.silicon.com/management/sales-and-marketing/2010/09/07/advertisers-checking-in-to-location-based-mobile-marketing-39746318/

http://mashable.com/2010/03/15/location-based-marketing/

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Posted by on October 20, 2010 in Mobile

 

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