Location based advertising via mobile phones will be big news in 2016. Large companies are investing millions in it, but small firms can benefit too. Here's the expert view.
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Think about the last time you walked down a street and didn’t see a single person with their mobile phone out of pocket? Or the last time you looked at a paper map for directions? Or maybe, the last time you went window shopping instead of browsing online first? It’s probably been a while…
We are living in a world where marketers need to live and breathe mobile. With 59% of people in the UK owning a smartphone and 60% of those completing online purchases on their mobile device, according to our latest Mobile Path to Purchase Report, mobile has emerged as the glue that binds online and offline experiences together.
In line with this trend, Forrester predicted marketers will be spending €6.5 billion on mobile and tablet advertising by 2020 as they seek to engage with their customers on the dominant channel.
The challenge for marketers is deciding how to split up their investments under the digital umbrella so they use their money wisely. For most, the major objective is separating themselves from the competition with an even better understanding of their audiences; who they are, their interests, their habits and where they are at particular times of the day.
So, how can they achieve these new levels of personalisation and relevance to consumers? Although most marketers see value in the mobile channel, many brands are just skimming the surface of what this channel can offer in terms of audience insights.
Phones and shopping go increasingly hand-in-hand
This is why investing in mobile location data will be a major trend in 2016; the insights it can uncover on consumer behaviour allow brands to make campaigns much more impactful. Why? Because it helps marketers to reach people not just based on ‘where’ they are, but by providing deeper insight on ‘who’ they are.
Accuracy and relevance is key
Location-aware apps are changing the way we shop, travel, eat, and connect with each other. We like to ‘check-in’ to restaurants on Facebook, pin-point our location to send to friends when arranging a meeting place, find how to get to a destination on different transport, and on apps like Tinder we even use our location to match with nearby singletons. As location becomes a huge part of peoples’ daily life, marketers need to deliver targeted and relevant messaging.
Until now, brands have never been able to get so close to their target audiences to understand their purchase motivations.
With proximity targeting technology now being so sophisticated that it allows brands, who once doubted its accuracy, to understand real-time, human footprints of shoppers, marketers can engage with particular audiences with the relevant content in the right context.
Combining location-based marketing with programmatic technology, which Forrester predict will be the default mechanism for trading online display, brands can leverage location with acute precision.
For example, impact will be limited if a female fashion retailer decides to advertise its new range of party dresses to a countryside farmer, miles away from the store, who is checking the weather on his smartphone weather app.
He is not the ideal person to target for the brand as it is unlikely he is looking for a new party dress and, even if he were to be looking for one, he is located miles away from the store. This wasteful ad spend needn’t be a problem if marketers adopted accurate and precise location-based marketing technology.
Location-based marketing can strengthen customer relationships
The massive benefit in adopting location-based marketing into advertiser’s campaign strategy is that it can strengthen customer relationships and foster brand loyalty.
Over time, brands who have welcomed location-based marketing technologies can start to build a picture of their current and potential customers. This data is in fact the crux to building personalised messaging that will make a customer feel valued as an individual.
Hello yes about those party dresses I see you are advertising...
As consumers start to feel more understood as a single identity rather than as part of a group which brands mass market to, the sense of loyalty between brands and consumers will become stronger.
Stay relevant and beat the blockers
With Forrester also predicting ad blocking will remain a ‘significant threat’ to the industry, it is more important than ever for brands to develop relevant campaigns so their customers do not feel bombarded by adverts they have no interest in.
In a blog post about the 2015-2020 ad spend forecast, Forrester analyst Samantha Merlivat wrote: “Ad blocking will force new behaviours on the publisher side, and a greater struggle to hit the sweet spot between monetisation and consumer experience.” Highlighting furthermore the importance to welcome location-based marketing with open arms.
Location-based marketing helps brands create those relevant and timely messages. It also strengthens measurement on mobile to the extent that some have described it as a new “real-world” cookie. Being able to improve campaign tracking is a major consideration for marketers who are looking for ways to justify their budgets and showcase their results to prove their contributions to the wider business.
With the amount of money spent on online display, social media and mobile advertising expected to surge significantly in the next five years, we are sure to see an increase in location-based marketing. It’s only a matter of time before marketers are attracted by the opportunity to achieve more relevant and engaging campaigns through new personalisation techniques like location-based marketing.
With unique and accurate insights that allow marketers to get under the skin of their customers and build campaigns that are more personalised, we see 2016 as the year that location marketing will emerge to rival search and social for marketing spend.
Sabrina Bailey-Navalon is marketing director EMEA at xAd