Location-based advertising without the fear factor
Location is both the great promise and the potential fear factor of mobile marketing.
While it offers the possibility of one-to-one marketing, privacy advocates have recently decried both Apple and Android for possible data breaches that could reveal precise consumer locations.
There are obviously great sensitivities to how location tracking is used on mobile devices.
So the million-dollar questions are: Do consumers want that level of customization? Is location the most effective use of your budget, or is it the emperor’s new clothes?
Checking it out
Consider what is typically referred to as location-based services, pioneered by companies such as Dodgeball, then foursquare, Gowalla and Google Latitude.
These services promise to connect users to their friends with a game element that encourages participation.
Last September, Pew noted that this was still an early-adopter activity used by 4 percent of the population, skewing male.
These sorts of services took a giant leap forward when Facebook turned on location sharing last August – but there are no public reports on how many of Facebook’s mobile users are engaging in it.
Actual usage numbers are tough to come by as these companies are all “pre-public” and typically report how many people downloaded the app – rather than frequency of usage.
The latest public data for foursquare shows that 7 million people have ever downloaded the app. In reports from last year, they indicated that 40 percent of their users were outside the United States.
The agency Whitehorse conducted a study of smartphone users 14-plus (Lost in Geo-Location, Spring 2011) and found that while 56 percent of them knew about location-based services, only 39 percent were using one or more of the services, and 61 percent were not participating.
Of those not participating, 73 percent gave reasons that were distinctly unfavorable, chief among these were concerns about privacy, cited by nearly 35 percent.
Understandably, as a female, I am not sure I would want my entire Facebook network to know my precise location. And it seems many other women agree – all reports examining the phenomenon of social location sharing – from Pew to Nielsen to comScore – note a distinct male bias in usage.
The good news is, while location-based services has been hugely popular with venture capitalists, there are location-related mobile alternatives that enjoy enormous popularity with a broad base of consumers (no distinct male/female bias), lack the privacy concerns and, most important for marketers, achieve the scale they need to enact a national mobile program while maintaining local relevance.
ComScore just released a new data point in a mobile usage update released in June.
In terms of how they define location-based services, there is a whole set of services other than social sharing that comprise the top categories of location usage.
All of these services use location to provide relevant information but do not involve the sort of check-in-to-every-place-I-go factor that seems to turn off some consumers.
The comScore data indicate that in the media, sexy start-ups have stolen the thunder of what are truly valued location-based services.
Consumers love their smartphones and the unique location capabilities they offer which enrich their everyday lives – and easily connect them to commerce in useful ways.
Also, consumers voluntarily provide their location in exchange for relevant information in the case of weather, maps, movies, restaurants and travel.
The information they get takes them to the point of decision: What will I wear today? Where will I shop? What should I eat?
Seeing through the prism
As more consumers upgrade to smartphones, there is enormous year-over-year growth in usage of these types of location-based services, as comScore shows.
So many people use location-based services, in fact, they enable advertisers within one national buy to achieve scale – the combined reach of The Weather Channel app and mobile Web site is 28 million, including 12 million consumers ages 18–34, according to comScore – but also to target by location within that buy.
The Weather Channel maps ZIP codes to Prizm clusters and enables advertisers to cut their buys and tailor their messaging to reach different audience segments.
Auto advertisers vary the model to the location, packaged goods advertisers trigger soup ads to places based on cold-weather conditions such as chance of snow, sunscreen ads are triggered based on UV indexes.
These are all non-intrusive ways to use location to increase the relevance of advertising – which in the realm of “what works” has been proven to top demography and other ad targeting methods.
Take a look at mobile sites and apps such as Yelp, Open Table, Fandango or any travel content and you will see how they use location to increase the relevance of the ads.
Chances are you even notice those ads more due to the fact they relate to something you are specifically interested in or near, and yet they are not creepy but helpful.
Location indeed is the unique relevance of mobile, the only media device that accompanies people into stores and up to the very point of purchase.
While we understand the power of behavioral targeting online, it works best in the realm of ecommerce.
LOCATION TARGETING in mobile is in the real world where people are on their way to malls, the coffee bar and the supermarket where they spend the bulk of their money.
The kinds of location-based activities highlighted here are true services consumers used over and over – unlike the latest app gaming phenomenon which might be used for a week and forgotten.
Location has so much power in mobile, and marketers who use it responsibly will certainly increase the effectiveness of their connection to consumers – all that, no check-in required.