Follow your customers everywhere with location-based apps

With the rise in number of users relying on mobile phones, tablets, vouchers, and other technologies or simply customers becoming more m-savvy, businesses today are increasingly finding the need to think locally. Consumers seem more than happy to receive information on their handsets as long as it is relevant. According to a study, 49% of consumers would use location based advertising (LBA) more if the information they received is more relevant and useful. Brands these days dedicate an enormous amount of time, energy, and resource to create and maintain ‘relationships’ with their customers. It is important to understand how responsive they are to your brand and create a personal rapport with your users.

“Gone are the days of spray and pray advertising as now advertisers can select localities, zones or even cities that have the maximum penetration of relevant user profiles,” says Anil Mathews, founder & CEO, Adnear. LBA allows narrow-casting or tight focus marketing activities and initiatives to specific locations-which could be a geographical area, or even further focused.

Social media has played a big part in consumer adoption of LBA; if consumers are using the platform already, they are more receptive to use additional features like location. If they are getting something back and are able to connect with their friends, followers, and circles-this adds an even larger benefit. Mobile social networks, mobile applications stores, and location based services will be 3 of the highest value mobile services to reach widespread adoption in the next 2 years, according to Gartner, Inc.

LBA in Retail

It is believed that LBA is the next big wave in retail marketing strategy. They use location based advertising to reach highly relevant mobile audiences. It shows us where the user actually shops and eats. This translates into real customer results. Customers are targeted based on what is near to them (ie, by way of geofence) and also based on where they are (ie, you’re sitting in an airport so you may be a traveler).

According to Mathews, “For retail, there’s an added advantage of driving foot traffic and engaging those users with coupons, etc. The actual visible reach of a retail store is around 50-100 meters. While with geofencing, you are able to extend this to 2-3km. LBA will take up to 35% of the total mobile marketing spend by 2015. Location is a core factor for mobile and it’s obvious that leveraging the same will be beneficial for both advertisers as well as the audience.”

“Retail would seem to be at the forefront of this technology because of the sheer benefits it offers-the ability to focus and initiate activities to specific regions or even specific stores, is a huge boon to retailers since it allows for optimization of marketing spends. It also allows focused approach, and hence a better understanding of the medium and effectiveness of the message. The ability to reach out to the right customer or the relevant customer. The ability to induce him to visit your store with an incentive or promotion that is relevant to him/her,” says S Natarajan, head sales and retail, Titan.

More than just Advertising

Some platforms have tracking statistics and these tools are developing constantly. Compared to traditional ways of tracking your customer, LBA helps you target consumers by demographic and time of day, class, age, etc. By knowing where your consumers are, brands are able to tap into daily habits and also encourage consumers with relevant offers and messages which relate to their location.

It is important to keep track of everything so that you can learn which promotions work with your audience. This will allow you to adapt your offering to ensure a more successful investment.

LBA technology allows us to ascertain behavioral traits of customers (such as if they are food connoisseurs, outdoor enthusiasts, or business travelers) and match message to the profile of the customer. It allows marketers to identify and re-target mobile customers when they are no longer in the store. It helps build customer loyalty while they are in the planning stage for future purchases. An effective way to find out that a customer is nearby the store and can send offers to encourage the customer to visit your store.

Smart device are rapidly growing and the rate of consumer adoption is matching it. Smart devices have driven the capabilities of LBA and also opened doors for marketers to use clever techniques to get their brand in front of consumers.

LBA on mobile can focus on a variety of engagement and marketing aspects including awareness, deal distribution, traffic increases, new performance measurements, etc. Mobile is the only medium that is actually based on location and it is now the world’s dominating device.

Ashay Padwal, CTO & co-founder, feels, “If the brand is able to reach the right target audience, it could be more fruitful for him or his trends would be optimized and that’s where LBA comes in play. For example, if I were a retail brand like McDonald or Pizza Hut, I would prefer to advertise in cities that I am already located rather than to reach to consumers where I don’t have a reach presently.”

Privacy is also a very important factor to keep in mind. Mobile is a very personal device and therefore it is very important that with any location based marketing technique, the privacy of the user is safeguarded at all times.

Market Scenario

“The mobile advertising market took off even faster than we expected due to an increased uptake in smartphones and tablets, as well as the merger of consumer behaviors on computers and mobile devices,” said Stephanie Baghdassarian, research director at Gartner.

Worldwide mobile advertising revenue is forecasted to reach $11.4 bn in 2013, up from $9.6 bn in 2012, according to Gartner, Inc. Worldwide revenue will reach $24.5 bn in 2016 with mobile advertising revenue creating new opportunities for app developers, ad networks, mobile platform providers, specialty agencies, and even communications service providers in certain regions.

“Smartphones and media tablets extend the addressable market for mobile advertising in more and more geographies as an increasing population of users spends an increasing share of its time with these devices,” said Andrew Frank, research vice president at Gartner. “This market will therefore become easier to segment and target, driving the growth of mobile advertising spend for brands and advertisers. Mobile advertising should be integrated into advertisers’ overall marketing campaigns in order to connect with their audience in very specific, actionable ways through their smartphones and/or tablets.”

A study by Juniper Research says that nearly 1.5 bn people will be using LBS by 2014, with a global market worth $12.7 bn worldwide. Looking forward, the high-growth economies of China and India are expected to contribute increasingly to mobile advertising growth, as their expanding middle classes present attractive markets for global and local brands. “A lot of mobile manufacturers and service providers are ringing in innovations to drive consumer interest-from Nokia, which pioneered LBA for all mobiles on their platform, to airtel, which today offers customers several conveniences based on their location. The Play Store on Android offers a number of apps which today tell consumers restaurants which they can visit and are in their vicinity, movie theaters with choice of movies, ATM locations, petrol pump stations, and so on,” adds Natarajan.

On a Final Note

LBA is growing quickly and gaining popularity very fast and most important it is here to stay. So, if you want to engage directly with consumers it is important to think about LBA and see how it could fit into your strategy.

It has become a need for marketers to be top-of-mind when consumers are asking themselves about what, how, when, and where should they buy? Location based services can improve service delivery, customer support, etc. It is an innovative way to attract customers

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