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Location-Based Marketing Explained

What is Location-Based Marketing?

Location-Based Marketing provides the ability to personalize content based on the context of the individual user, bridging the physical and digital context to provide actionable content at the moment when it can be used.

Done successfully, location-based targeting improves response rates by up to 5x. According to data published in the Good Push Index report, influenced opens are 293% higher in highly targeted location-aware campaigns vs. broadcast messages. With an average 62% location opt-in rate and an average 51% of users opting in to receive push notifications, most apps can reach more than half of their users with location- and proximity-triggered push messages.

Location-Based Marketing vs. Proximity Marketing

When it comes to mobile marketing, location-based marketing is the key to bridging the physical world with the digital world, providing contextually relevant content based on a user’s geolocation. Proximity Marketing is used to describe a more granular approach to location-based marketing, often using beacon technology to provide a more precise location of the user. Although both terms can be used interchangeably, a key difference is in the way location is determined.

Generally, in location-aware mobile apps, we define location-based marketing as the process of triggering a notification or action when a user enters or exits a predefined geolocation or geo-fenced location. If location is determined through the GPS coordinates of the mobile device, it can be defined as location-based marketing. Often, however, it is necessary to define locations within a building, where a GPS signal cannot reach a mobile device to determine a user’s location. In these cases, it is necessary to deploy beacon technology to determine the location of a mobile device. Proximity marketing refers to the process of sending highly relevant and timely content triggered by mobile devices within a predefined distance - a ‘proximity’ - to a location-based device such as a Bluetooth Low Energy beacon.

Industries using Location-Based Marketing

Whether determined through GPS or through proximity to a beacon, location is a key component of mobile context. More and more mobile marketers are using location to engage with users who have visited or are currently visiting a specific location. This becomes interesting specifically for organizations that have a brick and mortar location that defines some portion of the value to an audience. In the retail industry, it is somewhat intuitive to think of how marketing can send actionable information to mobile users looking to do product research in-store.

What is more interesting is how non-retail applications can use location-based mobile behavior. To fully understand how to implement location-based marketing into a global marketing strategy, it’s helpful to identify mobile moments that are strengthened when the user is in a specific location. Below are some of the applications and use cases that rely on location data to optimize mobile engagement strategy.

To understand how location can support mobile marketing strategies, it is helpful to think about the types of locations where groups of people congregate and may be looking for information about the venue. This includes many large public venues such as groups of retail shops, as in the case of a shopping mall or center, but also includes transportation venues such as airports, or train / bus stations.

More and more sports venues are recognizing the value of improving the visitor experience for spectators, through in-seat concession offers, instant replays, and indoor wayfinding. Hospitality venues have a unique interest in applying location-based messaging strategies to keep their guests on-site where they will spend their time and money within the venue. Hospitals are another venue-type where visitors are often anxiety prone and looking for information about the location, for example locating the gift shop to buy flowers for a relative or navigating to a medical appointment within the hospital.

Industry Use Cases

Wayfinding, Navigation or Checkin

Traffic Flow Monitoring

Proximity Payments

Asset Tracking, Merchandising

Retail

Hospitality

Stadiums

Events

Travel

Transportation

Hospitals / Healthcare

Industrial

Restaurants

Glossary of Terms

Location-based marketing is a direct marketing strategy that uses a mobile device's location to distribute content or services (such as push notifications) associated with a particular place.

A location-based service (LBS) is a software application that uses location data from an IP capable mobile device to target specific users based on location or location history.

Location-based technology refers to the technology that makes it possible to locate a device within a specific geographic location. The most common technologies deployed in location-based marketing applications include geofencing with GPS positioning and bluetooth beacon technology for indoor positioning. Other technologies used in location-based apps include Radio Frequency Identification (RFID), Near Field Communication (NFC), and QR Codes.

Geolocation is the wireless detection of the physical location of a remote device. As a noun, geolocation refers to the physical location itself; as a verb, the term refers to the process of detecting that location.

Proximity marketing is used to describe marketing or ad campaigns that are triggered by the proximity of a user to a specific geographical location. Proximity marketing campaigns typically rely on bluetooth low energy beacons or geofences to trigger a specific course of actions.

A geo-fence is a virtual perimeter for a real-world geographic area. A geo-fence could be dynamically generated—as in a radius around a store or point location, or a geo-fence can be a predefined set of boundaries, like school attendance zones or neighborhood boundaries.

Geo-fencing involves a location-aware device of a location-based service (LBS) user entering or exiting a geo-fence. This activity could trigger an alert to the device's user as well as messaging to the geo-fence operator. This info, which could contain the location of the device, could be sent to a mobile telephone or an email account.

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