In 2009, when local search-and-discovery service Foursquare went online, the iPhone available at that time didn’t even have a dedicated GPS unit. It, and other of the early smartphones, could track locations using cell tower triangulation, but the the entire concept of a location-based service was still foreign to most people.

Foursquare made a name for itself by allowing users to “check in” to locations, proving they had physically visited them and designated the title of “Mayor” to the person who had spent the most time there in a given month. It was a fun novelty that captured the internet’s attention for a few months, but just as quickly faded away. However, Foursquare was definitely onto something and may have just been a little too early to the party. Today, they are one of the largest purveyors of location information along with Google. Thousands of businesses and brands are tapping into their vast pool of geodata.

These tools make clear how individuals flow through a space, where they stop, and for how long. Over time, patterns emerge and the relationship between the moving parts and the environment becomes apparent.

Those large data sources aren’t just improving targeting, segmentation, and helping to figure out consumer behaviors, they are also leveling the playing field by giving smaller brands access to the same level of detail as the tech giants. The whole sector is exploding right now: research firm BIA/Kelsey reported that U.S. marketers spent $16 billion on location-targeted mobile ads in 2017, a number estimated to top $20 billion this year.

Cookies and other digital markers have long followed our paths through cyberspace, but location-based services track users and devices in the physical world. These services have effectively turned your location into an interface: changing your position triggers events and gives you access to exclusive features.

Gamification, the inclusion of game design elements, like Foursquare’s mayorships, promote adoption of the technologies and improve engagement and ease of use. Location-based services now abound on social media and mobile apps with uses in health, entertainment, education, security, and, naturally, advertising and marketing.

Hyperlocal Targeting

It’s long been a goal of marketers to reach the right audiences at the exact right time and place. Unfortunately, display ads, TV spots, and even digital outreach is still often of the “spray and pray” variety, where it can be difficult to verify that the message is hitting home.

Location-based advertising, by contrast, can pinpoint consumers and provide extremely customized communications that are tailored to their exact position. It’s the difference between reaching someone still in the shopping mall and reaching them in the parking lot outside, which can drastically affect the impact of a campaign.

While the technology is maturing rapidly, privacy issues are still a major concern. With the spate of private information being released by hacks and other security breaches, consumers are increasingly cautious about who they hand their sensitive data to, and one’s location and patterns of movement is certainly of high concern. A well established privacy policy is a must to build trust and assure users that their information is in safe hands.

U.S. marketers spent $16 billion on location-targeted mobile ads in 2017

Transparency is also key because a policy that is hard to find won’t achieve that goal. Users should be frequently updated on the policies that govern how their information is stored, secured, and with whom it will be shared and for what purposes. That seems a bit daunting, but building trust with customers by reliably delivering on their promises should be a major goal of most brands anyway.

Location-based advertising comes in two distinct flavors:

  • Push – Advertisements and promotional material is delivered automatically to users when they hit various triggers like being in a particular location.
  • Pull – Users directly search for the information and services they want with keywords, such as asking Google to show them local restaurants.

Both are capable of reaching audiences in a much more targeted manner than previous ad serving systems could manage, but push services are popular with marketers because it guarantees their message will be seen by anyone that opts into the program.

That last part, opting in, is very important, however, because any transmissions that are perceived as unsolicited will be construed as spam and disregarded or, worse, tarnish a brand image. Best practices call for being extremely clear with users about what will be sent to their phones and choosing messaging that is digestible on the move, straightforward, unambiguous, and containing real value.

Three Examples

Whole Foods partnered with location technology company Thinknear for a ‘geo-conquesting’ campaign where WiFi geofencing was positioned outside competing supermarkets to entice shoppers to make a last minute change of venue.

Trident gum utilized a smartphone app called Collact and Bluetooth Low Energy (BLE) beacons installed near locations selling their product to target students and deliver brand messages encouraging them to try their new products.

Waze, the Google-owned navigational app, has secured partnerships with a range of brands, including Dunkin’ Donuts, McDonald’s, and Adidas. When stopped at a traffic light or searching within the app, users see branded pins directing them to nearby sponsored locations.

Conclusion

Now that these technologies are more ubiquitous and sophisticated, users are taking advantage of indoor object search features that are suddenly robust enough for a variety of applications. They are also tracking their steps to promote better health and wellness, following the path of their packages, checking the local weather, playing augmented reality games like Pokemon Go, and businesses are reaching audiences at precisely the times and places they can best influence them.

What’s more, Insights from data tied to specific locations and the activities that are taking place there are underpinning major changes in business practices. What would you change if you could see exactly where things take place on your property? These tools make clear how individuals flow through, where they stop, and for how long. Over time, patterns emerge and the relationship between the moving parts and the environment becomes apparent.

That’s the advantage of location-based business intelligence and that’s why you should expect to see a lot more of it in the years to come.