The Challenges — and Opportunities — of Location-Based Marketing
Location-based advertising through push notifications are 20 times more effective than generic banner ads, writes Boostability's Kelly Shelton.
Since the widespread adoption of smartphones, location-based marketing has been continuously growing. This is thanks to its benefits for consumers and marketers alike: Knowing where a user is located allows a marketer to better target this person, which leads to a more personalized experience for the consumer.
But while location-based marketing does open up a wealth of opportunities, it does not come without its share of challenges.
Challenges of Location-Based Marketing
1. Users Must Opt-In: Around 40 percent of users are hesitant to share their location with apps, according to a survey from Skyhook Wireless. This means you may only be able to target a fraction of your audience.
2. Relevancy: When faced with constant requests from apps, social media platforms, and websites asking for their locations, users feel less inclined to share their data. It needs to be obvious why users would want to share their location with you and how it will benefit them. Make it clear from the start why location data is worthwhile (or even necessary) for your service. If you don’t, users may feel as if you want to spy on them.
3. Privacy Concerns: Users cite privacy as the main reason why they turn off their location settings. They are often concerned that businesses will share their data with other services or send them annoying ads.
These concerns are justified, as many services (including those from major brands) do share locations with others without users’ knowledge. A study from Carnegie Mellon University found that some smartphone users had their locations shared more than 5,000 times within a two-week period. It is crucial to show that you understand privacy concerns by detailing how you will use location data. For instance, if you will not share the data with anyone else, you should clearly state this. Alternatively, if you do want to share data with third parties, be upfront and detail how exactly the data will be used.
4. Grabbing Attention: When too many services request location data, users can be overwhelmed with notifications and other types of content. This makes it difficult for you to cut through the noise and make sure you are noticed. Sending users even more content will only exacerbate the problem and will likely cause users to turn off their location settings.
Instead, you need to give users a reason to want to keep receiving marketing materials.
5. Accuracy: For your location-based marketing to be effective, it is essential that locations are accurate. Inaccuracies may be due to an unreliable method of pulling data, moving devices, poor interpretation of data, high urban density, or outdated data. How accurate the data needs to be will depend on what you are offering, but in all cases some degree of reliability is critical to ensure you provide a relevant message.
You can prevent problems by using pattern recognition technologies. This enables you to target users according to proximity points of interest. When you add to this historical location data, you can judge the likelihood that users are in the places you believe them to be.
Opportunities of Location-Based Marketing
1. Offer Useful Content: Knowledge of users’ locations allows you to deliver content that has value to your leads and customers. This moves yet further away from generic information and closer to personalized messages. This allows you to build relationships and develop loyalty.
2. Higher Conversion Rate: Location-based advertising through push notifications are 20 times more effective than generic banner ads, according to Entrepreneur. By using ads correctly, you significantly increase your chance of conversions. To overcome the challenges of location-based marketing, you need to embrace the opportunities.
As location-based marketing becomes more common, it is likely that more users will become open to the idea of sharing content — and you have the chance to take advantage of this. By increasing users’ confidence in your brand and demonstrating value, you can even encourage users to search for your local content.
**Kelly Shelton is the VP of Marketing at Boostability.