Location-based marketing on mobile runs on opted-in location data. The vast majority of location-based marketing is powered by opted-in GPS data, received from smartphones. That is, when someone opts-in to share their location with an app, the latitude and longitude data gathered from that app is what powers location-based marketing and analytics. There are other sources that can be used, such as beacons, Wi-Fi, and IP address as well. All of these also require opt-in permission to use.
The two biggest entities using this technology to sell digital ads to location-based audiences are Facebook and Google. The two capture a combined 57% of all digital ad spend in 2018.
Let’s explore how this works. First data taking in is the location data. It is then aggregated and then matched to a “point of interest”, which is typically a business. This is one of the most difficult steps in the process, as it requires up-to-date business information, keeping track of which stores open and close, categorizing them correctly, as well as keeping up-to-date footprints of buildings. Many times the next step is to enrich the data, appending other demographic or behavioral insights to it to build out richer audience profiles. Marketers create a method to build or select their location-based audiences using this data. The marketer will want to take action on those audiences, serving ads or content to them across mobile, desktop, social media, or programmatic advertising.
This type of marketing can be specially beneficial for brick and mortar businesses like restaurants, retailers, and auto dealers. For e-commerce businesses that want audiences that visit specific retail locations like competitors that sale similar product or seasonal, annual, or themed events like conferences and trade shows can also benefit.
A few examples of types of location based data technology.
- Geofencing –Find real-time visitors. Geofencing is creating a virtual barrier around a location. This can either be a radius around a large location, or a very specific building footprint. The word “geofencing” can also be used to refer to advertising when someone enters that virtual barrier. They may receive an alert, push notification, or an ad within a mobile app based upon that current location.
- Geotargeting – Find past visitors to their locations. Geotargeting refers to delivering ads to people that were previously in, a specific location. Geotargeting refers to serving ads based upon historical location visits to points-of-interest, rather than serving ads based upon the current real-time location. Also known as geofencing campaigns.
- Geoconquesting – Find Competitor’s visitors. Geoconquesting refers to serving ads to people when they are currently in, or were previously in, a competitor’s location or locations. This tactic uses technology such as beacons or NFC to trigger ad delivery, alerts, or content to a smartphone that is within just a few feet of a specific location.