Opinion: The Hyperlocal Opportunity

A growing number of businesses are sharpening their focus on hyperlocal advertising and marketing. Still in its nascent stage, hyperlocal presents an attractive opportunity: the power to engage with customers at the optimum time and place.

The catalysts behind the hyperlocal trend fall into two camps. First is the continued maturation of technologies, namely those capable of delivering marketers the information they need to determine a consumer’s precise location.

Today there are multiple categories of information that businesses can tap into including: derived information (mobile phone number, area code, etc.); declared information (registration process, hotel check-ins, VIP clubs); network initiated information (triangulation, carrier, Wi-Fi, hot spot); and GPS (iPhone, BlackBerry, Symbian, Windows Mobile).

Second is the fact that consumers have voiced an interest in locally driven communications. In fact, according to the Mobile Marketing Association, half of mobile users who noticed any ads while using location-based services took action. The MMA also found that most mobile users are “interested in allowing their phone to automatically share their location in exchange for perks, such as free use of mobile applications and mobile coupons.” These are meaningful numbers that clearly demonstrate why a growing number of brands are looking to latch on to this trend. 

With these figures in mind, the temptation to jump into the hyperlocal waters is high. However, before taking action, marketers are advised to first run through a quick hyperlocal marketing checklist.

Make sure hyperlocal is a fit for your business
Determine if your business has a large enough customer base to warrant such an investment. Hyperlocal is best suited for businesses trying to move products that have value but also a limited shelf life. A good example would be a flower chain looking to unload the remainder of their summer flowers for a nice discount or a Starbucks franchise looking to sell off its remaining stock of Pumpkin Space Lattes before the Eggnog Latte season kicks off.  Businesses also must have real-time, 24/7 visibility into inventory and the ability to see what is available at any given moment.


Examine the competition
Conducting frequent competitor assessments is a classic business exercise that remains essential. Look at what your competitors are doing. Have they already deployed a hyperlocal campaign? If so, chances are they are grabbing your customers right now. For example, if coffee chain A is offering 50 percent off a latte to local area customers, why wouldn’t they break their commitment to coffee chain B? This is especially important if your product can be viewed as somewhat of a commodity. If your competitors are already there, you need to move now. If they have not taken action, you have an opportunity to be the first to the punch.

Educate your team
Consumer trust is critical to the success of any business and nowhere is a potential violation of this confidence more precarious than with a hyperlocal campaign. The most common perception is that this type of campaign consists of businesses firing off marketing offers to a consumer’s mobile device willy-nilly whenever they pass a store. In fact, many industry pundits believe that hyperlocal won’t arrive until that model hits the mainstream.

However, the truth is quite the opposite. Consumers don’t want to be inundated by brands every time they pass their local Starbucks. Your customers are interested in receiving locally relevant ads on their terms. Hyperlocal is about creating a community experience for the consumer that’s relevant to their area, whether it’s where they work or live, or both. Within this community, brands should develop an intelligent hyperlocal campaign that has a cadence, delivering relevant messages to consumers perhaps twice a month rather than every few hours. 

Know your audience

While attracting new customers is essential for the livelihood of any business, the hyperlocal effort is really best suited for your current customer roster. If you’re ultimately looking to strengthen your customer’s commitment to your brand, then hyperlocal is for you. Approach these customers with the opportunity to opt-in to your hyperlocal community. For those who reciprocate, you then have the opportunity to present them with attractive offers on a consistent, albeit infrequent basis. In doing so, businesses will be able to cultivate more frequent repeat visits. There’s no price tag you can put on that.

BIA/Kelsey’s 2010 U.S. Local Media Forecast predicts that local advertising revenues will exceed $2 billion by 2014. As the focus on local continues to mount, a growing number of businesses will be faced with the hyperlocal question. Examining the details above should help these businesses determine if it’s the right path for them.

Jeff Hasen is CMO of Hipcricket. He can be reached at jhasen@hipcricket.com.