That future in which a bus-shelter ad equipped with geofencing technology scans your smartphone as you stroll by—inviting you to, say, a free latte or a cut-rate back rub—may not be so far off after all.
“2012 is going to be a huge year in terms of innovation—not just with respect to being able to leverage location to contextualize the types of advertising and offers that a consumer receives, but also then to turn the corner on that and turn it into actual commerce in the physical world,” said Walt Doyle, CEO of the location-based service Where. Last spring, eBay bought Where to facilitate its mobile transactions. It will figure heavily in the forthcoming mobile-commerce initiative of eBay’s electronic payment service PayPal, which has already been tested with Best Buy and Home Depot.
And geotargeting doesn’t stop with the widely cited example of a free cup of Starbucks. While often accused of not living up to its promise, we likely will see the day, and soon, when location-based technology redefines behavioral targeting as we know it, when a consumer packaged-goods company recognizes that a shopper is in the cereal aisle and sends a Wheaties coupon to her phone. What’s more, in the not-so-distant future, a marketer could use technology like that of Where to track a person’s daily routine so precisely that it knows when she’s on her way to the office, the gym or home for the evening.
To be sure, the future of location-based marketing is about more than just check-ins.
While Foursquare, the most famous LBS, certainly opened our eyes to the potential of marketing via GPS-enabled devices and made check-ins part of the language, the category is much bigger than one company. In fact, in its current life stage, location-based advertising is far more likely to involve a brand testing mobile banners that factor in a user’s location than any single location-centric social network or app.
Foursquare may have given way to countless marketing campaigns, but it’s a mistake for marketers to equate location-based mobile marketing with a mere check-in campaign, said Forrester Research analyst Melissa Parrish—especially considering that, despite its high profile, Foursquare is not all that big.
According to a Forrester report last December, only 6 percent of U.S. adults online have used an app like Foursquare or the now-defunct Gowalla (which Facebook acquired in December), representing just 2 percent growth year on year. Compare those stats to a 2011 Pew Research Center Internet and American Life Project survey which found that 55 percent of smartphone owners had used their devices for location-based information such as restaurant recommendations or driving directions.
The biggest obstacle to a check-in campaign may be the check-in itself. Plenty of brands display signage in retail locations to remind shoppers to check in, but consumers can easily ignore the call to action.
For some brands, location-based marketing remains a work in progress.
Take JetBlue Airways. Members of JetBlue’s TrueBlue loyalty program can link their accounts to an app on the company’s Facebook page. Then, by checking in at various JetBlue terminals, they automatically received TrueBlue points or special offers.
To encourage customers to participate, the airline’s agency Mullen executed a campaign in which travellers automatically received text messages when they entered an airport, reminding them to check in—a tactic known as geofencing. But as the airline shifted focus to updating its digital platforms (JetBlue unveiled redesigned mobile and desktop sites as well as an iPhone app last week), the check-in campaign went dormant.
Jonathan Stephen, head of mobile at JetBlue, says it’s not dead, however. “We started to focus on our digital refresh program where we introduced some newer technologies such as push notifications in our iPhone application,” he said. “We felt that with the tremendous number of iPhone users that we have, we wanted to leverage the push notification service to send them, perhaps, location-based messages. It’s something that we’re looking into at this point. It’s sort of a crawl, walk, run approach.”
JetBlue doesn’t run location-based mobile ads, says Stephen. One brand that does is The Weather Channel. Its mobile app, which specializes in local weather information, helps brands target users based on their location. Westin Hotels and Resorts teamed with TWC on its “Wipe Away Your Weather” campaign last fall. “It knew where the user was and then allowed them to wipe away from the screen elements of their local weather,” said Pat McCormack, TWC’s vp of mobile sales and strategy. “So if it was [snowing] in Vermont, you wipe away the snow and reveal resort destinations in warm weather climates.”