Location-Based Marketing

What is location-based marketing?

Location-based marketing, also called geolocation marketing, is a form of mobile personalization. It is the use of real-time data to engage with users based on their real-time location.

How does location-based marketing work?

There are three categories of location-based marketing: geo-targeting, geo-fencing, and beacons. All three target customers at varying levels of distance and can be used to trigger automated messages, such as push notifications.

Geo-targeting generally uses a visitor’s IP address rather than GPS location, so geo-targeting actually predates mobile. Of course, IP addresses aren’t very precise, and it’s cumbersome for marketers to target specific neighborhoods based on IP address blocks. That’s why this type of geo-targeting is more commonly used for broad regions, like an entire city.

On the other hand, geo-fencing is the mobile era’s answer to traditional geo-targeting. Geo-fencing uses a mobile device’s GPS location rather than its IP address, so the data is much more precise. A geo-fence can be as wide as a city, but it’s more effective when targeting smaller regions like specific neighborhoods or streets.

Finally, beacons are the narrowest of all three location targeting methods. A beacon is a small, physical object that receives location data from nearby devices via Bluetooth. Because it’s Bluetooth-based, beacons can be deployed in areas with poor cell reception, such as the interior of a store.

Using any one of these three methods, marketers can trigger push notifications when users reach a particular location. For example, a travel app using geo-targeting may send a message to all users stuck in a New York snowstorm about a flight sale to the Bahamas — an enticing deal for those with winter blues. Or a retail app using beacons may trigger a push notification to shoppers in a brick-and-mortar store a sale at that branch. By personalizing messages based on user location, marketers can send more relevant messages and improve conversion rates at exactly the right moment.

What are the secrets to an effective location-based marketing campaign?

To increase the chances that location-based push notifications convert users, marketers should also segment their audiences and trigger messages based on lifecycle stage, behaviors, preferences, or demographics.

For example, if a brick-and-mortar department store has multiple offers, ranging from clothing to home goods, its app counterpart could send a push notification luring customers into the store, and then target different segments based on their past shopping behavior — sending someone who has previously purchased a couch info about a flash sale on rugs. Messages can be further enhanced with deep links, taking users straight through to conversion points, like a product details page or their shopping cart.

Finally, a word of advice when it comes to obtaining user location data: For the most accurate data, encourage your customers to enable location services. To increase the number of users who opt-in, send an in-app message explaining how location services can improve the app experience — before the default system prompt.

You can find out more about effective location-based marketing campaigns with Leanplum’s Geolocation Marketing: Taking It to the Streets webinar.