The Future of Marketing Technologies – Solving the Puzzle of Location-Based Marketing

This post originally appeared on Mobile Marketing Watch, by Brian Handly.

Just as the pace of technological innovation seems to quicken every day, the breadth and availability of marketing technologies appear to evolve just as rapidly.

Marketing automation has given rise to mass customization at scale. Significantly improved analytics ensure more efficient ad spend and improved performance. The rapid ascent of the smartphone turned marketing on its head, just as we were getting accustomed to desktop and email marketing. Augmented and virtual reality seem poised to once again flip the marketing world upside down.

Despite all of this change, there will be one data point that will serve as the foundation for marketing approaches for the next two decades.

What is that game-changer? Location.

We are still in the early years of seeing digital marketing shift away from cookie-based data to location-based. Regardless of where we are in the cycle, location significantly changes marketing and marketing technology. The smartphone’s greatest asset to the marketer is the ability to share location from opted-in location-sharing users. The cookie, which built digital marketing as we know it today, does not function in mobile. It’s an understatement to say that “location is the next cookie” – it’s much more than that.

The puzzle today is how marketing will piece together this new knowledge, determine the right use-cases, and analyze the results of location data. Mobile and location influence each consumer touch point, from initial discovery through purchase, to measuring attribution, and all the way to customer support.

First, to understand why this shift to location data is occurring, look no further than the exponential rise and popularity of the smartphone. According to Pew Research, 77% of Americans now own a smartphone, with 92% of 18-29 year olds owning one. Additionally, overall web traffic only grew 0.1% from Jan 2013 to 2016, according to ADI Advertising Demand Report, but smartphone site visits have grown 36% year-over-year with desktop visits declining 4% during that same timeframe, according to Adobe Digital Insights. The most astonishing fact is that US users spend 87 hours per month on their smartphones, according to comScore.

This massive movement from computer to mobile device means that location data is now the prime data point for marketers. Marketers must have a precise focus on taking advantage of both real-time and historical location data.

The early emphasis on location data was to serve content and ads when a person visited a specific location. For example, if a phone recognizes that it is near a McDonald’s, the person may see an ad for a Big Mac. This strategy does create new ways to engage with customers, such as location-aware push alerts and advertisements, but the industry overestimated the willingness of consumers to embrace these campaigns. Over the past 24 months we’ve begun to see the turn towards evaluating historical location data. Measuring location data over time offers more opportunity and value for marketers.

Regardless of the technology used to facilitate location data – GPS, WiFi, BLE beacons, NFC, RFID – the fundamental issue is that mobile location data reaches consumers at every point in the purchase decision journey. When a person evaluates which product to buy, either at home or standing in the aisle, his or her precise location creates drastically different marketing and support opportunities. At the moment of purchase, mobile location data points assist with store navigation, coupon redemption, and expedited checkout processes. In the future, we will also see customer service teams empowered to proactively assist customers when issues arise and where they occur. Support teams will be able to monitor where products are being used, their remaining lifespan, and potential issues as more commodities become connected to the internet.

By measuring a consumer’s path over time, a marketer can build a profile of real-world interests and behaviors. This historical data can then be used to serve more appropriate product information, better content, and more relevant advertising.

Capturing historical location data also creates the opportunity to demonstrate attribution and the efficacy of both online and offline campaigns. A marketer may measure offline behavior to create better online ads that drive more offline visits and more online downloads of an app, which creates virtuous circle. This cycle occurs while being able to validate that the advertising campaigns actually resulted in more foot traffic. For instance, Google’s recent announcement, which highlights their ability to match online ads to store purchases in an attempt to win more advertising dollars, should signal the importance of demonstration attribution.

No one can deny the massive influence that the smartphone already plays in our lives. As its adoption continues to grow, so will the prevalence of location data and the consumer’s comfort level with location-based technology. Understanding the proper use cases for location data and the correct technologies to best utilize this data will help solve the puzzle of location-based marketing. In return, this will lead us into the next wave of marketing innovation.