As a marketer, you may want to run a campaign where customers are only targeted with ads based on their physical location, this may be for brand awareness or a specific CTA (call to action) to a nearby shop, store or event. This type of strategy is called location-based marketing and is said to be a 21st-century cornerstone of the marketing industry.
This post will help you understand location-based marketing, key benefits, and the advantages of collecting customer location data.
What is Location-Based Marketing?
Location-Based Marketing (LBA) is a strategy that matches the location data of a smartphone/device to a point of interest, such as shopping centres, restaurants, stadiums and suburbs. As a marketer, you can then use this location data to create location-based audiences and analytics, so that highly relevant advertising and content are delivered to the right audience.
In simple terms, you define a location area, so that only audiences within the boundary will view your ads.
Different types of Location-Based Marketing.
There are different forms of location-based marketing used in digital advertising, The most common are defined in three categories:
1 – Geofencing
This approach lets you define a boundary based on global latitude and longitude coordinates. Only audiences that are within the designated boundary are presented with your ads – simply put, pick a location, set a radius and target ads.
What are some of the benefits?
Relevance, because you're targeting a specific area, you can be very precise with the type of messaging, creative or call to action. This is great if you have an in-store promotion, discount, or even brand awareness.
With this approach, you can also take advantage of large pools of likely customers you may have identified at a location, such as sports events, trade shows, festivals, airports, etc.
2 – Geotargeting
Geotargeting relies on a customer's IP address from their computer/device to deliver ads. This method allows you to serve ads only to customers in your list of IP addresses regardless of the location – simply put, once you have built a list of customers' IP addresses, you can begin to target them, regardless of their location with accuracy.
How does Geotargeting work?
For a computer or device to connect to the internet a unique IP address is assigned by an internet service provider (ISP), this IP address is used for identification and location across a network(internet). Geotargeting uses IP addresses to 'track' users across the internet regardless of their physical location.
How accurate is Geotargeting?
To connect online, in this case, a customer, typically it must do so using their home internet connection or mobile device, these are two different types of connections and each will have a unique IP address assigned dynamically by their internet provider, and since Geotargeting relies on an IP address, a customer will only be reached if the IP matches, so if you only have the customer's IP address from their home internet connection, you will only be able to reach them at home and not whilst away from home, as they will be using their mobile provider IP address instead.
If the IP address changes why rely on Geotargeting?
Not everyone uses a dynamic IP address to connect online, a business or institution is likely operating with a static IP address, one that never changes.
Most, if not all households, use a dynamic IP address to connect online, and the IP address will only change if a modem is restarted/rebooted, this is good news for you, as households hardly ever restart/reboot their modem.
What are some of the benefits of Geotargeting?
Your ads can ultimately follow a user, regardless of their location, to deliver the exact ad you want.
Whitelist IPs – You can define exactly who sees your ads from a list of IP addresses.
Blacklist IPs – The opposite to whitelist, exclude who sees your ads from a list of IP addresses – your competitor!.
Enables you to segment users so that you can measure attribution and understand what strategy works best.
3 – Geoconquesting
This is based around creating and targeting an audience from your competitors' known locations – in other words, converting your competitor's customers into yours.
Key benefits of Geoconquesting?
One of the top reasons to use this approach is customers are likely to be at the purchasing stage of the funnel, also known as 'active buyers'.
They are likely visiting a store to test/review an item or service and therefore you can target them with a competitive offer, such as a discount or an extra feature.
This method can be combined with your growth marketing strategy to help you collect details about customers, such as emails or IP addresses, so that you can later target specific offers or related products.
How precise can you can be in targeting and measuring?
The short answer is – It varies, but done right, it can provide pinpoint accuracy.
This is a common question, but a simple question usually has a complex answer as with all things digital. Location-based marketing relies on IP location data from different third parties who utilise different technologies for targeting users and may not be completely up-to-date or accurate.
While the accuracy varies, there are ways to measure the accuracy to ensure location-based marketing is properly running.
A solution to accuracy is through the use of a high-quality ad delivery network to serve ads, as quality data is used for ad delivery,
working in tandem, with a good analytics system, so that information on the location activity can be easily accessed, this mix should highlight the levels of accuracy required and enable calibration to ensure all the pieces are correctly in-sync.
Targeting & Measuring levels
Not every ad network can deliver to a specific location, so it's important to ensure your marketing strategy is supported, ulittle.com gives you the flexibility to deliver ads using location targeting at different levels;
- Postcode / Zip
- IP address – whitelist & blacklist
Measuring location-based marketing should, at minimum, include these important elements, the IP address, the time, and the latitude and longitude coordinates of the recorded activity.
This information can then be used to display your marketing activity visually on a map and also within your analytics platform to see and understand what is happening from an overview and also at a granular level, such as a town or postcode level. If all is properly set up, your analytics should inform you what areas are performing best.
See your current location on a map
The map below displays your current device location by placing a blue dot. The location was obtained by using your IP latitude and longitude coordinates. Click the top-right icon on the map to run, this will take you from Hawaii to your current location… Aloha!
To see this example you may be required to change your security settings on your browser.
Takeaway on location-based marketing
Location-based marketing gives you an unprecedented ability to deliver relevant messages to your customers. It enhances your marketing cycle by better understanding customers and taking action accordingly.
Even though the accuracy is not perfect, location-based marketing continues to provide marketers, agencies and brands with a host of benefits. According to Factual.com 2019 report, almost 9 in 10 marketers said location-based advertising and marketing resulted in higher sales, 86% customer base growth and 84% customer engagement. view the 2019 report by Factual on location-based marketing.
The possibilities are vast with location-based marketing, these include:
- Location – Greater accuracy due to the relative location and audience.
- Relevance – Better communication for a personalised experience.
- Less waste – Ad costs can be reduced as only relevant customers are reached.
- Customer insights – Data collected from location enhances understanding of physical customer behaviour & analytics.
- Attribution – Adds a point of reference when analysing and understanding what drove a conversion.
- Audience collection – Helps you build audiences from locations that are highly relevant to your product or service.
Which type location-based marketing is best?
The answer depends on your strategy, a common approach is to consider the differences in each and combine them to suit your strategy.
Privacy when dealing with location-based marketing
Is the collection of IP addresses and targeting legal?
Many companies already collect IP addresses to help improve their service and analytics, tracing an IP address is legal as long as it's not used for criminal activities.
Any website may collect and hold IP addresses, generally, only an ISP can link it to the name of an individual account holder.
The Australian Law Reform Commission (ALRC) suggested that simple contact information, such as a street or postal address, a telephone number, or an IP address, does not and should not, fall within the proposed definition of 'personal information'. – To find out more see Discussion Paper 72, Review of Australian Privacy Law.
Consumers' privacy should be a top priority when using location-based marketing. Please ensure that laws and regulations related to data collection and storage are followed to avoid damaging your brand or business.
General information & resources for location-based marketing.
A list of sources used for latitude and longitude information includes;
- Beacons – very accurate and precise data, capable of targeting within meters.
- GPS – very accurate and precise data, capable of targeting within 10-100 meters (unobstructed environment).
- WiFi – similar to GPS, but better in a signal-dense environment, eg; building/shopping centres.
- Mobile triangulation – Typically able to target user location within a city, town, suburb/postcode level.
- IP address – Highly accurate for a known IP but subject to change, ISPs may change the IP address of an end-user for any number of reasons. VPNs (Virtual Private Network) mask the location and will reduce the ability to track.
See an example of data collected from your IP by ip2location.com: ip2location demo
A chart to see how effective accuracy can be in different countries: see chart
Four Location-based marketing examples: read article from beaconstac.com