Does it ever feel like your smartphone knows your every move? You might get this impression from location-based marketing, which blends digital advertising with people’s geographical locations, whether it’s a shopping mall, sports arena, or rock concert.

Brands use location-based marketing to track consumer habits in the real world. It also helps a brand track competitor’s advertising strategies. Wouldn’t it be nice to know how a competitor’s last big sale performed? Whether they’re attracting more foot traffic? With location-based marketing you can. 

Data Collection and Privacy

Smart devices like phones, tablets, smartwatches, and even cars are connected to the internet and track a user’s location. This data helps make certain apps work better, such as maps, weather apps, traffic alerts, ride shares, and delivery services. It’s also used by digital marketing teams to improve their customer outreach. 

Consumers can control how much of this data is collected from their smart devices. If a device is collecting location data, it’s because the user has decided to opt into location tracking. 

By law, smartphones must anonymize this data, which means it can’t be tracked back to a single person. These protections work in conjunction with state and federal regulations to protect users from privacy violations. 

The Lingo of Location-Based Marketing

Before we explore how location data helps match consumers to products and services, let’s brush up on some of the lingo around location-based marketing.

Geofencing 

Geofencing is a digital boundary around a specific location. Whenever someone enters this boundary, marketers can send advertising to their mobile device. 

Geofencing boundaries, for instance, can be drawn generally. Imagine a circle around a neighborhood so a café owner can measure potential foot traffic. Geofences can also be more specific, meaning it would only track the number of people who enter the coffee shop.

Geotargeting

Geotargeting uses a device’s location data to send digital ads about locations, products, or services people visit. All connected devices have a unique IP address that can be tracked down to a county, country, and ZIP code. Geotargeting uses IP addresses to build a consumer profile. 

For instance, if they visit a local gym, they might get ads for nutritional supplements or other fitness apps. 

Geo-conquesting

Location-based marketing can use geo-conquesting to draw a competitor’s customers to your business. A geo-conquest draws a boundary around a rival business. When consumers enter that boundary, they begin getting ads from another brand.

Remember our coffee shop? Geo-conquesting could involve drawing a boundary around a nearby Starbucks. When someone visits Starbucks, the other café owner can send them a coupon to try their place across the street. 

Proximity Marketing and Beaconing

Proximity marketing uses more precise location data. The terms “location-based” and “proximity” marketing are sometimes used interchangeably. 

Proximity marketing tactics often rely on beaconing to trigger advertising content. Beacons use Bluetooth or WIFI networks to send ads to all connected devices. For instance, a movie-goer triggers a beacon by entering the theater. They receive an email and a push notification encouraging them to sign up for the theater’s loyalty program. 

Benefits of Location-Based Marketing

When small businesses use location data, it helps build more targeted, effective advertising strategies. Advertising response rates from location-based marketing are five times higher than other forms of advertising. 

In fact, more than half of smart device users have push notifications turned on, with as many as 62% of users opt-in to location-based data. This means your target audience has already agreed to receive your ads and may already be familiar with your brand. Mobile marketing that uses physical location data results in further increased sales. Benefits include:

• A more target audience based on location and points of interest
• More in-person business
• More relevant advertising content
• Possibly, lower ad spending
• Competitor insights
• Campaigns that respond to real-time data

Now that we’ve covered how location-based marketing works and how it can benefit you, where do you start in getting a location-based campaign off the ground? 

Building Campaigns Based on Location Data

Use location-based software or capable platforms

Location-based marketing usually uses software or marketing platforms with location-based capabilities. Both Google and Facebook business platforms can track a consumer’s physical location to trigger advertising. As your needs grow, both platforms provide more advanced options. 

Blend Online and Offline Advertising Strategies 

Location-based marketing really soars when online and offline marketing come together. An offline interaction might be a movie, a concert, a game, or an interaction with a brand ambassador. Those experiences open the door for consumers to engage with digital content. 

A sports fan at a hockey game could start seeing food and drink ads in their social media feeds. A pizza place could send customers an ad for an online loyalty program. A mall shopper receives a push notification about an ongoing sale from their favorite clothing store. 

When people shop together, they receive the same ads. This reinforces peer-to-peer marketing, where friends promote products and services to other friends.

Increase In-Person Shopping

It bears repeating: Location-based marketing uses a consumer’s real-time location to generate ads. Content marketers design these ads for people to use the moment they appear.

Push notifications can produce immediate in-person traffic. Consumers receive push notifications based on their physical location, which encourages them to stop into the store. Time-limited promotions work especially well with this tactic.

Take Time and Follow the Data

Effective location-based advertising takes time to implement and analyze. Aside from the sales boost, having access to data about consumers who shop near your business can help drive all sorts of decisions. Which sales perform the best? What time of day do consumers shop in person? Which competitors do your consumers engage with the most?

Review the data you’re generating consistently. In doing so, you can continue to create ad content and sales experiences your consumers value most.