Location based advertising
Encyclopedia
Location-based advertising is a new form of advertising that integrates mobile advertising with different mobile technologies. LBA uses different types of tracking which is beyond the scope of this article. The technology is used to pinpoint consumers location and provide location-specific advertisements on their mobile devices. As Bruner and Kumar (2007) stated, “LBA refers to marketer-controlled information specially tailored for the place where users access an advertising medium” (p. 2). Location based technology has tremendous potential to outbeat other types of advertising as the mode of delivering the advertisements is a mobile device which is ubiquituous.
s in general, i.e. push and pull.
The push approach is a more versatile approach and is divided into two types. A not requested service(opt-out) is the more common approach amongst the two approaches as this allows advertisers to target users until the users do not want the ads to be sent to them. But the opt-in approach refers to a contrasting paradigm. In this the users can determine what type of advertisements or promotional material they can receive from the advertisers. The advertisers have to abide by certain legal regulations set in place and respect users choices.
In contrast, the LBA pull approach, users can directly search for information by entering certain key words. The users look for specific information and not the other way around. For example, a traveler visiting New York could use a local search application such as WHERE
on her device to find the nearest local Chinese restaurant in Manhattan. After she selects one of the restaurants, a map is provided as well as an offer of a free appetizer good for the next hour. (Steiniger, Neun, and Edwards, 2006, p. 5)
Location-based advertising is closely related to mobile advertising, which is divided into three types:
For pull-based LBA, users interact with local, typically mobile sites or applications and are presented offers in a standard pull advertising model. Location-based advertising companies like go2 Media
aggregate local listings from yellow page companies, local directories, group discount businesses and others. Users are presented these ads as display advertising integrated with publisher content or search advertising in response to user queries.
In addition to directly opting in, users may see location-based display ads served from a location-based ad aggregator/network such as NAVTEQ or AdLocal by Cirius Technologies.
Secondly, since LBA gives consumers control on what, when, where, and how customers receive ads, it provides customers more relevant information, personalized message, and targeted offer. As Vidaille (2007) stated, “With a targeted message, we’ve reached about 20 percent response rate. That’s incredibly good”, (Cited in Girgenti, 2007). Although the internet can do similar things, such as, sending new information about products, promotional coupons, or asking consumers’ opinion, but few people respond to e-mail marketing because it’s not personal anymore. In contrast, LBA gives consumers relevant information rather than spam, therefore, it increases the chances of getting higher responses.
More importantly, unlike other traditional media, LBA is not only used principally for advertising, but also doubled as a means of researching consumers. “Consumers are constantly providing information on their behavior through mobile internet activity” (Ferris, 2007, p. 33). With location-based service, surveys can take place in the real world, in real time, rather than in halls, focus group facility, or on PC. Mobile survey can be integrated with a marketing campaign; the results of customer satisfaction research can be used iteratively to guide the next campaign. For example, a restaurant that is experiencing increased competition in its area, is able to use the specific database – a collection of small mobile surveys of those customers that had used coupons from the LBA in the geographic area - to determined their dining preferences, times, and occasions. Marketers can also use the customers’ past consumption patterns to forecast future patterns and send special dining offers, such as Mother’s Day specials and Thai food fare deals, to the target population at the right place and right time, in order to build interest, response, and interaction to the restaurant.
Another major concern for LBA is spam; consumers can easily perceive LBA as spam if done inappropriately. According to Fuller (2005), spam is defined as “Any unsolicited marketing message sent via electronic mail or to a mobile phone” (para.5). In short, spam is an unwanted message that is delivered to the user even though user has not requested for it. Since customer is in control and all activities are voluntary, customers’ objective, goals, and emotions must be taken into account. A recent survey showed that users spend only 8 to 10 seconds on mobile advertisement (Cited in Fierce, 2007, para. 2). Therefore, the interaction must be straightforward and simple. Marketers must also develop relevant and engaging advertising content that mobile users want to access at the right place and right time. More importantly, marketers must make sure that their offer contains real value for the customer and follow strict opt-in policies. To conclude, the best way for marketers to distance from spam is to give consumers choice, control, and confidentiality while insuring that they only received relevant information.
Types of LBA approaches
There are two types of location-based serviceLocation-based service
A Location-Based Service is an information or entertainment service, accessible with mobile devices through the mobile network and utilizing the ability to make use of the geographical position of the mobile device....
s in general, i.e. push and pull.
The push approach is a more versatile approach and is divided into two types. A not requested service(opt-out) is the more common approach amongst the two approaches as this allows advertisers to target users until the users do not want the ads to be sent to them. But the opt-in approach refers to a contrasting paradigm. In this the users can determine what type of advertisements or promotional material they can receive from the advertisers. The advertisers have to abide by certain legal regulations set in place and respect users choices.
In contrast, the LBA pull approach, users can directly search for information by entering certain key words. The users look for specific information and not the other way around. For example, a traveler visiting New York could use a local search application such as WHERE
Where.com
Where, Inc. is a location-based media company in North America. Their main product is the WHERE consumer application, with over 3 million active users. It helps users discover, save and share local places by putting high quality local information at users’ fingertips and integrating promotional and...
on her device to find the nearest local Chinese restaurant in Manhattan. After she selects one of the restaurants, a map is provided as well as an offer of a free appetizer good for the next hour. (Steiniger, Neun, and Edwards, 2006, p. 5)
Location-based advertising is closely related to mobile advertising, which is divided into three types:
- Messaging
- Display
- Search
How does LBA work?
For pushed-based LBA, users must opt-into the company’s LBA program; this would most likely be done via the seller's website or at the store. Then users would be requested to provide their personal information, such as mobile phone number, first name, and other related information. After the data are all submitted, the company would then send a text message requesting users to confirm back the LBA subscription. Once these steps have been completed, the company can now use location based technology to provide their customers with geographically based offers and incentives.For pull-based LBA, users interact with local, typically mobile sites or applications and are presented offers in a standard pull advertising model. Location-based advertising companies like go2 Media
Go2
go2 Media is a mobile media company based in Boston, Massachusetts. go2 Media operates go2.com, a mobile entertainment guide that provides users with movie times, concert information, tv listings, local event listings and entertainment recommendations from the go2 national network of local editors...
aggregate local listings from yellow page companies, local directories, group discount businesses and others. Users are presented these ads as display advertising integrated with publisher content or search advertising in response to user queries.
In addition to directly opting in, users may see location-based display ads served from a location-based ad aggregator/network such as NAVTEQ or AdLocal by Cirius Technologies.
The potentials of LBA: Reach, Relevance, and Results
First and foremost, LBA is today’s most personal and direct marketing channel that allows marketers to reach a specific target audience; marketers can create campaigns aimed at more specific age, gender, income, and lifestyle segments. As Bruner & Kumar (2007) stated that LBA enhances the ability to reach people in a much more targeted manner than was possible in the past (p. 2). For example, if a customer has purchased the previous Harry Potter movie from a DVD / CD rental store and subscribed for the store’s LBA program, he can expect to receive an e-mail to his mobile phone that informs him about the released date of the next Harry Potter movie, including the movie sample, as he is on the train going back home (And the customer probably has a chance to stop off at the DVD / CD store before getting there).Secondly, since LBA gives consumers control on what, when, where, and how customers receive ads, it provides customers more relevant information, personalized message, and targeted offer. As Vidaille (2007) stated, “With a targeted message, we’ve reached about 20 percent response rate. That’s incredibly good”, (Cited in Girgenti, 2007). Although the internet can do similar things, such as, sending new information about products, promotional coupons, or asking consumers’ opinion, but few people respond to e-mail marketing because it’s not personal anymore. In contrast, LBA gives consumers relevant information rather than spam, therefore, it increases the chances of getting higher responses.
More importantly, unlike other traditional media, LBA is not only used principally for advertising, but also doubled as a means of researching consumers. “Consumers are constantly providing information on their behavior through mobile internet activity” (Ferris, 2007, p. 33). With location-based service, surveys can take place in the real world, in real time, rather than in halls, focus group facility, or on PC. Mobile survey can be integrated with a marketing campaign; the results of customer satisfaction research can be used iteratively to guide the next campaign. For example, a restaurant that is experiencing increased competition in its area, is able to use the specific database – a collection of small mobile surveys of those customers that had used coupons from the LBA in the geographic area - to determined their dining preferences, times, and occasions. Marketers can also use the customers’ past consumption patterns to forecast future patterns and send special dining offers, such as Mother’s Day specials and Thai food fare deals, to the target population at the right place and right time, in order to build interest, response, and interaction to the restaurant.
The limitations of LBA: Privacy and Perception of Spam
The mobile phone is an incredibly personal tool. However, as Darling (2007) pointed out, “The fact that mobile device is so personal can be both a strength and a weakness” (para. 14). On one hand, marketers can entertain, inform, build brand awareness, create loyalty, and drive purchase decision among their target consumers through LBA. On the other hand, consumer's privacy is still a concern (Halper, 2007, p. 2). Therefore, the establishment of a well thought out consumer privacy and preference management policy is critical to the long-term success of LBA. Marketers should inform their consumers on how their information is to be stored, secured, and used or combined with other purposes of marketing. If LBA can assist people in their everyday life, they will be more than happy to reveal their current location. To conclude, in order to ensure continue success and long-term longevity of LBA, consumer trust must be established and maintained. LBA needs to be permission based and marketers must take great strides in protecting the privacy and respect in the preferences of each and every consumer. In a recent publication in International Journal of Mobile Marketing, Banerjee and Dholakia (2008) find that the response to LBA depends not only on the type of location but also the kind of activity the individual is engaged in. They are more likely to prefer LBA in public places and during leisure times.Another major concern for LBA is spam; consumers can easily perceive LBA as spam if done inappropriately. According to Fuller (2005), spam is defined as “Any unsolicited marketing message sent via electronic mail or to a mobile phone” (para.5). In short, spam is an unwanted message that is delivered to the user even though user has not requested for it. Since customer is in control and all activities are voluntary, customers’ objective, goals, and emotions must be taken into account. A recent survey showed that users spend only 8 to 10 seconds on mobile advertisement (Cited in Fierce, 2007, para. 2). Therefore, the interaction must be straightforward and simple. Marketers must also develop relevant and engaging advertising content that mobile users want to access at the right place and right time. More importantly, marketers must make sure that their offer contains real value for the customer and follow strict opt-in policies. To conclude, the best way for marketers to distance from spam is to give consumers choice, control, and confidentiality while insuring that they only received relevant information.
Conclusion
In conclusion, there are three main potentials of LBA; reach, relevant, and result. Firstly, LBA provides marketers fantastic reach, as people almost always have their mobile phone with them. Secondly, since LBA gives customers control on how they receive ads, customers receive more relevant information, personalized message, and targeted offer. Lastly, LBA is an extremely accountable medium; it helps marketers to gain better understanding of their customers with real-time market research, which results in higher advertising impact and greater customer satisfaction. However, the fact that LBA is so personal can be both strength and weakness. Many consumers are still concerned about LBA invasion of privacy and risk of being monitored. Therefore, in order to ensure continue success and long-term longevity of LBA, consumer trust must be established and maintained. The best way for marketers to exploit the opportunities is to give consumers choice, control, and confidentiality while ensuring that they only received relevant information. To sum up, LBA is a marketer’s dream. If done right, it will be incredibly successful. However, if abused, it could turn a lot of people off very quickly. Thus, for LBA to be successful it needs to be permission based, relevant, and timely.External links
- Mobile Marketing Association (MMA) http://mmaglobal.com/
- Mobile Advertising Guidelines http://www.iabmexico.com/downLoads/mobileadvertising.pdf
- Scansave, LLC in-store target marketing and promotion optimization http://www.scansave.com
- MinutesNotice location-based advertising network for local businesses http://www.minutesnotice.com
- Lat49 offers location-based on map advertising within 4 verticals - Local, Sports & Rec, Travel, and Real Estate http://lat49.com
- The BipBip System -First ever 100% consumer controlled INFO system w. build-in Wishlist + based advertising network for local businesses http://www.bipbip.com