Location is one of the most powerful pointers of consumers purchase intent. By identifying customer’s behavioral patterns, retailers can easily recognize and reach their desired audiences who are in the market with personalized and relevant marketing messages. This helps the retailers to increase consumer engagement, and ultimately their consideration to purchase.
According to a research report from Berg Insight, Location based advertising (LBA) market is expected to hit nearly $15 Billion by 2018 (Source)
While the idea of location-based retail marketing might sound simple, i.e. find consumers, send them attractive offers and see if they show up at stores and finally purchase, in reality, it’s not that easy. Retailers need the right tools to successfully identify customers and more than that customers also need to have that urge to be found. So how do retailers pave the trail from offers to visits and the actions afterward? It’s through the Data Management Platforms (DMPs), let’s know how.
Location Based Targeting (LBT)
Before getting into the role of DMPs, lets first understand what LBT actually means. Currently, LBT is one of the most effective marketing tactics that is helping the retailers reach the right audience in the right place. The primary benefits of LBT is that it drives sales and helps in the relevant targeting of consumers.
It is being effectively used to:
- Tailor creative marketing messaging for different local languages
- Reach local consumers for retailers sitting in physical commercial locations
- Engage mobile users at the right time and right place
The craze for LBT has been increasing among the retailers from across the world. According to the second annual Global Location Trends Report released by LBMA (Location-Based Marketing Association), more than 50% of companies across countries like USA, Canada, Germany, Singapore and the UK, target their customers with the help of location-based data (Source). So why this craze? why it so effective?
Highly Personalized – By personalizing ads to consumers based on their location, retailers are increasing the chances of showing their consumers something that is much more relevant.
Timely – One of the greatest strength of LBT is that they are extremely timely. Since location data is served in real-time, there is this high opportunity for the retailers to target consumers at the most exact moments.
Targeted – Generic display ads are history today, with so much of data available to the retailers they are able to target their consumers better.
How Is LBT Benefitting Online And Offline Retail?
Location based targeting is totally transforming the face of retail, here are few of the benefits this marketing tactic is bringing in for the retailers:
- Accurate Market Research – Retailers can use location data to understand the where, how and when of their consumer’s buying habits. This helps them market smartly to these audiences which increases the chances for conversion.
- Identify Shopping Patterns – With techniques like Geolocation, retailers can assess when a customer stop visiting a particular store and diverts elsewhere, this gives them insights on the change in shopping pattern. With such insights, retailers can sway back their customers by altering their marketing strategy.
- Send Targeted Coupons/Incentives – One-to-one targeting plays an imperative role in marketing today, in LBT’s context it’s more about sending targeted coupons/incentives to a specific consumer at a specific location. Relevant coupons/incentives prove out to be very helpful in engaging shoppers in real time and drive them to the online or offline store to make a purchase.
- Locally Relevant Ad Campaigns – Retailers can nearly close the gap between brand engagement and product purchase by tracking nearby consumers through LBT and directing them to their nearest stores.
- Create Brand Awareness – Retailers can also use LBT for establishing brand awareness by targeting a place with extensive reach and using SMS or display units, with no CTAs (call to action).
Location Based Targeting Techniques
To successfully deliver personalized customer experiences, retailers would need to invest in a number of location-based targeting techniques. Let’s know the different techniques involved in LBT:
It is the use of data from social networks, smartphones, web searches and IP addresses to target advertisements and information to a consumer’s location. Common forms of geomarketing are:
- Geotargeting– Uses real-time location data provided by mobile providers. It empowers the retailers to display mobile ads to those customers who are most likely located in the vicinity of the stores.
- Geofencing – This tactic allows the retailers to target users within a predefined area based on their latitude and longitude data.
- Geo-Conquesting – A targeting strategy that enables the retailers to reach out to and engage those users who are physically in or around their competitors’ store.
- Hyper-Contextual Targeting
This technique uses data meaningfully to deliver an extraordinary experience to its target audiences. It uses hyper-local data to send relative messages which are more meaningful for its onlookers. This method is basically used to drive purchase intent.
- Place-Based Targeting
Place-based marketing involves advertising placed in a specific location, it basically uses a certain area/location during a specific timeframe for targeting. Since this form of targeting targets specific groups of people, the campaigns run to target them are also extremely specialized.
Also known as “Proximity Beacons” these are devices placed in physical locations that transmit targeted messages and information to nearby mobile devices. The sole purpose of Beacons is to detect the consumers, or more specifically, their devices, as they move into the retailers set range.
The Data Dilemma
Data gaps have frequently dogged location based campaigns. 22% of marketers attached in-store attribution as the prime marketing challenge (Source). Retailers struggle to comprehensively connect the dots from online to offline to eventually get a picture of the sales lift powered by their marketing outlays. How do they overcome this data dilemma?
DMP collects, analyses and processes data from Geofences, Beacons, and Web all over one single platform and enables the users to create customer-centric experiences. DMPs can effectually connect to other location data providers who offer geo-targeting abilities beyond zip code or general criterions. Here is how it works:
- Data Onboarding – Collect, cleanse and standardize data sets from numerous sources, including CRM, Proof of Identity (POI), mobile device, and specialty data sets to generate normalized profiles.
- Data Normalization & Enrichment – DMP organizes various data sets into a common format to improve its value and quality. It involves de-duping, cleansing and standardizing data sets, together with probabilistic ID matching and patented deterministic for easy association of other data sets to create enriched user profiles.
- Audience Segments – Now it builds consumer profiles based on behavioral location rules and other behavioral device data. DMPs ensure all correlated events and attributes are fused into one single profile, hence eliminating duplicate profiles.
- Deliver Media – Retailers can now use deep insights to deliver highly targeted campaigns which are more strategic and information driven.
With the right blend of certifiable audience segments, precision geo-targeting with access to a massive Proof of Identity (POI) database, dynamic rich media creative, top-tier inventory, and a strong platform with algorithms to augment campaigns, DMPs delivers efficient media buys with high performing results. Retailers can now engage with verifiable audience segments via highly accurate location-aware ad campaigns and also measure the real-world impact of these campaigns.
It sounds like something from the future, but location based targeting is already here and is growing in popularity. Retailers around the globe have already started to make a significant mark by leveraging it, have you? The future of LBT looks really bright and retailers are looking to increase its usage in the years to come. Let Cuberoot help you make most of it.