Location-Based Marketing 1--Basics

It seems to me that location-based marketing happened during the summer while I was taking time off from blogging. That’s not quite true, but it suggests how fast this phenomenon has taken hold.

When I first heard about Foursquare (from my students of course!) my first reaction was, “Why do I want anyone to know where I am at a given moment??” My second was that I’m not a twenty- or thirty-something out on the town on Friday evening! I got that. It took me awhile to realize that this was potentially a better option than the mobile couponing campaigns I had been writing about (for example, Ford local campaign; mobile trends). Foursquare and the others provide platforms that provide functionality and reach users.

Foursquare and Gowalla are the two largest location platforms. At the risk of oversimplifying, Foursquare looks to be very attractive to retailers who want to run a specific promotion. Gowalla seems to be attracting venues that want something long-term as suggested by Disney’s recent deal with Gowalla. There are many other smaller and/or more specialized platforms. This short slideshow identifies them and does a good job of explaining their similarities and differences. This space got a big boost in August when Facebook introduced its Places application, making it easy for marketers to tap into the huge Facebook population.

10 Lesser Known Social Platforms and How Businesses Can Use Them

View more presentations from Erica Swallow.

The importance of location-based marketing is emphasized by Chief Marketer:

• 37% of customers who searched for a local business in ’09 ended up visiting the store in person (TMP & comScore, October 2009) • Local search currently represents half of all mobile search ad revenue (Kelsey Group, September 2009) • Younger generations embrace mobile in staggering numbers; 97 million 5-29 year-olds in the U.S., 281 million in India and 255 million in China currently have mobile accounts (The Mobile Youth Report, 2010)

They emphasize the ties between search and location-based marketing: “Search teams should be sure to capitalize on these online-to-offline strategies to capture local visibility and in-store traffic.”

Leading-edge marketers are already onboard. Sports Authority has conducted several promotions on Foursquare, including one on Black Friday, and says, "We like the ROI on the things we've been doing on Foursquare." CNN describes some of the other Black Friday action.

My favorite for sheer marketing creativity is KLM’s recent foray, which is “spreading happiness.” When a passenger checks in on Foursquare, the KLM marketing team uses other social networks to find out about the passenger’s “likes” and about her trip. They use that data to provide a surprise to the passenger and take a photo of the surprised traveler.

The KLM team has surprised travellers with champage, notebooks, a watch, and traditional Dutch foods. One passenger, Willem van Hommel, was going to miss one of his soccer team’s most important matches of the year due to his trip to New York. KLM surprised him with a Lonely Planet guide to New York with all the best soccer bars in the city marked out for him. Another traveller, Tobias Hootsen, was surprised with a package to remind him of home during his long stay abroad.

I checked out the KLM Facebook page. The wall page had the usual flight complaints with speedy responses from KLM. One “surprised” passenger wanted to get a copy of the picture taken in the airport. Actually, it’s right there. There’s a link to the photo album on the wall page and it’s what you get when you click through on “what happened” on the promo announcement. As you might guess, the promo is also big on the I Love KLM page with another link to the photo album. Good follow up and I suspect they are integrating it with other media like Twitter. The downside is suggested by an article that uses the word “spies” in the headline, which is actually quite favorable when you read it. I didn’t see any privacy complaints on the KLM site. Wonder if that’s partially due to the fact that KLM already had an app that allows passengers to make a luggage tag with their picture on it? In any event, it’s a cool app and taken together, it signifies a company that’s deeply involved in location-based marketing.

Mashable has a good post with 9 steps for the marketer who is new to location-based marketing. A lot of the steps are not new to regular readers of this blog. Setting clear marketing objectives and monitoring are critical, for example. One that is especially important is 4 Customize. Each of the platforms offers different opportunities to engage visitors like the badges that can be earned on Foursquare. The marketer must understand the options.

There are other examples and strategy approaches. I’ll write about those in a few days when Cyber Monday calms down and we see what’s happened during these hectic shopping days!