Location-based marketing becoming mainstream as advertisers use smartphones, digital billboards to reach consumers in any location; 50% of people in U.S. with GPS-enabled mobile device using location-based services: Microsoft

SAN FRANCISCO , June 1, 2011 (press release) – Whether it's via smartphones or digital billboards, advertisers are starting to take advantage of the myriad ways to reach consumers in any location

Quick facts

* Mobile couponing is a starting point for many brand owners wanting to capitalise on location in their marketing
* O2 Media's debut location-based You Are Here campaign to promote Starbucks' instant coffee product Via achieved a recall rate of 93%
* Museum of London's StreetMuseum app has been downloaded 200,000 times since its launch in May 2010
* The key to effective location marketing is to develop strategies that are relevant to the brand and add value
* Almost 50% of people in the US with a GPS-enabled mobile device are using location-based services, according to Microsoft

The right message at the right time in the right place has long been brand owners' holy grail. As technologies evolve, location-based marketing is moving into the mainstream, with advertisers increasingly demanding that location be integrated into campaigns to deliver just that. An array of location-based strategies have been developed to achieve a variety of goals, from generating footfall to gathering sales leads, building brand engagement or demonstrating product features.

"With consumers becoming more demanding of advertisers due to the sophistication of technology, the onus is on us to find ways to present ourselves in the most entertaining or relevant way," says Zandra Ives, head of advertising at Yell. "This means contextually relevant information through location-based activity."

Almost 50% of people in the US with a GPS-enabled mobile device are using location-based services, a recent Microsoft survey showed. "There's clearly room if not an expectation to deliver an engaging brand experience through real-time, location-specific marketing," says Philippa Cripps, senior account director at Rapier, which with production company Grand Visual developed a location initiative for Yell that ran earlier this year.

While mobile has emerged as a key medium for location marketing, digital out-of-home is also becoming more innovative. "The Yell campaign excited me because it combines location and destination with time of day, bringing all that data together in a way not seen before in the outdoor environment," says Grand Visual MD Neil Morris. "The ability to tap into the mood of people in different locations will be a rich area to explore."

The campaign offered audiences real-time, destination-specific information to promote Yell's local business directories. Running on screens at railway stations across the UK, it featured syndicated content from Yell.com tailored to the destination of the next departing train, plus a customer review of the featured business.

Getting potential buyers closer to the product was at the heart of Ford's recent use of outdoor advertising combined with augmented reality. According to Mark Simpson, marketing director at Ford of Britain, the brand is increasingly using environmental and out-of-home activity "to tell a deeper story and allow for one-on-one interaction" with consumers. Working with Grand Visual and agency Ogilvy & Mather, Ford used 3D depth-imaging technology to project virtual models of its C-Max model into the hands of passers-by, via interactive poster sites with built-in cameras. "The role of outdoor in the media mix is to raise awareness and drive people online to find out more about the product," adds Simpson. "We had more than 150,000 interactions from the C-Max AR campaign."

Phone deals
Location marketing has also reaped the benefits of developments in smartphone technology and new ad formats and channels. Gap US was the first brand to run a campaign using Compass, an app-within-an-ad format developed by JiWire, which runs across the company's Wi-Fi channels in the US. The campaign, promoting Gap's 1969 line, was built around a database of its US stores. When a user clicked on the ad on their mobile, an app on the landing page listed their three nearest stores. Clicking on a store would reveal directions to it and relevant offers. The result was engagement for over a minute on average.

"We've been exploring different ways to engage with our customer while they're on the go," says Gap US's senior director of media Chris Gayton. "Early response shows we're reaching our customers at the right time and in the right locations, and that they're interested in engaging with localised information."

Brand engagement and footfall were key objectives for Impulse, which earlier this month worked with cosmetics brand Barry M for an on-pack promotion supported by a location strategy to engage 16-24-year-olds. Themed around things every girl needs in her handbag, the pair put handbags at locations across the UK, then used Facebook and Barry M's mobile app to direct users to each location.

Offering incentives through geo-targeting discounts and location-tied coupons is increasingly popular. This was used effectively in a recent mobile, online and offline campaign for rail operator East Coast to persuade passengers with domestic flight tickets to take the train instead. Working with a local database owner, MPG Media Contacts' mobile division Mobext sent messages to travellers within a tightly defined geographical area, incentivising them to swap their tickets. The results exceeded the client's sales target by 50%.

Meanwhile, there's a growing number of high street businesses from House of Fraser, Debenhams and M&S to Starbucks and Pret a Manger using location-specific incentives distributed via mobile.

"Location marketing's appeal lies in the ability to talk to a customer in a particular mood and environment in effect, to choose what message to target at any particular point along the journey towards purchase," says O2 Media MD Shaun Gregory, who reports a significant uplift in client interest in location services in recent months. "To begin with, tactics were pretty one-dimensional: telling someone about a discount when they were near a store. Approaches over the past few months, however, have grown smarter and more sophisticated, and marketing communications are more intelligent as a result."

Close friends
This approach is starting to move from the experimental into the mainstream, agrees Matt Rhodes, client services director at Fresh Networks, which works with clients to make website content more geographically relevant. For the Motor Cycle Industry Association it built an online community to encourage more people to try motorbiking. The agency developed location-specific content detailing local dealers or other enthusiasts in a particular area, for example, to help achieve this.

Social networking service Whatser is using location to offer advertisers improved access to customers, taking the use of incentives to another level. It lets users share their favourite locations with friends and discover new ones. In April it launched a marketing platform allowing local brands to 'claim' a location and then communicate directly with users who added it to their favourites. Pushing special offers to these fans builds and rewards loyalty, tackling the problem of 'coupon chasers' likely to visit only once, the company claims.

"Mobile marketing has evolved beyond coupons," says Shubhankar Ray, brand director for denim brand G-Star Raw, the first to use Whatser's marketing platform. "We want to connect with our regular shoppers in a relevant way and keep them updated when new styles arrive and when we have special events in store."

With location-based promotions being driven by the popularity of group buying, consumers will increasingly look for differences, says O2 Media's Gregory, "So unique, compelling experiences will have to move centre-stage."

One example of a rich location-based experience is StreetMuseum, an app created by Brothers and Sisters to promote the Museum of London's new galleries. Its Roman-themed follow-up, StreetMuseum Londinium, goes live in late July. Like its predecessor, this will use augmented reality but with video recreating scenes from Roman London and overlaying them on modern streets when observed through a cameraphone. Users can also 'excavate' 80 Roman artefacts using their phones at locations where the actual artefact in the museum's collection was found. A Roman London soundscape has also been created, along with an interactive map of excavations viewable as a Google Maps overlay.

"Location has been an incredibly powerful and impactful tool for us," says Museum of London marketing manager Vicky Lee. "But this has been achieved by producing something totally in keeping with the museum. The power of location lies in its relevance."

case study: Hiscox reaches out to people on the move
Specialist insurer Hiscox recently tailored content for audiences according to where they were going, targeting people with an integrated campaign using Wi-Fi advertising and outdoor.

The strategy was built around location-based media company JiWire's Wi-Fi media channel. This works with BT Openzone to deliver advertising across 185,000 Wi-Fi hotspots across the UK, reaching a potential 5m users a month. "The idea was to use outdoor to create awareness then Wi-Fi advertising based around location to start a dialogue," says JiWire UK MD Peter Jones.

Hiscox's media planning/buying agency Crayon Ci mapped the location of the insurer's outdoor ads to JiWire's inventory. In this way customers logging onto public ?Wi-Fi in the vicinity of each poster would be shown relevant content correlating with that particular ad, encouraging them to apply for a Hiscox quote. Ads were also displayed on the Wi-Fi login page at the point of connection, ensuring Hiscox benefited from complete share of voice prior to the consumer starting their online session. Demographic targeting further refined the campaign using Wi-Fi user profiles and targeting by venue type.

"During the last year we've accelerated our online presence with targeted ad campaigns," says Hiscox marketing director Annabel Venner. "This campaign was innovative and bridged the gap between outdoor and digital planning to engage our audience effectively." The JiWire campaign generated click-through rates five times higher than Hiscox's average for online display. The creative performed twice as effectively as average finance sector campaigns on JiWire, the company claims.

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