One of the topics that's been hot like no other this past year is proximity-based marketing. That's why Firebrand has been diving this topic over the last few months, culminating in our Future of Location 2018 ebook. Given how so many companies are making major progress, chances are your own company is trying to figure out how not to fall behind. Want a primer? Here's what you probably don't know but need to know if you're going to take advantage of this stuff:
#1: Quality and accuracy of data are a huge problem
Many experts feel that quality and accuracy of data are going to be crucial in the near term future. "It really comes down to what are you trying to accomplish as a marketer and how important accuracy is to that," explains Steven Rosenblatt, President of Foursquare. Precision and accuracy are key to building audience profiles if you're trying to understand a consumer and who they are, and key if you're trying to target and reach a particular type of person. If, however, you're trying to geo-target a particular area, precision may be less important.
Ultimately, data accuracy is going to be under more scrutiny as more ad dollars move to social. In order for these methods to be effective, the data being by companies like Snapchat and Facebook must be reliable enough to target consumers effectively. The walled-garden nature of Facebook in particular has come under scrutiny, as they've recently had significant problems regarding the accuracy and efficacy of their advertising methods, with several big brands opting to reduce their ad spend on the site until more accurate metrics are released. Snap's Snap to Store and Snap Maps are still relatively new, so it remains to be seen how effective they are in comparison to Facebook's advertising tools.
#2: To continue digital ad growth, location is probably the next frontier
By many measures, 2017 is the year that digital ad spend is expected to exceed television ad spend, largely due to how measurable it is. Specifically, digital conversions can be measured far better than TV conversions. "Growth in digital has largely ignored the 91.5% of conversions that occur offline in the physical world," explains David Shim, CEO of location analytics leader Placed (acquired by Snap this year). Shim predicts that in the next two years, "measuring omnichannel ads to store visits will be as common as thirrd party ad serving on digital advertisements."
#3: Location-based marketing isn't just for retailers
Herradura, a tequila brand, teamed up with Foursquare to create a location campaign designed to raise awareness of the brand among drinkers of premium spirits. Foursquare took the list of places where Herradura is sold and used location data from mobile phones to target ads to people who had been at or near those stores in the past or were likely to buy premium alcohol.
Makers of alcohol don't enjoy the same direct relationship to the consumer that, say, brick and mortar retailers do; as a result, campaigns such as these that raise awareness are a crucial part of their marketing strategy. All in all, the Foursquare campaign led to a 23% lift in visits to stores that sold Herradura among people who were shown the ad compared to a control group. Because Brown-Forman, the company that owns Herradura, has no retail locations itself, it was unable to see how many people bought the tequila in responseto the ad; nevertheless, visits can be a strong proxy to sales.
Herradura's example shows that not having a brick and mortar retail location is no excuse for not using location data. Side note: I've put together a few other examples of strong case studies in that Future of Location 2018 ebook I mentioned earlier.
#4: Proximity technology is (probably) going to save retail
There's a perception by the market that digital is eating brick and mortar retail's lunch, and to some extent that's correct. Placed's Shim believes that this perception will change in the future, as retailers begin to better understand what drives offline store visits with the same detail they are able to measure and optimize against website visits.
#5: The industry is just scratching the surface
"We're still in the very early innings," offers Foursquare's Rosenblatt. "I wouldn't say nascent, but early."
Marketers have been evangelizing for years, but location is finally moving up the priority stack of importance. What you're seeing is that companies now understand that it's not just about proximity, it's not just about context; it's about consumer insights. Those marketers and companies that understand that will be way ahead of their competitors, and will truly get better at understanding how to market and advertise more effectively, as well as how to create experiences for their consumers more effectively -- and so we're moving up the adoption curve quickly.