Geofencing, Geotargeting, RFID, and Beacon Marketing 101
Technology is radically reshaping our world, and there is perhaps nowhere that is truer than in marketing. While we love to romanticize the creative process in shows like Mad Men, modern marketing relies as much on smart devices and algorithms as it does on psychology and natural talent. And if your business wants to remain relevant, now is the time to adopt these new approaches.
Of course, taking on too many new technologies at once can be overwhelming and result in an ineffective marketing campaign. If you are looking for a starting point, we suggest location-based marketing.
What Is Location-Based Marketing?
In a way, marketing has always been based on location. For example, a restaurant in Chicago would purchase radio ads on stations in the greater Chicago area—not Los Angeles. But that is not what location-based marketing is in 2018.
So, what is it? It is a broad term that refers to multiple digital marketing technologies allowing marketers to target mobile users who are physically present within a certain area. This area can be massive—perhaps an entire tri-state area—or as small as a single store. Through this technology, businesses are able to market to those individuals most likely to make a purchase from them based on physical proximity.
Comparing Location-Based Marketing to Other Methods
If you use online advertising, you might figure that you already use location-based marketing. Taking Facebook advertising as an example, when you create an advertisement on the platform, you are asked to define the geographic location of those you are marketing to. However, this isn’t a perfect science. Sometimes users will enter a different city than the one they live in or fail to change it when they move. Facebook may target those who only visited your city, but in reality, they live across the country. Location-based marketing uses the real-time or most recent location of the audience being targeted, making it much more exact.
What Are Your Options for Location-Based Marketing?
Location-based marketing is a broad term that includes multiple types of marketing technologies. While there are always new options on the market or in development, there are four key technologies that are currently in play: geofencing, geotargeting, RFID, and beacon.
Geofencing in marketing is a technology that establishes virtual fences, sectioning off a specific geographic location. The company using the technology is given incredible control over the placement of the fence, with the ability to define the area on a block-by-block basis. As such, local businesses can use their knowledge of travel patterns, foot traffic, and more to get the most out of their use of geofencing.
With geofencing, marketers can target people who enter the fence, exit the fence, or restrict it to those who spend a certain amount of time within the fence, showing them ads as they browse the web or use ad-enabled apps, often through Google Adwords. This technology does not rely on the last known location of the user. Instead, it is based on their real-time location, using either GPS or IP address to determine the location of the individual.
Geotargeting in marketing can be thought of as a more exact type of geofencing. With geofencing, ads target users strictly based on their relation to the virtual fence. Geotargeting goes beyond location and takes demographics, behaviors, interests, and more into consideration. Because it is pickier about who is being targeted, it is often suggested that the fence be made bigger for geotargeting.
As it is more exact, smaller businesses without a marketing department may struggle to use it effectively. The more you know about the customers you want to target, the easier it will be to implement geotargeting. As such, it is best to work with an advertising agency when using geotargeting technology.
Beacon marketing technology has perhaps the smallest reach on this list. With this form of marketing, you place small, low-energy devices in your store that use Bluetooth technology—the beacons. These beacons detect the presence of a smart device and then trigger push notifications to the devices they see. This technology is cost effective and easy to use, but it does rely heavily on proximity and devices can only be detected if their Bluetooth function is on. Additionally, the push notifications are generally app dependent, so the user must have a specific app downloaded.
However, its precision is noteworthy. It may not encourage those outside the store to enter it, but it can encourage those already inside to make a purchase. For example, you could have a beacon near a key display, and as shoppers come close, it could inform them of a special discount. Out of all the location-based technologies, this is likely the easiest for most small businesses to implement on their own.
Who Can Benefit From These Marketing Strategies?
Location-based marketing is thought of as something of an equalizer between small businesses and massive conglomerates. While larger companies have long had the ability to reach their audiences through massive and nuanced campaigns, smaller companies have been left behind. Through location-based digital marketing services, small businesses stand on equal footing, and might even have an advantage over their larger competitors depending on where they are located. As such, while any business with a physical location can benefit from these technologies, small and mid-sized businesses have the most to gain.
Are They Right for You?
Just because a technology has been proven effective does not mean it is right for your business. Before making the decision to utilize location-based marketing, you need to weigh the benefits against the risks. To help, we will outline the pros and cons of location-based marketing below.
Pros of Location-Based Marketing
- Your business can communicate with potential customers in real time
- Staff can be alerted to customers heading towards the store
- Sharing information about your business is easier for customers
- You can receive quick feedback, making it easier to address issues
- Using these technologies requires the use of various mobile networks, increasing your online presence
- Customers can enjoy rewards for being loyal to your business
- It bypasses older technologies, such as email lists, that many users now find annoying
- Your company can gather significant amounts of data about customers for tailored marketing approaches
- Advertisements can be made as relevant as possible to the customer, even down to the products they are walking towards
- Depending on the chosen technology, it can be easy to try out on your own
Cons of Location-Based Marketing
- Not all of the technologies are easy to master, and even those that are easier require a certain amount of technological know-how
- It is easy to embrace the technology because it is “cool” without first integrating it into the overall marketing strategy
- They rely on either having the potential customer browsing things online or in apps to receive ads, or having specific apps downloaded to receive push notifications
- Some customers may find them invasive, especially those who are privacy-minded—though in theory, those who are will have location sharing disabled and Bluetooth off
- If most of your business is online rather than in person, it may not deliver significant results
- Customers might find a way to abuse features, such as accumulating points through check-ins without physically entering the building
Tips for Best Practices
As with any marketing strategy, it is possible to get location-based marketing very, very wrong. When implementing it, you should take care to stick to best practices. But what are these? Let’s take a look at a few.
- Think about where your customers already are just as much as you would about where you want them to be. You want to keep loyal customers even as you expand your client base.
- If you are primarily or exclusively an online retailer, target larger areas. You might even want to target multiple large metropolitan areas across the country.
- Are you able to ship internationally? Location-based marketing is effective in international markets as well—sometimes even more so than in the United States.
- Do not just think about the areas you want to include; also consider which areas you want to exclude. The tighter your control over your audience, the easier it is to tailor your message.
- Never rely on location alone. You need to truly understand your customers, and that means gathering data, creating profile, and making a strategy.
- Use the name of your location in your ads and push notifications. Customers see many ads during the day, and this helps them realize right away that yours are relevant.
- Do not forget to use keywords in your ads and push notifications. Even if this marketing method is less keyword reliant, customers will use them to determine relevance.
So, is location-based marketing something your business should consider? If you are interested in finding out, schedule a consultation with StratGrow, a Tucson digital marketing company. Our strategic marketing experts will be able to determine if location-based marketing would benefit your business, as well as craft a comprehensive marketing plan incorporating it. Allow us to be your Tucson advertising agency.