Global Positioning System (GPS) technology has been a marketing staple for some time now. Consequently, you might be wondering if it’s still worth exploring location-based strategies, or if the use of this tracking tech has plateaued.
In this article, we’ll take a look at the current status of GPS technology in the marketing arena. We’ll also highlight some potential uses, and discuss how consumers feel these days about sharing personal location data. Let’s jump right in!
The Current State of Location-Based Marketing
GPS has been around since the 1970s, although it only became fully operational in the 1990s. Despite its age, however, location data continues to be an effective tool for marketers.
Marketers surveyed about the use of GPS technology in their campaign strategies had a lot to say, including:
- Out of those surveyed, 8 in 10 marketers said they use location data in their campaigns.
- Almost 9 in 10 marketers reported that location-based advertising and marketing resulted in higher sales.
- Growth in their customer base was another common impact, with 86% of marketers saying it was a result of location-based marketing.
- Another 84% responded that customer engagement was also higher when using this technique.
Perhaps one of the great things about GPS technology is the opportunities it affords for partnering with other technologies. For example, machine learning and Artificial Intelligence (AI) can enhance and extend the power of GPS (as we’ll discuss in more detail later on).
How Consumer Beliefs Impact Location-Based Marketing Strategies
As useful as location-based technology is, consumers have had a love-hate relationship with it over the years. Some have become more suspicious of sharing their location data, especially after feeling the sting of recent data breaches with big companies like Facebook.
Consumers, however, seem to be easily swayed by certain types of offers in exchange for their location data. In fact, research shows that consumers are more comfortable with sharing data when they are receiving rewards, coupons, products or discounts in return. Location-based information remains tricky, however, as most consumers still feel that being asked to share their location is too intrusive.
On the flip side, younger generations prefer highly-personalized marketing and consumer experiences. These often require the incorporation of location data. A divide seems to exist when it comes to millennials specifically. They are okay with sharing data in order to gain personal experiences, but they have high expectations about how businesses will protect their data.
3 Uses of GPS Technology for Marketers
Even with the valid consumer concerns, GPS technology in marketing is not dead or even on the decline. There are plenty of new strategies on the rise that might be useful to your business.
1. Smart Devices Can Be Used in Location-Based Marketing Campaigns
It’s no secret that smartphones were a boon for the use of GPS in marketing. Mobile devices provide an ‘always on’ option, with a nearly constant availability of location data for marketers.
Smart devices, including voice-activated smart speakers and other home-based devices, have now opened up new opportunities for marketers who favor location-based techniques. In fact, 45% of marketers are already leveraging voice-control and connected smart devices in combination with GPS options.
One potential use of these technologies is something that should make parents happy as well. Combining home-based smart devices with the power and capability available on phones and in some vehicles, parents can choose from a variety of safety-minded applications to keep track of their teenagers’ driving habits and locations.
2. Automotive Industries Partner With GPS Technology to Create New Advertising Opportunities
The automotive industry is another area where being connected has become the standard. As it stands, by 2020 90% of automobiles will be connected to the Internet. This offers a lot of potential for marketers in a few different ways.
Let’s take a look at two ways the automotive industry can make use of location-based technology:
- Drive auto sales at dealerships. Researchers know that higher footfall traffic to a dealership correlates with more sales. In turn, using location-based audience segmentation can be beneficial for automotive dealers by driving that footfall traffic.
- Deliver in-car advertisements. Companies are moving towards providing in-car advertising through newer, more connected vehicles using location-based technology. This is much like how a fast food chain might deliver in-app advertisements to you when you are near one of its stores.
We have already seen some examples of this concept in use. If you use Spotify or Waze, for instance, you’ve likely been offered advertisements or incentives for an establishment while sitting at a red light next to that very same business:
On Waze, for example, this option starts at just a $2 per day ad-spend for basic options and 1 to 10 locations. It’s a powerful combination of location-based advertising and GPS technology. You can even see the direct impact of your ad placements, via metrics that tell you how many Waze users clicked on navigation options to visit your business after a particular ad was displayed.
3. Geo-Fencing Brings Ad Targeting Capability to the Household Level
Geo-fencing is not necessarily a new technique, as businesses have been using the concept to draw traffic to their physical stores for a while. As we saw in the previous section, store-specific apps can also employ this approach.
Starbucks is a good example of this concept in action as well. If you’ve downloaded the coffee chain’s mobile app, you’ve likely opted into sharing your location data. This means you probably can’t pass a Starbucks and its geofence without receiving a notification about today’s special or a specific discount.
However, the ability to target advertising by household IP address or a home’s Internet of Things (IoT) devices is an up-and-coming opportunity. This option has been compared to the Facebook Custom Audience feature, but at scale and applied to physical households.
Geo-fencing at the household level combines property line information with GPS technology, to achieve a targeting precision rate of 90%. When combined with Customer Relationship Management (CRM) data, geo-fencing becomes a pretty powerful tool. For example, direct mail, while it might seem antiquated in comparison, can create highly-personal and targeted campaigns when paired with geo-fencing.
The consensus among businesses and marketers is that location-based strategies are not going away anytime soon. In fact, the options continue to grow as more and more devices are connected to the internet. However, keep in mind that a winning strategy should include the explicit plans your company will take to protect consumer data. This can go a long way towards gaining trust, confidence, and loyalty.
Are you gearing up to try one of these GPS-supported approaches to marketing? Share your favorites with us in the comments section below!
Image credit: Jamie Street