Location data can help retailers understand where a message may be relevant, but it does not replace a clear offer or customer research. Its value depends on signal quality, permission, context and whether the campaign links exposure to a meaningful outcome.
Hence, advertising techniques need to be more innovative to encourage customers to engage with them. Location-based advertising provides such opportunities, and this is precisely why it has significantly increased in the past few years.
How location-based advertising mostly works is that it measures an ad’s effectiveness through foot traffic using location-specific social apps and provides data insights through actions at these locations. In simpler terms, it uses location data to result in offline consumer conversions.
The demand for location data
By this year, the number of connected devices is expected to grow to 20.4 billion, making location data much easier to acquire. Using location data has allowed advertisers to develop multipoint strategies. Location data has provided advertisers with an abundance of information that gives them valuable information on where their target audience spends the most time and how it interacts with the brand, both online and offline.
Location information makes several forms of marketing tactics possible, from geotargeting to geofencing. Additionally, it provides insight into the different stages of a consumer’s purchase journey.
To understand why location data is relevant to advertisers today, it’s essential first to know how this data is used. Various channels, such as social media platforms, browsers, apps, and search engines, accumulate data to deliver paid and organic content relevant to a target audience based on their locations.
While collecting location data isn’t new, the way it’s being utilized today is. This form of data provides valuable insights into how consumers are behaving, thereby resulting in better targeting.
Location data helps identify the different location experiences that are valuable to a particular consumer. Hence, these experiences are similarly valuable to the marketer.
For instance, if a customer visits the convenience store, this location data isn’t as relevant to an advertiser. However, if the same consumer visits a sports store, then this location data provides relevant insights that can help fill the consumer’s profile gaps.
Industry segments
Service providers or retailers that are heavily dependent on their physical presence are ideal candidates for location-based marketing. These local business advertisers can use geo targeting campaigns to target a broad audience based on their visits, instead of just through digital engagements.
Hence, businesses can utilize location-based targeting to generate traffic to their store locations. It is also used by advertisers who want to attract traffic to their apps or websites. These entities include direct-to-consumer brands, e-commerce providers, and other various service providers.
Similarly, businesses belonging to niche industries, such as transportation, real estate, and education, can benefit from location-based marketing simply due to the formats of their businesses.
By analyzing location data and understanding the time investment and level of intent of their target audience based on how they act at these locations, advertisers in these niche industries can visually picture the customers most likely to make a purchase.
Hence, location data is becoming increasingly relevant to understand why a consumer acts the way they do. It helps businesses understand who’s a qualified lead and who isn’t, thereby leading to better investment efforts.
Besides delivering more targeted ads, location intelligence can be used to fill the gap between offline and online purchasing actions. For businesses that operate at physical locations, such real-time location data can help provide a better understanding of the consumer journey by highlighting the exact steps and the overall connection between a transaction made in-person and an online touchpoint.
Conclusion
Location data can create value for marketers and customers when the use is proportionate and expected. Privacy protection, data minimisation and transparent consent are prerequisites. Even then, segmentation and attribution remain estimates that should be tested against other evidence.
Location data is not exact ground truth
Location signals differ in precision and can be delayed, shared or wrongly attributed. Marketers should document the source, expected accuracy and permitted purpose before drawing conclusions about a visit. Aggregation and consent controls matter, and a device observed near a venue should not automatically be counted as a customer or sale.
