Brands target by location to maximize user conversion
Westin drives customers to its warmweather resorts with in-app display ad
Marketers such as AT&T, American Express Corp. and Westin Hotels & Resorts are flocking to location-based initiatives, saying the precision of GPS-enabled mobile devices gives them a unique chance at conversion.
"Since consumers tend to frequent the same areas on a regular basis, location-based marketing has the potential to create persistent associations between brands and a consumer's daily habits," said Danielle Lee, VP of ad product innovation at AT&T Advanced Ad Solutions. "Results of prior location-based marketing campaigns suggest they are quite effective in driving visits to the point of sale even up to a week after messages are delivered to the consumer."
Last month, AT&T launched the ShopAlerts program, which allowed participating brands such as Kmart and JetBlue to deliver SMS or MMS messages to opted-in consumers near a participating location, such as a retail store or an airport terminal.
Location-based offers such as these are potent because they reach consumers when they are in a purchasing mindset and near the point of sale, said Lee.
While AT&T launched its own program to help marketers target consumers through text messages, other brands are partnering with established location-based services. American Express worked with Foursquare at last month's South by Southwest Interactive festival to give card members discounts when they checked in with participating merchants.
"The huge promise to this channel is for the average storefront or restaurant to be able to convert passersby to foot traffic, and foot traffic to sales," said Luke Gebb, VP of global network marketing at American Express.
Other brands are using location-based mobile applications to target consumers through in-app display ads. For instance, Westin Hotels & Resorts is targeting customers where they are, but driving them to places they are not, namely warm climates. The hospitality company began aiming display ads for its warm-weather resorts last month at consumers who access Weather.com's iPhone application in cold-weather locales.
Westin developed that campaign to capitalize on "those moments where the reality of winter is as apparent as it's going to be," said Michael Keaveny, associate media director at Razorfish, Westin's digital agency.
Keaveny also attributed the growing adoption of location-based marketing to the spiking penetration and advanced capabilities of smartphones. Four out of every five mobile devices bought in 2010 were smartphones, according to comScore. That growing acceptance is helping brands approach marketing's Holy Grail, according to Gebb.
"When you can give a location-based offer to the right person, then you've kind of completed that old marketing axiom: right person, right place, right time," he said.