Location, Location, Location
Given a choice between privacy and Angry Birds, consumer demur.
Was ever a more magical marketing tool bestowed upon direct marketers than the smartphone? Here is, essentially, a tracking device that some 60% of the U.S. population willingly—no, enthusiastically—keeps pressed close to or situated near their bodies at all times. More people will leave behind their spouses, their jobs, their homes, and their family dogs this year than will part with their cell phones. They're able to be singly identified by their phone numbers and reached by any manner of media a marketer can imagine: email, video, instant messaging, apps. They can be followed and served with, say, a BOGO for an ice cream cone while passing a Baskin-Robbins on a 100-degree July day.
That geo-location thing, truth be told, does get a little touchy. A human being's instinct is to shake a tail. Some 85% of consumers polled told TRUSTe that they want to have distinct choices about being tracked by marketers, the government, or their employers. That's led privacy activists and, last week, the Federal Trade Commission to call for do-not-track mechanisms allowing consumers to switch off geo-location at any given time.
A concerned citizenry, however, has never been something to keep a direct marketer down. Especially a citizenry that appears to love the value of mobile connectivity nearly as much as it does its privacy. “Consumers are getting more comfortable sharing their locations, and that's creating a larger pool of consumers for marketers to reach through geo-location,” says Tom MacIsaac, CEO of Verve, a mobile ad agency that specializes in location-based campaigns.
Larger by a factor of 2, according to a Verve study released last week. MacIsaac, who's been in the mobile game since 2005, felt that the critical mass of smartphone users had reached the point at which a viable study could be done to chart geo-located programs. Monitoring 2,500 mobile campaigns over the past year, Verve found that 36% of them were geo-fenced or geo-aware, versus only 17% last year. (Geo-fencing targets users based within a geographical area; geo-aware campaigns use real-time location data to target users who are within a set proximity of a store.)
While targeting DMAs—akin to buying local radio time—remains the leading location-based mobile marketing strategy at 30% of programs, the newer, more focused techniques are gaining ground. Geo-aware is a comer at 14% and geo-fencing is established at 22%, but both are surpassed by audience targeting at 24%.
Audience targeting doesn't seem to get as much attention from the media as the other strategies, perhaps because it's not in the gun sights of the privacy police. This method leverages anonymous, third-party data such as demographics or purchase history and pairs that with location to take educated guesses about consumers when dispatching marketing messages to them.
“Audience targeting is about creating audience segments based on where someone is, as well as who they are,” says MacIsaac. “If you have young woman who is at a Whole Foods at 11 o'clock on a Wednesday morning, you could assume that she's an affluent mom and send her an ad to test drive a car at the Volvo dealership down the street.”
MacIsaac and his cohorts at Verve advise clients to test all the various location-base strategies and work out multi-technique campaigns to maximize results. They are no doubt listening. One hundred percent of campaigns Verve fielded for clients in grocery, healthcare, real estate, and education verticals employed some form of location-based targeting last year.
Privacy's all well and good. Personally, I take pains to confuse people about who I am and exactly what I'm doing. I live in a big, bad city and it's safer that way. But, consumers, as long as you access free weather reports from Weather Channel and free plays from Angry Birds, you are ceding your rights to privacy, if only a little bit at a time. If you're really serious about this privacy thing, turn off your cell phone, leave it on your kitchen table, and go walk the dog. Do without it for a day. Go ahead, I dare you.