Location-based marketing in hot seat

Location-based marketing provides enormous opportunity for direct marketers. Just as search reaches customers who’ve raised their hand seeking information, location-based marketing targets consumers potentially in the mood to buy and geographically near point of sale. Use of this strategy by brands such as American Express Corp. and Kmart has surged.?

Other stories in this issue that touch on ?location-based marketing include our On The Beat: Digital story featuring a Dunkin’ Donuts promotion that uses the location game Scvngr; and our On The Beat: Multichannel feature on retailers’ mobile apps. Luke Gebb, VP of global network marketing at American Express, called location-based marketing “game-changing.” ?

Better technology lies at the heart of that. The main feature on search marketing (page 26) details the evolution from 10 blue links to results augmented with maps and multimedia to engage consumers on a more personal level. I’m not convinced that will be an easy feat because the same barriers exist, but it may mean direct marketers will end up owning this corner of marketing.?

Not everyone is doing a great job of localizing marketing, despite the availability of basic data. Ryan Deutsch, VP of strategic services at StrongMail, comments on our Battle of the Brands contenders. Deutsch gives 24 Hour Fitness poor marks on local efforts. ?

“Localization is a big deal today, and I shouldn’t have to hit a button in an e-mail to find something near me,” he says. “They should provide options for me based on my ZIP code. A much better message would be something like, “Did you know there are three clubs near you?”?

Speaking of ZIP codes, a setback this year could also affect marketers’ ability to use even this most basic information. The California Supreme Court ruled in February that Williams-Sonoma could no longer collect ZIP codes during credit transactions, deeming them personal information. ?

With that kind of precedent, retailers fear a slippery slope. More than 100 similar class action suits have been filed against the ?likes of Amazon.com and Walmart since the ruling. Its spread beyond California’s borders could spell big trouble for location-based ?marketing.

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