Blog home

The Secret to Using Location Data Marketing Perfectly

October 7, 2021
by
Elianne Marcus
Bird’s eye view of a map showing roads

Location-based marketing provides customers with the exact information that they need on a business’s products, events, and more. It not only analyzes customer needs, but also relates them to their location. In this fast-paced age of automation, it is necessary to find a location data marketing strategy that can keep up with demand and apply advertising in the most effective way. We’ll explain how by covering the following topics:

  • What is location data marketing and how is it used?
  • 5 benefits of using location data marketing
  • Types of location-based data marketing
  • How to get started with location data marketing
  • Privacy concerns with location-based data marketing

While there are many different ways to handle client information, location-based marketing has been used successfully by many companies around the world to do so in a very specific way. Let’s start with understanding exactly what location data marketing is, and how it utilizes location data to help marketers advise merchants on how to increase their revenue through advertising. 

What is location data marketing and how is it used?

Location-based marketing (LBM) is a marketing tactic that uses geospatial information to profile customers based on their address. This allows marketers to more precisely tailor ads to customers in order to encourage them to purchase relevant products and services in their area.

Marketers have come up with the idea to use location data as a tactic only in about the last twenty or thirty years. But as a concept, this kind of demographic profiling has been around for centuries. A store owner or marketplace seller from the 1500s would get friendly with customers and ask them more about their lives. They would then use this information to suggest merchandise that they believe would fit the customer’s likes and dislikes.

Today, this type of salesmanship is much more difficult to practice. Many stores have thousands of customers in a day, and they are unable to dedicate the time to make these kinds of individual connections. So they rely on strategies such as LBM to understand their client’s needs. 

5 benefits of using location data marketing

There are many benefits of using location-based data in marketing, but here are five that tend to provide the highest ROI. 

1. Close the online-to-offline attribution gap

When someone steps into your store, it’s important to know what influenced that decision. If you have information that a certain online campaign has brought more customers into the store, then you can create that positive link between online campaigns and in-store interactions. This  allows you to directly measure the effectiveness of converting online traffic to offline sales. A great way to do this is with gift cards for an online account. Giving a customer a physical card gives them an incentive to not only visit the store in person, but also to choose your store when shopping online.

If a customer clicks on an advertisement for a product you’re pushing strongly and then later purchases that product in-store, creating that direct link is ideal for studying the influence of online advertising on customers. For example, a customer may be interested in a specific brand of purses, and their browsing history on the company website indicates sustained attention on certain products. So if they drive by later, they might quickly step in to check out the brand that they had browsed earlier. 

LBM makes it possible for brands and businesses to capture people’s attention and influence their behaviors in real-time, when they’re simply going about their daily lives and are near stores they have visited online recently. 

2. Deliver ads to the right people, at the right time, in the right location

Tourists looking at a map

Anticipating the needs of the customer is a tricky business. But with advancing technology, it's becoming easier to predict when customers will be more likely to appreciate advertisements shown to them. 

LBM promises to deliver highly-personalized marketing by using geospatial services that will appropriate foot traffic data to potential customers. This helps businesses understand the right times or places to deploy an ad, based on passerby behavior. It is crucial to not send ads to the wrong people, at the wrong time, in the wrong location, because it could have adverse effects for the brand. Annoyed consumers do not make for happy customers. 

3. Improve user experience and customer satisfaction

While not irritating customers is crucial, so is meeting customer needs in a personalized way. Not every brand appeals to each customer in the same way. LBM can predict that someone who purchases lipstick from a makeup company often is likely to be interested in new lipstick being released by that company in the future. However, that same person would be less likely to be interested in a completely different product being sold by this same makeup company. Why? Because they have no history of buying or searching for it. 

LBM delivers relevant ads and messages to consumers that will make them feel more connected to a brand. At the same time, it avoids over-advertising to them and causing irritation.

4. Win market share 

The problem with marketing is that the company’s or brand’s competitors are doing it too. LBM allows brands and companies to specifically target high-potential customers. The closer they are drawn towards the company or brand, the less likely they are to be drawn away by competition. 

5. Increase revenue

Bills spread out

In any business, the bottom line is profit. LBM is able to directly drive foot traffic to stores, increase conversion of online traffic to in-store purchases, and substantially drive sales up. While LBM is an investment, it pays off in the end to have a highly strategic, technical, and data-driven marketing and advertising approach.

Types of location-based data marketing

There are several different approaches to location-based marketing. It is not simply a question of knowing where consumers are, but meeting them there with the ads, offers, and services they need at that moment. This level of detail means location data marketing requires more than just location information, as businesses need to be able to send information that pertains to customers and is more conducive to their needs. 

Geofencing

Map with a tablet on it with a bird eye's image of a city (assumably the city on the map)

Geofencing uses virtual boundaries to enclose specific areas for analytics or event triggering. In LBM, geofences are used to send ads to devices when they cross a virtual boundary. They are also used to determine how suitable an area is for advertising by measuring how many people pass through it. 

Main benefit(s): By using a geofence, a business can measure how long and how often a customer spends time in the location near their store. Then they can offer the customer incentives to visit the store. 

Real-world example(s): A bubble tea shop notices that a customer spends 8 hours near their store, 5 days a week. This probably means that they work nearby. The company realizes that if they were to be able to entice this individual into the store, then the person could develop a habit of buying a refreshing drink before or after work, or during their lunch break. They decide to send a virtual coupon to the customer every time they enter the area. 

Another example is when a fast food company notices that their competition is taking away a lot of its customers. They decide to create geofences around their competitors’ locations, and offer customers who enter the area virtual coupons to influence them to patronize their business instead.

Geotargeting

Geotargeting is the practice of delivering different advertisements to people based on where they are situated. Geofences are often used to deploy geotargeted ads.

Main benefit(s): Meeting consumers where they are with personalized ads, offers, and services is a strong tactic for converting them into customers. Geotargeting can be used near your store locations (or those of your competitors) to encourage consumers to buy your product by keeping your brand front and center in their minds.

Real-world example: A restaurant with its location in downtown Chicago could geotarget ads to anyone using the internet in the city’s urban areas. They would not advertise to people in outer suburbs, because the chances that they will make the trip to visit that restaurant are smaller. 

Beaconing

This is a marketing technique to engage the customer while they are in the store. It monitors where customers are walking or standing in the store in real time. Then it sends the customer advertisements of items that are nearby and that they might be interested in. 

Main benefit(s): Beaconing engages customers so that they will buy more products that interest them. This could directly increase sales, as the more items that customers find that they are interested in, the higher the total sale when they checkout could be. 

Real-world example: A big box retailer can see where consumers are moving throughout their store, and send them ads for nearby products. This increases the likelihood that shoppers will make extra purchases.

How to get started with location data marketing

Location data marketing may be new and highly technical, but it is very easy to get started with. The steps below will provide anyone looking to get started with a solid plan. They lay out a method that not only allows marketers to use location data, but also makes sure that the client understands how and why the data is being collected.

  1. Identify the problem you are solving: You cannot comprehend how to solve a problem until you understand exactly what it is. For example, are you having a hard time attracting customers, or are you actively trying to build the brand in new directions? 
  2. Define a goal: This is directly related to the direction that the store wants to go in to solve this problem. Do you want to entice more customers, or do you want to increase brand awareness?
  3. Determine methodology for solving: Once you know what you’re trying to do and what issue it’s solving, decide which exact method will be used for fixing this problem (geotargeting, geofencing, etc.). Determine the inputs – such as the geographic boundaries or customer data – for this method, and make sure you acquire the appropriate type(s) of data. Do you have privacy concerns about collecting data? How can you resolve these privacy concerns?
  4. Source data to solve: Depending on your methodology, purchase, download, or collect data to include in the analysis.
  5. Run analysis: Analyze the resulting data and determine whether this method was successful in attaining its original objectives. Does the output fulfill the goal?

For example, if a shoe merchant does not have enough foot traffic coming into the store:

  1. Identify the problem you are trying to solve: Not enough foot traffic; need to increase customer base. 
  2. Define a goal: Use location-based marketing to measure the success of a marketing campaign. 
  3. Determine the methodology for solving: Use geofencing to measure all the customers in the area who visit the shoe merchant’s store, and geotarget them by sending out virtual coupons via email. 
  4. Source data to solve: Measure how effective this virtual coupon campaign was. Compare how many items customers bought during the campaign to sales from this same exact time period last year, and determine if sales have increased. 
  5. Run analysis: Determine if the goal was met and if the location-based marketing method used successfully increased ROI. 

Privacy concerns with location-based data marketing

Location-based data marketing can raise red flags because of the sensitive nature of the data. It is the responsibility of the marketer to ensure that they are ethical when working with location-based data and follow guidelines to stay within their limits. 

SafeGraph works with anonymized and aggregated foot traffic insights that provide stats on the general volume of customers. SafeGraph protects user privacy by never collecting data at the individual device or user level. 

LBM makes a marketer’s workload lighter by providing data that can engage customers in so many different ways, providing a higher level of success. Explore datasets that power LBM by visiting SafeGraph’s advertising resource hub.

Browse the latest

Subscribe to our Monthly Newsletter

Sign up to stay in the loop on all of the latest blogs, podcasts, product information, and more.