Imagine receiving a text message letting you know that your favorite online store is hosting a pop-up event in your city. It comes at the right time. You were in town and looking for something to do that weekend.
That precise targeting is the result of location-based marketing. Using time and place data, companies can respond to weather conditions, local events and individual behavioral patterns to offer customers the most appropriate marketing material.
This is how location-based marketing works.
What is location based marketing?
Location-based marketing (LBM) uses online and mobile data to target users based on location or location history, helping brands deliver more relevant content to potential customers. Businesses can use real-time location data to encourage customers to take a specific action. For example, a local business could use location-based advertising to notify a customer that it is within half a mile of a boutique.
LBM can boost customer commitment. “Many elements of our lives are digital—the way we shop, communicate, and connect,” says Anna Decilveo, director of merchandising and brand partnerships at Shopify. “LBM offers brands an innovative way to cut through that noise and connect with their customers on a local level.”
5 types of location-based marketing
With LBM, companies collect location data and send messages through their apps or purchase ad space and location data from third-party providers. Here are five ways companies can leverage this data:
1. IP targeting
IP address targeting uses a target customer’s unique IP address to determine their specific location. Google uses IP targeting, for example, to collect users’ IP addresses and display local listings in Google search results when a user searches for “Thai restaurant” or “parks near me.”
You can set up location-based targeting in Google Ads to deliver content to users in a specific geographic area.
2. GPS guidance
GPS targeting works similarly to IP address targeting, but uses GPS data to target users. Through this method, you can send personalized messages to app users using push notifications.
If there is an unexpected cold snap in one of your target regions, for example, you can send customers in the area a message like: “Are you cold? Visit our online store for 20% off cozy fabrics.”
3. Geofences
Geofencing uses GPS technology to create a virtual border around a specific area, such as a physical store or event space. For example, you can geofence a conference in your target audience assists and then sends targeted messages to users entering the geofenced area.
4. Geoconquest
Geoconquest involves geofencing competitors’ locations, such as your local retail store or event, and encouraging users to consider your brand as an alternative. Geoconquest campaigns often offer promotions or discounts to encourage customers to choose your company over another.
5. Beacon
Beacon is similar to geofencing, but instead of using GPS coordinates to create a border, the area revolves around a connected device (a beacon). Also called proximity marketing, consumers receive messages when they are within range of the beacon technology.
3 Tips for Using Location-Based Marketing
Here are three tips to help you plan and implement location-based marketing campaigns:
1. Gather consumer data
Collecting location-based data can help you understand customer behavior and optimize your location-based marketing strategy. “Review customer segments to identify which locations are most relevant to your brand,” says Anna.
If you’re having trouble reaching a specific customer segment, for example, you can analyze location data and discover that they attend upscale farmers markets. You can then employ hyperlocal marketing, a highly focused LBM strategy, to target the specific parks or blocks that house these markets.
Where consumers spend their time also provides valuable information about their needs and preferences. Combining location data with other marketing intelligence can shape your overall marketing strategy, improving customer experiences and driving brand engagement.
2. Locate creativity
“Develop creative that is specific to the market,” says Anna, adding that companies do best when they “include products that are best sellers in that location” and “tailor language and assets to respond to the nuances of the market.” city”.
Locating creative assets and honing marketing strategies for different markets takes time, but can lead to more personalized connections with your brand. “It’s worth the extra effort to create localized creatives, both assets and text, instead of using generic creatives in all cities,” says Anna.
3. Optimize time
Consider when you want customers to receive your messages. Is it as soon as they enter a specific event space? Or right before they realize they’re hungry for lunch? Maybe it’s a day or two after a visit to the store.
Timing your campaigns can generate better results, avoid wasted spending, and preserve audience trust. Here are some scenarios to consider:
- Redirect visitors to your store. You can geofence your store and send specific messages to visitors at 11 a.m., two business days after their visit. This strategy allows you to target existing customers with promotions and reach casual browsers, even if you didn’t collect any information about them.
- Minimize privacy concerns. Imagine receiving an ad for a dating app the moment you walk into a divorce attorney’s office. Ethical location-based marketers respect user privacy by anonymizing data and informing users of location-sharing options, but certain real-time ads can still make consumers uncomfortable. Consider delaying delivery to minimize privacy issues.
- Address visitors to the event. Many places have different groups of visitors throughout the day. Let’s say you’re geofencing a conference event space; You will have access to the people organizing the event in the days before it starts, access to the attendees during the event, and access to only a few people during the night. Choose your time period to maximize reach with the right audiences and avoid wasted ad spend.
An example of location-based marketing
Companies can use LBM to design innovative and interactive brand experiences. Consider the following location-based marketing example:
In August 2024, the cult-favorite beauty brand brighter promoted the launch of its Boy Brow Arch eyebrow product with a Treasure hunt powered by LBM. Four days before the public launch, the company put up giant branded billboards containing QR codes in Los Angeles, New York and Chicago. Customers who found the signs were able to scan the QR codes through Shopify’s Shop app to get early access to the product. The Shop app would then direct winners to the nearest Glossier store, and Shopify’s location-based technology ensured that only users who located a sign could access the product.
“Applying an interactive experience that is unique to the location and market, as we did through the Glossier scavenger hunt, provides an unexpected and exciting touch,” says Anna.
Location-Based Marketing FAQs
What are the privacy issues with location-based marketing?
How effective is location-based marketing?
Location-based marketing strategies enable more precise targeting of customers and provide a better understanding of consumer behaviors and preferences. They can be an effective way to acquire new customers, drive sales, and build customer loyalty.
What are the disadvantages of location-based marketing?
Location-based marketing works by leveraging location data from apps on mobile devices, but this information is only available if the consumer allows location sharing on their devices. Companies also need to design applications with location tracking capabilities or work with location-based platforms to collect data and deliver messages.