AAAA Transformers: Location Adds Context & Context Adds Value

January 12, 2010 – 3:50 pm

The blog post below is part of my submission for the American Association of Advertising Agencies (4A’s) Transformers Program.

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Every few months I select a few emerging trends to dig into. I’ve discussed geo streams in a previous post and this is a further extension of that idea and many other ideas I’ve talked about recently.

One of the trends I identified a while ago is starting to become a reality: REAL location targeting. This is why I have been so excited about the growth of companies like Foursquare and their competitors and companies such as Placecast, one of our technology partners that provides location-based marketing solutions.

We’re seeing growth in brand driven campaigns (Placecast), whereby brands can interact directly with consumers, as well as platform / network based companies (Foursquare), whereby brands interact with consumers through an existing network. The difference? Who owns the customer relationship and controls the messaging.

Sure, the ability to target consumers based on zip code, household, general demographic profiles, etc. has been available for a long time. But geo-location targeting is different – it adds location and time to the equation that no other medium or channel can match.

From a media consumption perspective, mobile devices are with consumers 24/7. What does this mean from a targeting perspective? Mobile is a way to target consumers regardless of location (work, home, travel) and time (workday, weekend, day, night). And messaging can be triggered through a variety of means.

Layer on social (what your friends are doing, friend recommendations), along with purchase history and demographic / psychographic profiling (what people similar to you liked), comparison shopping and reviews (prices and general consumer reviews) and you have true hyper-local targeting focused on products and services with the best potential fit for the consumer.

How can location be transformational?

Let me introduce Context-Based Marketing.
(Note: I’d like to establish context-based marketing as a new term. I haven’t heard anyone else define this, so I’d like to claim it as my own. Heard about it before? Send me a link. I’m interested and will gladly add them as a reference.)

Brands want to be where consumers (and eyeballs) are to influence buying decisions. No secret sauce there.

Consumers, for the most part, are anti-advertising except for when they determine the advertising to be of value, usually we they can save money, whether that be through purchase incentives (acquisition) or rewarding loyalty (retention).

Context-based marketing can play a key role in this. Through the utilization of strict privacy and security controls, consumers can feel safe sharing personal information in return for value (discounts, rewards, recommendations, relevant offers, VIP only programs, etc).

Partnerships are essential as mobile is a complex ecosystem consisting of application and technology providers, carriers, location providers, handset providers, content providers and various other players. Oh yeah. And regulations all over the place.

Want to hear how this would play out?

I’m in Times Square and I want to find the best place to grab coffee.

  • I search for a location nearby (ordered by distance, with directions from current location).
  • I want to know the ratings of the location (good to bad), what my friends on various social networks think of the location, what people in general think, and a product recommendation based on my past purchase history.
  • I’m presented with a tip to ask for a specific barasita by name, as they make the best sugar free skinny latte in New York and they took first place in a barista competition last week.
  • I’m offered a dollar off since this would be my first visit to this location and I can save another dollar if I sign up for their loyalty program, as it’s a chain store with locations around my home as well as my frequent travel destinations.
  • I earn points for posting a status update of my visit and earn additional points for posting a review of my visit.
  • I earn referral points as one of my contacts connects to the loyalty program after seeing my status update.
  • While I’m here, I’m thinking about sticking around for an hour to catch up on work and use their free Wi-Fi.
  • One of my friends hears that I’m at the location and would like to join me for the live music later tonight, starting in an hour.
  • I get a message from another friend that wants to meet for dinner at a nearby restaurant that has a great wine list and tonight they’re serving one of my favorite salmon dishes. Included is a link to a reservation (which I accept).

Think Yelp with Google’s Near Me Now mixed with Amazon & Netflix reviews & recommendations, Red Laser’s price comparison engine, Paypal transaction history, Google Maps, Foursquare, OpenTable, Facebook & Twitter – all in one nice little package that works across mobile carriers and devices. And then make the targeting available through a bidding engine like Google Adwords allowing companies to track acquisition costs and allow national brands to scale down to a targeting level never before possible.

Transformational? I’d like to believe so. Possible? Definitely. Easy? Not for the fainthearted. But the company that achieves context-based marketing will have a consumer base that advocates their brand while minimizing add spend in a non-invasive, opt in nature.

While many companies will fail, there will be an ecosystem (think many players) that join together to make this a reality.

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