Location-Based Marketing: What it is and How it Works

Location-based marketing (LBM) is a type of targeted marketing initiative that enables brands to reach out to consumers with personalized content when they’re in close physical proximity to predefined locations. 

Location-based marketing is a highly effective strategy for reaching and engaging customers: Factual’s 2019 Location-Based Marketing Report says that 84% of marketers run more successful campaigns when they use location data. Marketers can use various types of location-based marketing to reach customers, across numerous platforms and channels, including email marketing; ad targeting and retargeting; SMS marketing; and in-app push notifications.

In this article, we’ll take a look at the different types of location-based marketing opportunities that your brand can take advantage of, and what the benefits are. 

IP address marketing

One common type of LBM is IP address marketing, which lets you track the geographic region of every user, whether they’re browsing a website from a desktop computer or a mobile device. You can use this type of location-based marketing to segment your audiences for highly personalized messages in different regions or cities: For example, an sports merchandising company might spotlight apparel featuring the New England Patriots to audiences who live in Boston and points north in their email newsletter; while they’d spotlight the Miami Dolphins apparel for audiences living in south Florida.

You can also use IP address marketing to attract new customers, by targeting audiences specifically based on zip code or region across large ad networks such as Google or Facebook. This enables you to manage your ad dollars well by spending only on relevant audiences: For example, if your brand is opening a new store, you can promote an ad for the store opening to users within 25 miles of the store.

Because you can track the user down to the individual IP address, you’ll be able to see their history of engagement with your ads and content across all of their devices, even if you haven’t collected their email addresses or phone numbers. At the point that they convert, you’ll already have a wealth of customer data around their content consumption patterns and preferences.

GPS marketing and geofencing

When targeting users on mobile devices, you can use GPS marketing to send targeted messages to users within a set distance from a network of global positioning satellites via SMS or in-app push notifications.

This allows brands to target users with customized ads and offers when they are within a fixed radius (“geofence”) of your brand’s locations—or even to geographically target your competitors stores and send ads to incentivize them to visit your location instead. Whole Foods successfully used this strategy to geotarget customers who were close to its competitors’ stores, offering them special deals to visit their stores, including maps and turn-by-turn directions. The campaign realized a 4.69% post-click conversion rate, more than 3x the industry average.

Beacon marketing

Beacon technology is another type of location-based marketing that’s gained a lot of traction among brands since its introduction on the Apple iOS mobile platform in 2013. Beacons are small devices that can be placed anywhere in a store, and can transmit Bluetooth low-energy signals to send ads and messages to users’ phones when they are within a set radius of the beacon device. It’s ideal for in-store marketing, where users’ cell phone signals may not be strong enough to receive other types of messages.

Proximity can vary greatly: It’s possible to send notifications to users anywhere within the store, or to those who are browsing a particular aisle. Users won’t receive beacon notifications by default, though: They need to have opted in to your mobile app, and have agreed to receive push notifications. 

When using beacon location-based marketing, make sure to provide a good incentive for users to download the app and receive notifications, such as a substantial discount. From there, you can collect a wealth of data about them as they browse your store shelves, tracking their behavior and sending them customized offers based on where they are in the store and their customer profiles. Beacon technology can also be used for way-finding: For instance, Target provides a store map with your real-time location, making it easy to identify the location of any item in the store and any promotions for the item. 

Location-based marketing on your cross-channel marketing platform

Location-based marketing can be a powerful strategy for reaching and engaging your audiences while using a cross-channel marketing platform like Iterable. 

Iterable offers an integration with Foursquare’s Pilgrim technology, enabling your brand to reach customers in direct proximity of specified locations through GPS technology, such as when leaving or returning home, or when adjacent to one of your store locations. 

By pairing location-based marketing with your existing customer profiles, you can set up sequences of highly segmented, personalized marketing messages that reach your customers exactly how and where they want to be reached, based on the data-rich profiles you’ve already assembled. 

For instance, if a new customer has downloaded your mobile app, you can use Iterable to set up a highly personalized campaign based on her demographic and custom event data that reaches across all of the channels she uses: email, SMS, mobile push, web push, in-app notifications, social, and more. If the customer sets foot in one of your physical stores, you can use that event as a trigger for location-based marketing offers, with customized follow-up based on her actions and purchases in the store. You can also use location targeting as a powerful segment across all of your marketing channels, providing customized product or service offers and messages based on the customer’s geographic region.

Location-based marketing is a powerful tactic for driving highly relevant messaging to customers who are likely to engage, whether they’re being targeted in their homes or while physically in or near a store. By making location-based marketing a part of a robust, cross-channel marketing plan, you’ll be able to increase purchase intent and drive more conversions across all of your marketing campaigns.