Location Based Marketing. Should You Be Using It?

One of my first blog posts was about location based marketing. The concept was fairly new to me and I saw a huge amount of potential because of the explosive growth of smart phones and the state of the world economy meaning that people were on the search for deals all the time. I decided to test two of the most famous applications and began avidly checking in on both Foursquare and Gowalla. But what were my expectations and what was I hoping to get out of this commitment to Geo-locating myself? A few months on I think its time to review my experience.

2011 has been a big you for LBM which is summerised nicely in this infograph

location based marketing 2011

I think the two things that are illustrated by this timeline is the consolidation of location based services as well as the impressive growth of Foursquare. From my own experiences based here in Ireland it became quickly apparent that Foursquare was the only show in town. The check in options available to me on Gowalla were few and far between and I ended up using places that were miles away from me just to try get more out of the service. It didnt take long for me to kick Gowalla to the curb and focus my intentions on Foursquare.

What makes a difference with Foursquare is that when you decide to check in some place, it is usually there. This is the minimum that users will expect if there service is to gain any sort of traction. So I went at it hammer and tong for a few months. Oh I was the mayor of plenty of places, I had badges and accolades stacked as high as the eye could see. I gained the satisfaction of ousting plenty of people and I even went to a few places solely so I could check in there. But after I while I began to think…why? Why bother going to all this effort? Not once in all this time did I benefit from discounted food or drinks or..anything. My mayorship never brought me any preferential treatment and to be honest ousting people never brought that much satisfaction. I will put this last element though down to the fact that in reality I don’t know the majority of my friends on Foursquare. I didnt much fancy using my own name when I initially began this LBS adventure because quiet frankly I didnt want everyone I knew knowing where I was all the time. My previous experience with check ins was through Facebook and whenever I saw someone trumpeting where they were to the masses I just thought it was sad! I needn’t have worried that much though because I quickly discovered that even if I had wanted to involve myself in a geo-tagging love affair with any of my friends…barely any of them used these kind of services because…why should they?!

Some maybe I missed the point of the whole process. Maybe I shouldnt have been so focused on gaining discounts and using my early adopter status to gain preferential treatment. I have found Foursquare useful when on occasion I have checked into a restaurant and found a friendly recommendation waiting for me suggesting something to try. Is this the really purpose of Foursqaure. Goodwill and advice? Admittedly I would value advice from people I knew more and it would be useful to know what my friends had thought of places when I am at them. But really is that enough to convince people to take out their phone from their pockets and go through the check in process? If me as an early (ish) adopter has already got sick of it, what chance was there really to convince higher numbers of the value of Foursquare?

There needs to be a carrot for people to consistently use the service and right now there ain’t no carrot for users in Ireland. There is only one venue within 5kms of where I am now who offer any kind of discount for checking in on Foursquare. It is a pub names O’ Dwyers in Kilmacud. I contacted them to see what kind of response they had to their campaign and the answer was short and to the point. NONE.

So if businesses aren’t seeing any return on offering discounts is there any hope for for increased business participation? I think companies like Foursquare and Geo-deals need to up their efforts in targeting business owners to explain the benefits and offer them advice. No doubt the service will prove more popular in a busy area where consumer decisions might be tipped in favour of a location based on the LBM that they offer.It is also vital for businesses to let people know about checking in. Foursquare signs and details on menus would certainly make a difference.

Like a lot of things here in Ireland I think we are going to have to wait some time for both businesses and consumers to buy into the whole location based marketing concept. 2012 promises to be another big year for the industry so what can America expect to see? Here are some of the big predictions being talked about right now by industry experts

  1. Foursquare hits the 30-million mark. Foursquare is growing at approximately 30,000 users a day, and we expect this to gradually increase during the upcoming year. After announcing its 15 millionth user last December, look for Foursquare to tally 30 million users by the end of 2012.
  2. Facebook will enable location-specific mobile advertising. As Facebook continues to grow revenue ahead of its 2012 IPO, look for the social network to finally turn on location-based advertising within its mobile application. This will enable marketers to deliver ads based on both current location and past check-ins.
  3.  New competitors emerge that automate the check-in process. Consumer growth has proven that users enjoy sharing their location, connecting with nearby friends and earning rewards. The largest headache with services such as Foursquare and Facebook is that users must still manually check in to each location. This creates opportunities in 2012 for innovative start-ups that automatically check users into venues when provided permission.
  4. Groupon Acquires Foursquare. With Groupon still flush with cash, and Foursquare continuing to drive more-and-more merchant transactions, we predict Groupon makes Foursquare an offer it can’t refuse. This would expand Groupon’s merchant toolset and give it access to millions of new consumers through Foursquare’s mobile app.
  5. Marketers embrace “big data” and integrate location-based marketing. As more marketers include location-based marketing in their 2012 campaigns, reporting will become a hot topic. Check-ins provide incredibly valuable data to marketers about what their customers do and when they do it. This will lead savvy marketers to begin integrating their location-based data into their existing marketing platforms, enabling them to learn even more about their customers and incorporate these learnings across all marketing channels.
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Sensible Google Advertising

We had a gentleman Google come in and talk to us recently to give us some advice on search engine marketing. We have covered organic search so this was to focus on paid advertising through Google.

I can’t even attempt to cover the whole area, and this is a very simplified version.  The basis behind Adwords is

Bid price x quality score = position

Google’s aim is to display the most relevant ads to searchers. Quality score applies to both your key words and your account and is affected by a whole range of things including

  • The click through rates of your ad. The more people are clicking on your ad, the more relevant that google deems it, meaning the click cost will reduce. A click through rate (CTR) of 3% is considered good.
  • The load time for your landing page can also effect your quality score.
  • How closely does your ad copy reflect your keywords
  • The use of Keywords in the Ad title will effect quality score
  • Whether the landing page contains the keywords searched.  Every time someone does a search, they are looking for an answer. Does your page help them find that answer?
  • The overall account quality score. This will be affected by the history of the account.

His stand out advice was that tracking is key. The more tracking you do the better success you will have. You need to focus on where you are doing well and realise where you are not, and then remove your efforts from that area. Makes sense really. Particularly with all the tools that made available to you.

Tracking your adwords progress is Key. Use Google tools

Using tests to optimise your landing pages is really important. Amazon do so much testing on their pages that they know that having some one with a blue jumper will effect click through rates over some one wearing a green one say. Now this is just an example, but what is fact is that orange encourages the most click throughs out of any colours. It stands out like red, but its not as aggressive! Ah so thats why amazon is so orange! When your talking about the volumes that they deal with these things can have a huge impact.  But even on everyday websites making little changes like these can help.

You can use split tests where people who click on your ads will be brought to alternate landing pages. This means you can makes changes and decide wheich works better A or  B.

Alternatively there is multivariance testing, which allows you to change a whole range of layout, fonts, colours etc. But this is complicated stuff and perhaps we should leave this to the amazons of the world…for now.

Because of the cost associated with traffic from Pay Per Click (PPC) it is important to discourage the wrong kind of searcher. If you aren’t going to be able to convert them to a set goal whatever you decide that to be, well then they are simply costing you money. It is important there for to use negative keywords.

Negative keywords are words and phrases that you do not want searchers to associate with your products and services. When you add negative keywords to your PPC campaigns your ads will not be served if those words are part of the user’s search query. For example if you are selling a high end luxury cruise, you dont want to attract people looking for cheap/low cost holidays. So by having cheap as a negative keyword, any one who includes that in their search query won’t be served your ad.

Putting a price in your search ad will increase conversion rates too, as people who are out of your targeted price range won’t waste their time clicking through.

Mobile Search worldwide is predicted to be US$3.3 billion in 2011 sky rocketing to $20.6 billion in 2015. Its surprising then that so few companies have adapted their websites for mobile usage.  Mobile search is different with 70% of queries being fulfilled within a few hours.

By including a phone number in your mobile ad and enabling lcick to call, you will increase conversion rates.

Google Display Network, or Adsense is different from Adwords, as you are targeting people who are not actively searching. Therefore the click through rate is going to be lower. There are some techniques that you can use though to help improve this.

Remarketing allows you to target people who drop off in the conversion process. Because Google can track people through cookies, it is aware if people begin a transaction and don’t complete it. for example, if you decide to purchase a book and place it into your shopping cart, but then realise that you don’t have your credit card and don’t make the purchase. You can then be directly targeted on other websites to encourage you to buy the book again. The cost of acquisition for somebody that has already demonstrated a desire to buy the book, is lower than someone who hasn’t.

Google also automatically scans your emails, using their content to target ads. You email your friend about going on holiday in France. Hey presto loads of ads start appearing about things to do it France. I know, I think its a bit freaky too!!

Google indexing your emails. Remarketing. Cookies

Some other techniques you can use for targeting on the google display network

  • Contextual – target people based on clusters of Keywords
  • Placement – put your ads on specific sites
  • ICM – target people who like certain topics. Type in google.com/ads/preferences to find out which area you are most interested in!
  • Topics – Target sites of a particular topic.

GDN ads can be pay per click or pay per impression (usually 1000). PPI is used more for branding, which in turn can positively effect your search numbers

In my next post which will hopefully be soon I will talk about  how to get the most out of your Google advertising

Get Mobile 2011 Dublin

I am just home from the Get Mobile 2011 conference here in Dublin and I felt compelled to do a summary while it was fresh in my mind.

The stand out phrase for me came in the opening speech by John O’Shea, CEO, Zamano. He said  “Everything that can. Will go Mobile”.

Our course coordinator Theo Lynn tweeted a link this morning to an article about whether Steve Jobs had solved the innovators dilemma. Luckily I had an opportunity to read it over because a strong focus of John’s talk was about disruptive technology and how there are constantly changing winners and losers in business. Nokia was huge ten years ago and now they are hardly a player at all in the mobile phone game. Right now it is Apple but it is very hard to maintain your position.

Mobile Search is different from desktop search. People are looking for things now. 70% of mobile search queries are fulfilled within hours. There are also less search results on a page so if you are not up in the top 4 or 5 results you have no hope.

Website need to be optimized for mobile viewing. We have all heard that before. But in an area where an estimated $2 Billion is spent on mobile advertising, only 15% of companies surveyed had budgeted to have their websites optimized for mobile. What is the point of advertising on mobile if when they get there, your site is not user friendly?

Mobile Marketing. iphone, apple, android, google

John spoke about retail 2.0 where consumers could be sent location specific offers from supermarkets based on their previous buying preferences. Brands will bid for the right to send these ads much like the Google Adwords system works now. One for the future but fascinating none the less!

Mobile payments right now are taking two forms. Over the network payment, where the mobile network providers are involved. However there seems to be little cooperation between the neccesary parties right now and progress is very slow.

The other option, which features in Japan a lot, is contact-less transfers. This makes use of Near Field Technology and removes the mobile networks from the equation. Billions of dollars of transactions could be made each year on mobile handsets, with the mobile companies having no participation at all.

The next speaker was Joe Drumgoole from Feedhenry. Joe’s company create apps and there was a bit of controversy when Joe told us that the Windows 7 phone was awful and really hard for Apps to be developed for. Seeing as Microsoft was sponsoring the conference this didn’t go down to well!!

The emergence of the app industry was again pioneered by Apple. Where as before the biggest challenge was trying to work with all the networks and the limited revenue that could be earned (4%) from app. Apple made the whole process easier and their model of 30% revenue has been a huge incentive.

What you need for a succesful App is

  1. GPS
  2. An optical System
  3. PIM (personal internal managment)
  4. Touch screen (this is important as mobile is more about visual than writing)
  5. Internet

If an App isn’t making use of the above it probably could function better as a web page.

The future area of Apps are

  1. Games
  2. Social networks
  3. Personal productivity
  4. Mobile work force
  5. Mobile business

The best example of a well made App is the Facebook. Its one failing is it does not allow advertisers to use it to create ads, or monitor their existing ads.

The challenges to App creaters are

  1. User interaction design
  2. Small screens
  3. To maximize device capability
  4. To use Cloud interfaces
  5. Device resolutions and dimensions
  6. Standards (HTML 5 is a collection of standards which isn’t totally polished but is the future)

The talk that I was most interested in was by Brendan from Geodelic. He decided to get into the mobile industry after realizing how much more attached he was to his mobile phone than his wallet, after losing them both. He knew then that mobiles were so integral to our lives that they were the future.

In 2007 we saw the emergence of the group discount phenomenon. Many business owners though were not seeing repeat business and ultimately were not making any money from the sales they pulled in from the likes of Group on. The huge margins that discount deal companies demand are necessarily because of the massive sales forces they need in order to make their process work.

G-commerce is the combination of E-commerce and traditional bricks and mortar businesses. By allowing businesses to attract customers to their stores with deals while they are in the area, they automate the group discount process and there is far more potential to actually make money. They can target people at off peak hours and at more specific times, rather than never knowing when discount coupons will be redeemed.

Geodelic have chosen Dublin as a pilot for Geodeals. Where the likes of Google places and FourSquare will be serious competition, they are hoping to leverage mobile phone operators as their advantage. This will provide them with a ready made consumer base.

Its an area that definitely interests me so I will be looking into it more and will keep you updated.

 

Foursquare – Miles Better

I am going to go out on a limb here and say that Gowalla is useless. I am sure that is probably has great functionality in America or other locations but as I sit here now looking at it, the closet available “spot” to me is a park nearly two kilometers away. Anyone following me probably thinks that I enjoy walks and fresh air because I have checked in there 4 times just to try interact with the app in some way.

With Foursquare once you open the App there is a huge amount of registered locations and businesses available to check in at. This is encouraging because when you find exactly where you are it gives you a little boost. Having said that I have no doubt the novelty will wear off soon.

With Gowalla once you choose from the tiny list of available options, usually no where near you actually are, all you do is register that youre there….

It seems quiet keen on you registering anyone else you are with and there is an option to leave a highlight or a suggestion. But short of that there doesnt seem to be a whole lot going on. You are are not encouraged by being granted points or mayorships let alone a discounts or special offers. It almost seems more like a poor tourist app.

I will reluctantly continue on using it for the time being. But unless I find it more engaging I’m giving it the boot! If any one has any other location based apps I would be delighted to try them out.

Foursquare is a different story. They way it is laid out is easy to use. As I already mentioned, their location numbers are great. But I have yet to see much business participation. There is an explore option which tells me about some local deals which I am going to try investigate when I get a chance. And you can be sure once I become the mayor of some place I am going to talk to the manager and see if if they have any intention of rewarding me!

To date I have 36 check ins and 7 badges!

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My Location Based Marketing Experiment

I am a new comer to the digital game and have been devouring articles and information to find the areas that appeal to me the most. One thing that has particularly grabbed me though is location based marketing. There are a few reasons.

First , I have gone from not having a smart phone to not being able to live without one within the space of a year. Secondly, the success of discount based companies such as Groupon as shown that there really is a demand for deals in today’s economic climate. The final reason is curiosity. On the one hand I genuinely think that this could be a huge phenomena with people being able to avail of discounts based on their location and places they frequent. While businesses will be able to entice both new customers and ever increasing loyal customers to their store by putting out desirable discounts to those who choose to avail of them. But…. on the other hand I have to say I think there is just as much chance, particularly in Ireland, that it will never take off and consumer’s suspicions and business’s slow up take, meaning that it is doomed to be nothing more than a passing fad.

location based marketing needs to offer rewards

For location based social media to catch on and appeal to the mass market I feel there needs to be something in it for them. Sure, there might be a certain proportion of people who are satisfied by a social media interaction with a location focus. But for most people being the mayor of your local coffee shop loses most of its appeal unless you are rewarded for your troubles. In short businesses need to begin to participate with applications like Foursquare and Gowalla and offer rewards to people who are using them.

Geotoko, which was recently acquired by Hootsuite, is a location based marketing and analytic tool which allows businesses to easily run real time location based promotions. Looking at their onsite demo I think this could be a huge advance in encouraging business engagement in the process, by making it easier. I have contacted the company to request a demonstration and will update if I get the opportunity.

Foursquare location based marketing tool

Foursquare and Gowalla seem to be at the forefront of location based check in applications right now. Foursquare was set up in 2009. Its two founders Dennis Crowley and Naveen Selvadurai had set up a previous location based tool called Dodgeball, which Google bought in 2005. Google eventually shut it down in 2009 replacing it with Google Latitude.

Gowalla was also formed in 2009 and is based out of Texas. It certainly doesnt have as high a profile in Ireland but seems to be gaining a bit of momentum now.

I am by no means an innovator when it comes to new technologies. I am the mass market. So what I have decided to do is run an experiment. I have recently signed up to Foursquare and have just this minute signed up to Gowalla. I am going to actively engage in both applications over the coming months and see how much they engage me. Will I be rewarded? Will it encourage me to go to locations more frequently or for the first time? And most importantly will I see potential in them as important future marketing tools in Ireland.

Right now on foursquare I have 14 check ins and two badges, giving me a grand total of 95 points. The closest check in location Gowalla allowed me was park 2 kilometres away!

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