In 2018, brands can be confident that a majority of their audience will comfortable with personalization. After initial privacy concerns and a sense that brands perhaps knew too much about their customers, most people are now accustomed to seeing targeted advertisements, with some 63% of Millennials willing to share data with companies in exchange for personalized offers and discounts. The data is often anonymous, and goes no further than impacting a customer profile that reveals nothing personal or compromising about its subject. If you’ve searched for Nike trainers online, you’ll be shown ads for other retailers selling Nike trainers – this is the kind of micro-personalization that audiences now expect.
The next logical step in this development is the use of location data to inform marketing decisions. The reach of mobile devices and mobile data means that smartphones can gather their users’ location data almost constantly. GPS is used by just about every app to smooth and contextualize experiences – Citymapper and Google Maps will pull your current location, Instagram will offer suggested location tagging for posts and Snapchat can give you location-specific filters. Even Tinder needs to know where you are. This data is stored, and is routinely used for marketing or sent to third parties.
The important thing to remember about location-based marketing is that, though it isn’t new, it’s often misunderstood. Rather than simply targeting people as they enter a certain location, the location data from a device can give a brand information on where that device has been and when, building a clear picture on the consumer using the device. So, rather than opportunistic marketing based on current location, the major opportunity in location based marketing comes from the insight that can be derived about consumers based on their prior location data. Far from being separate to other forms of consumer targeting, location is very much part of the same picture.
One potential use of this use of location data would be judging commuting patterns and drawing insight from them. The Drum gives the example of two different mobile users. The first commutes daily from Surrey to Central London, a pattern from which advertisers could fairly confidently assume that the individual is of a high net worth. On the other hand, if the location data suggests that a user lives in Shoreditch and goes in and out of a university campus every day, marketers can expect them to have less disposable income. Relatively simple extrapolations such as this can be part of a bigger drive to understand an organization’s customers.
And the scale of location based marketing – particularly that derived through mobile – is overwhelming. Cisco predicts that by 2020 there will be 5.5 billion mobile users worldwide, and the opportunities presented by location are global in every sense of the word. 70% of the global population will be able to be hit with location-informed marketing campaigns, so brands should consider how location can influence their digital marketing strategies before they’re left behind by more proactive competition.
25% of marketing budgets are already being spent on location-based campaigns, according to the LBMA. The organization also found that over 50% of brands are currently using some form of location data to target their customers. And the growth is not without good reason – some 71% of Generation Z consumers (those that grew up using mobile phones) reportedly prefer their ads to be customized to their location and actively welcome the technology. According to Verve, 42% of consumers will click on an ad if location targeting is done well. As mobile internet usage continues to rise against desktop, the opportunities for (and consumer acceptance of) location based advertising will only grow.
One consideration marketing executives must have when exploring location based marketing, though, is the impending EU General Data Protection Regulation (GDPR). The legislation comes into effect on the 25th May 2018, and it affects all companies that hold data on a single customer who lives within the European Union, regardless of whether that data is captured within the EU or not. Essentially, GDPR restricts how brands can use customer data in an effort to increase the security of that data, and it focuses on having audiences opt in to data use in a clear and deliberate way.
Currently, no government has been specific on what GDPR means for location data, but in the same way that the regulations will affect all data, brands can use it so long as it cannot identify the individual it pertains to in any way. Knowing someone’s identity is in no way necessary for determining their location, and in this sense location could be one of the more available pieces of data for marketers to exploit. In a post-GDPR world, location could be everything.
Where it may once have been unpalatable, the fact that your smartphone – and by extension the brands that operate within it – has the ability to track your location will be no surprise to most. In fact, as users get more comfortable with personalization more generally, the use of location could offer some interesting avenues for brands to bring value to their audiences. When GDPR comes into effect in May, the entire digital marketing landscape will be forced to change, and location could be one of the few powerful tools still available to marketers in delivering good targeted campaigns – it might be time to go all in on what could be a hugely influential data point moving forward.