Location-Based Marketing: What Works And What Doesn’t

When it comes to marketing, there are so many different channels you can use to reach new customers, grow your audience, and boost your business’s bottom line. But that doesn’t mean all marketing strategies are going to be right for you.
In recent years, location-based marketing has quickly become one of the most popular marketing strategies used by businesses to help capture consumer attention, pushing them to make an impulse purchase while in a certain geographic location.
In fact, in 2019, marketers were estimated to have spent well over $26 billion of geo-targeted marketing campaigns. But what exactly is location-based marketing? And how can you apply it to your business?
Keep reading, and we’ll understand in detail about this rapidly growing marketing strategy, and whether or not it’s right for you.

What Is Location-Based Marketing?

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According to Whois XML API, IP Geolocation based marketing uses a mobile device’s location feature to alert consumers about offers from nearby businesses.
So, for example, if you’ve ever been walking down the street and then got a PING on your phone, saying that a certain store within your vicinity has a good deal on, you’ve been targeted by location-based marketing.
In most cases, location-based marketing involves a business sending alerts to smartphones or devices via SMS to notify the device owner of any discounts or other purchasing incentives they may currently be offering.

How Does Location-Based Marketing Work?

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Geofencing is one of the main practices used to perform location-based marketing. According to Wikipedia, a geofence is a virtual perimeter defined within a real-world geographic area.
So when it comes to location-based marketing, a geofence can be established. And then, when a consumer crosses into this virtual boundary, an automated opt-in SMS alert can be sent to their device.
As with any form of digital marketing, the goal of location-based marketing is to capture the consumer’s attention and then covert him or her into a customer.
Although some marketers fear that this form of marketing is a bit too intrusive, others believe that it’s the perfect solution to bridge the gap between digital and physical advertising, while also promoting impulse purchases.

What Works For Location-Based Marketing?

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As I’ve mentioned, location-based marketing is going to be the best strategy for every business out there. For example, this type of marketing strategy isn’t going to work well for brands that operate remotely.
On the other hand, for brands that have an actual physical storefront location, location-based marketing can prove to be an extremely effective strategy. This is because these brands can use their location to create a geofence surrounding their locations.

Then, when a consumer crosses into this region, they’ll be sent an SMS alert.
Because of the fact that the consumer will be near the brand’s location, marketers can be assured that they’ll be delivering a relevant message to the right people at the right time.
When it comes to location-based marketing, this strategy is most often effective for brands such as local retail stores or restaurants.

However, this strategy is also highly-effective for seasonal brands or “pop-up” stores. This is because these types of businesses already rely on consumers’ impulse to buy at certain times.
At the same time, location-based marketing can also prove useful for tourism or travel-related companies, especially when we talk about geo-conquesting.

In essence, geo-conquesting is the act of building an audience based on a competitor’s existing audience. So, for example, if you run a travel agency in Miami, Florida, but you wanted to attract people who have previously traveled to Tampa, you’d be able to build a campaign targeting consumers who’ve previously visited a similar travel agency in Tampa.

In turn, by offering a discount or promotion to those who’ve visited your competitor, you’d be able to attract them to your office location in Miami.
So with that said, let’s now take a look at when location-based marketing isn’t going to work for your brand.

What Doesn’t Work For Location-Based Marketing

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Any marketer who uses a targeted approach knows that every marketing strategy has its own limitations. And of course, location-based marketing is no different.
For example, location-based marketing isn’t going to be a good strategy for brands with locations that don’t get much foot-traffic or those that are situated in densely populated areas.

On one extreme, you simply won’t be able to gather enough data to build an audience if the location doesn’t get enough visible exposure from consumers throughout the day. And on the other hand, if the area is too densely populated, you’re going to have trouble deciphering potential customers from people who are passing through or simply living in that area.
Location-based marketing is also ineffective for brands that sell products or services that can be found virtually everywhere.

In this case, brands won’t be able to benefit from location-driven marketing strategies simply because consumers will be able to acquire their products or services pretty much anywhere they go.
Lastly, location-based targeting isn’t an effective strategy for businesses that deal with sensitive information, such as banks or healthcare providers. This is because there are many policies surrounding these types of businesses, which stipulate how marketers are able to use opt-in permissions.

This simply works to protect consumer privacy. But at the same time, it makes it impossible to run a successful location-based marketing campaign for these types of businesses.

Running A Successful Location-Based Campaign

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Again, location-based marketing isn’t for everyone. In some cases, this strategy simply isn’t going to be effective. And in other cases, there’s simply too much legal compliance surrounding some businesses that make it impossible to run a successful campaign.

But on the other hand, for businesses that are located in high-traffic areas or those that offer unique products or services, location-based marketing can be one of the most effective ways to reach the right people at the right time.
In fact, location-based marketing ensures that you’re serving ads and content to audiences that are nearby and relevant to your business, making it more likely that you’ll be able to gain new customers, and in turn, boost your business’ bottom line.


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