In early 2017, the Pew Research Center released some interesting findings related to mobile usage. Not surprisingly, 95 percent of Americans own a cell phone of some kind. But, one in 10 are “smartphone only” users of the internet — meaning they don’t use traditional avenues to go online.
The ubiquity of smartphones provides wealth of location-related data, which marketers are using to explore new avenues for meeting the shifting needs of their audiences. One method, called geotargeting, has proven especially useful for both businesses and consumers. However, it has a potential dark side. As the American Marketing Association’s Hal Conick noted, it is the “thin line between knowing them like a friend and knowing them like a stalker.” If marketers are going to maximize its effectiveness, they need to understand how geotargeting works and how to create a balance between personalization and surveillance.
What is GeoTargeting?
Geotargeting expands the idea of tailoring content to a particular target audience by delivering content to a user based on his or her geographic location. Businesses can geotarget using a city’s boundaries, ZIP codes, GPS signals and other data.
Businesses gather location information through a consumer’s smart device. According to Lauryn Chamberlain, of GeoMarketing.com, “Each person’s location has something to say about their environment and their mindset at a given time … which makes it easier to deliver relevant ad content. The more relevant an ad or offer is, the more likely it is to drive what the marketer wants: a sale.”
Consider an example of geotargeting in practice. Several years ago, Denny’s teamed up with location ad platform xAd in an effort to try to boost dropping sales. The partnership started by using geotargeting to remind customers near a Denny’s of an ongoing promotion of unlimited pancakes. After finding some success with the strategy, Denny’s and xAd refined their geotargeting to not only include people near a Denny’s, but also people near a Denny’s who had visited the establishment before.
The result, a “Build Your Own Skillet” mobile ad campaign, increased in-store visits by 11.6 percent. A later, similar campaign increased in-store visits by 34 percent.
Personalization Vs. Surveillance
When incorporating geotargeting into their strategy, marketers attempt to strike a balance between personalization and surveillance. Forbes contributor Michael Jones argues that “Consumers want personalization; they want a frictionless journey as they move between channels and devices; and they want experiences that improve and enhance their day-to-day lives.” Geotargeting allows brands to send tailored, personalized messages to their consumers.
Jones described two particular brands that use geotargeting effectively for personalization: Starbucks and The Container Store. These brands personalize the consumer’s experience by understanding why consumers rely on smart devices so often: convenience.
Starbucks has a Mobile Order and Pay feature included in its app. Using geotargeting, the service allows users to order ahead before stopping into the nearest Starbucks location. Mobile Order and Pay enhances the coffee-buying experience by allowing customers to quickly enter and leave so that they can continue with their day. Such accessibility and convenience can also encourage customers to return.
The Container Store takes the personalized convenience of Starbucks Mobile Order and Pay a step further with its GoShop program. Customers make purchases online and schedule when they will be at a physical Container Store location for pickup. When the customer arrives at the store, geotargeting alerts the store and an associate brings the order out to the customer. Customers never have to leave their vehicles.
But geotargeting has also ventured into murkier waters that are reminiscent of surveillance. Writing for The Chicago Tribune, Amaina Elahi described how a social-media monitoring platform called Geofeedia gave location information to law enforcement, a major breach of civilian privacy. While Geofeedia’s CEO claimed the platform was not “created to impact civil liberties,” the company later announced that it was changing directions after the scandal. In this case, geotargeting was used to share personal information that made many people uncomfortable.
How to Find the Balance Between Surveillance and Information
Much of the difference between geotargeting and surveillance likely comes from consumer preference and understanding. Audrey Hartland of DMI suggests that since consumers may not understand how geotargeting works, they may “feel uneasy when they see an ad for a product they just viewed.” And while Hartland adds that 70 percent of consumers are willing to share location data, many consumers 35 and older view location targeting as a breach of privacy.
In his Forbes article, Jones suggested a solution to finding the balance: “Give your customers the control.” Rather than spamming consumers with unwanted content or breaching their privacy, Jones said that marketers should put consumers in the driver’s seat: “Allow them to choose where and how frequently you send them messages or notifications.”
Jones further noted that brands can reduce the discomfort surrounding geotargeting and build brand trust by “educating [users] on exactly what you are doing and how this will enhance their experience.”
In geotargeting marketing, the safest path for both brand and consumer is an honest one. As long as brands are transparent, both can enjoy the benefits of geotargeting and continue to adapt the marketing industry to shifting demographics.
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