Is Location-Based Advertising Effective?

April 09, 2010 | Willis Wee http://www.penn-olson.com/2010/04/09/is-location-based-advertising-effective/

location

The mobile phone is slowly becoming one of the hottest marketing platforms.

From simple SMS advertising, mobile advertising has slowly evolved to support location-based advertising.

SMS advertising is known to be an intrusive push advertising strategy. Location-based advertising, on the other hand, employs a pull strategy; allowing users to voluntarily obtain promotional messages based on their location (say within 500m radius).

While it sounds all rosy, does location-based advertising really benefit businesses? Below, we play both the angel and the devil to help you gain a more holistic view on this subject.

Location-Based Ads: Great For Restaurants

Imagine yourself in the city of Singapore and have no idea where to dine. In that case, location-based restaurant ads could come in handy. BuUuk, a location-based food app is a great example. It provides food ratings, reviews and exact locations of the restaurants. But what if you’re not looking to dine? Can retail stores benefit from location-based ads? It is probably not as effective. Maybe an app that informs us about promotions nearby might be welcomed. Like any other marketing channels, the effectiveness varies with the nature of the business.

We don’t check location-based ads that often

There are several location-based advertising applications available, but besides showing what’s available nearby, along with its offers, there isn’t any other motivation to use the apps. If they don’t add much value to the users, usage rate and your ads impressions would be low.

Foursquare Does It Well

Speaking about creating value, Foursquare, a location-based social networking app, is the expert. The app allows users to connect with friends, and have fun with its simple badge collection game-play that motivates users to check-in (e.g. the swarm badge). “Location-based advertising” comes in the form of reviews created by Foursquare users of a particular location, and promotions offered by businesses to attract users to visit or share reviews. Reviews are basically tips given by other users about what to do or try, and what to avoid at a particular location. Because they are user-generated, they also tend to be more trusted.

photo-1 foursquare-mayor-special

Conclusion

Although targeting consumers based on location seems favorable, it is crucial for businesses to understand that it is not necessarily the most effective mobile marketing platform. There are multiple ways to engage your consumers through the mobile device. SMS advertising and application advertising, especially for the travel-related industry, could be more effective than location-based advertising.

If location-based advertising is really crucial for your business, perhaps Foursquare would be a good tool to start with. Its user friendliness, social element and statistics make it an attractive marketing platform (Check out: 5 ways To Leverage Foursquare For Business).

Most importantly, regardless of the platform you use, ROI (monetarily or non monetarily) is priority.

foursquare stats