Marketing is increasingly data driven. A huge supply chain has emerged, profiling people based on their interests, behaviour and purchases and then serving up ads to them in real time through whatever device they are currently using, wherever they are. Throughout all of this, a key principle is relevance. For an ad to be relevant it is shown only to viewers of the target demographic, for whom the product is known to be of interest, at a time and in a place when they are likely to want to purchase, having opted-in… and so on. The more we think about relevance the more variables come into play. This report from Juniper research identifies some context variables for location-based advertising.
But another key marketing concept is the AIDA funnel. Marketing takes the consumer on journey from Awareness to Interest to Decision and ultimately Action. Generation of awareness is, by definition, broad brush. We cannot know all of a consumer’s preferences before she has shown any interest and she will certainly not have opted in to something she is not aware of. Whilst the digital advertising supply chain increases relevance, it does little for awareness and as ad-blocking increases the disconnect will grow. Marketers will seek better tools above the line. Traditional boundaries (for example between advertising and entertainment) will continue to blur and new disciplines (for example content marketing) will evolve, leading to consumer experiences that are increasingly hard to classify. This Yeo Valley ad gave us an early pointer. What would the TV series ‘Friends’ would have looked like if it had been invented by Starbucks?
So your phone knows where you are. But how valuable is mobile location information and what uses can it be put to? Putting aside B2B operational uses (such as mobile workforce management) for a moment, there a variety of B2C applications. Morey, Forbath and Schoop in their Harvard Business Review article identify 3 main categories of B2C data use. Location information fits into these categories well:
The benefits are distributed on a spectrum between the company and the consumer in varying amounts. For businesses the holy grail is to create apps that feature all three. The better the product, the more likely consumers are to keep using it. More individual revenue streams mean increased profitability (or faster break-even) and a more robust offering that can pivot quickly as business models change, disruptors emerge and the revenue flows take a different path.
Most people realise that their online activities are tracked. One clue comes from the behaviour of adverts. Having been browsing options for a new sofa, whatever page you go to next mysteriously has an ad for a sofa on it. Another clue comes from that ever-present message about cookies which has to be clicked in order for it to go away.
But few realise that their mobile device is keeping tabs on where they are. A survey published in Harvard Business Review showed that only 25% of people realised they are sharing their location when they go online.
On your iPhone go to Settings > Privacy > Location services > Frequent locations. Here you will find a series of maps pinpointing the places you have been to most often over the last few weeks.
All that happened without asking you. You can turn it off of course, if you know it is there in the first place, but it is on by default. Meanwhile Apple is adopting the role of defender of consumer privacy in its letter to consumers over its tussle with the FBI.
Location information can make apps indispensable for consumers. A simple map turns into a route planning tool when location data is added. But companies will need to ensure that consumers understand these benefits and how the information is being used – for people to choose to opt in and not out.
Andrew Keevil assists technology companies with strategy and marketing, specialising in new proposition development.