Why we care about location marketing

What if you could tailor marketing messages at the granular level, based on where your consumers are, in real time? 

For example, by sending an opted-in text message to offer a discount on a product or service when a customer enters a pre-defined location, such as your brick-and-mortar store? Or by reminding your customers that it’s happy hour — and that you offer two-for-one appetizer specials — when they’re near your bar or restaurant during a specific time of day?

Delivering relevant content to target customers is a key benefit that local or location-based marketing brings to the equation.

It’s an essential strategy to look into, especially when you consider that advertising on mobile devices captured the largest share of the market in 2022 at $34 billion. (Overall, spend on digital marketing was a staggering $77 billion.) 

In this article, you’ll learn the importance of leveraging data from users’ mobile devices to create content (advertisements, offers, etc.) that will drive business. 

We’ll go over exactly what location marketing is, walk through a few different location-based marketing methods and explain why it should be part of your digital marketing efforts.

Table of contents

Estimated reading time: 5 minutes

What is location-based marketing?

Location-based marketing is primarily a strategy that uses a mobile device user’s geographic location to send notifications or content tied to that particular place. There are two ways to define locations as they refer to marketing: 

• By GPS coordinates on a mobile device.
• By deploying Bluetooth-based “beacon” technology to trigger ads or alerts when consumers are in places (i.e., stores) that GPS signals can’t always reach. 

You might come across the latter described as proximity marketing, but the major difference is in how location data is generated. (Beacons are physically installed and identify locations within a short distance, such as a store aisle.)  

When you think about the benefits of location marketing, one element quickly rises to the top of the pile and that is relevance. 

Instead of pushing generic ads across channels and hoping that some of it resonates, location-based marketing lets marketers deliver highly targeted messages that reach consumers as they go about their daily activities. 

Generally, location-based marketing works best for brands or businesses with retail locations. For example, a furniture store might send Presidents’ Day discounts to customers who have pulled into the parking lot of the mall in which the store is located during the holiday weekend. 

It’s worth mentioning another important type of location-based marketing that is inbound and doesn’t depend on mobile data. Sites like Yelp will show advertisements and promotions based on user behavior, including the locations and types of businesses explored on the site.

Location-based marketing methods    

There are three primary methods of location-based marketing, which target customers based on where they are, where they have been and where brands would prefer them to be.

Geofencing

Geofencing uses a variety of location services to pinpoint where consumers are in real time and is deployed by software that is contained within mobile apps. It’s important to note that geofencing must be opted-in by the app user — meaning, potential customers must share their locations with the app. 

The geographic area has boundaries (fencing). An example would be a radius around a store, restaurant, neighborhood, etc. When people enter or exit the boundary, marketing actions occur.

Starbucks uses geofencing to send rewards program members discounts on drinks they regularly order when those customers are near cafes.

Geotargeting

Whereas geofencing uses real-time location information, geotargeting creates content that targets consumers based on location. 

So if you’re a local restaurant that wants to promote a new brunch menu, for example, you might build your campaign to target those customers who have been in your restaurant within the last 60 days to drive return business. 

This helps marketers send targeted content to specific demographic groups or those who have engaged in specific behaviors. 

Geoconquesting

Geoconquesting is a location-based marketing tactic that delivers notifications to customers near a competitor’s business. 

In one well-known example, Burger King created a campaign called the “Whopper Detour” to target consumers within 600 feet of McDonald’s locations.

This clever — and popular — marketing strategy used geofencing to send coupons for one-cent Whopper sandwiches to users of the BK app, which was incidentally downloaded a million times over the course of a couple days during the campaign, Adweek reported.  

The benefits of location-based marketing

For marketers, there are many reasons to implement location-based strategies. 

Businesses primarily transacting in person can reach customers when and where they are most likely to be receptive to campaigns:

• When they are in close proximity to your store.
• When events are happening.
• And so on. 

This can easily lead to increased foot traffic and higher sales. Visitor experiences are improved when targeted, relevant content is delivered at exactly the right time. This also helps with customer retention and loyalty. 

Marketers responding to a survey said that improved engagement was one of the leading benefits of location-based marketing. But perhaps most importantly, the strategy offers a window into what customers want using insights gleaned from what they spend their time doing and, in many cases, how much time they spend doing it. 

While website visits can reliably predict consumer behavior, marketers still have to make assumptions. But location marketing can be considered more reliable because it is based on store visits, concert venue attendance, restaurant visits, etc. 

Plus, it can quickly show marketers whether their campaigns have been successful: Has foot traffic increased or decreased? Have app downloads increased or stagnated? 

All that said, there are some drawbacks. First, marketers must only use data from mobile users who have opted in to allow their phones to track their location and the apps they use to access it. 

Privacy concerns are very real and marketers must take great care to handle the data sensitively and ensure it cannot be traced back to any specific individual. Federal and state legislation protecting consumer privacy is always evolving and brands would be well served to not only keep track of the regulations, but follow them to the letter. 

Done right, however, location-based marketing can be an effective part of any digital strategy. 

But wait, there’s more! 

Below are some resources if you want to do additional reading on location-based marketing: