What does LBS have to do with advertising media?

The world of information technology and communications (ITC) is changing at a rapid pace and some of the changes have been subtle and unexpected. Some things take a long time for people to get their heads around, but sometimes they just start doing things and take them for granted. Social networking is a classic example that businesses are now trying to understand how they can get involved.

Technology is changing the way we live, the way we interact with each other and the way we interact with the businesses and services we enjoy.

Last week there was a news story, saying that TVNZ is planning to lay off 90 staff, as it moves to save $25 million. In it,  Chief Executive Rick Ellis was quted as saying that the layoffs represent approximately 25% of the costs reductions needed due to falling advertising revenue. I don’t recall who it was but someone recently was telling me that they never watch TV advertising but one evening he and his wife decided that the would watch the TVC’s. The next morning he asked his wife what brands were represented in the TVC’s they watched the previous night, she couldn’t name one.

People can avoid TV commercials by recording their programs with MySky and now of course Tivo has also launched in New Zealand. I don’t know if it works in New Zealand, but in the US I believe that you can program your Tivo to not even record advertisements at all as there is an encoded message that tells it when advertising starts and ends.

Around the world there are newspapers closing down, going out of business because not enough people are buyig them any more, which means they can’t sell enough advertising to keep them going and people are choosing other media such as the Internet to find their news.

Huge numbers of people are favouring their iPods and other MP3 players instead of listening to the radio. People are buying less music CD’s because they have access to other media such as iTunes, YouTube and MySpace to mention a few legal ways they can access their entertainment.

Then of course there is mobile and virtually everyone has a mobile phone and sometimes two.  The days that your phone was only for voice and SMS are long gone. Today on our mobiles we can check email, take photos and post them onto websites such as Facebook, read or watch the news, Instant Message, check our social networking applications and more.

Then there is the location component. A couple of weeks ago I was able to show my location using Google Lattitude on my mobile to my friends. I was able to monitor my pace and calorie burn on Allsport GPS and post photos that I took on my phone straight to my Facebook page while I was running.

So back to the original topic, what does all that have to do with advertising media. Simple really. If your phone knows where you are and you opt in to services that tell you about things you want to know about, relative to where you are and when you are there, you can be offered all sorts of relevant goods and services that you will want to know about and take advantage of.

This afternoon I was talking to a partner about their participation in a 100km bike race. The bike race would have been sponsored by industry leaders including bike manufacturers, sports drink and supplement brands and other partners. The event and the activity in general takes place on the road, so is very location oriented. If you register for the event, a brand would be very keen to make offers to you. Because you are in the event, they can market very specifically and know that their likely response rate is going to be very high. A LBS application could involve maps and directions, but also relevant Points of Interest. Prior to and after the event they could include where to buy a new bike or bike accessories, or where to get a pre-race service or gear check.

It could include where to stay, where to get healthy food, where to train, where to buy your drinks and supplements, a message as you come near a cycle clothing shop of promotional deals, with an electronic coupon displayed on your mobile phone. It could show you where you can get refreshments on the way or even where to find a public toilet. It can show you where the start points are and a route for the supporters to be able to go from point to point without running into the cyclists. It could help companies or supporters get to a cyclist who has gear damage. Prior to or after the event it could even provide a social network to help you find training partners in different parts of the country, for example if you are away on a business trip and have your bike with you. Sponsorship, brand association can be tied to actual sales promotions, which are triggered by people who have opted in to a service who are close to the store or place where a service is available.

These sorts of service would be opt-in, which means that people sign up to a service and specify when and under what conditions they may be contacted on their mobile. Because the service offers benefits to the user and the user is specifically interested in the sport and active at the time, there is a far greater likely response rate than traditional scattergun media advertising which is traditonally very costly.

GeoSmart of course is able to display maps, provide turn by turn driving directions from anywhere to anywhere in New Zealand. It has a Points of Interest Web Service which can help geocode and display relevant locations like shops, cafes, public toilets etc and the Proximity Tool can assist in identifying relationships between POI which could for example be an alert when a cycle rider is within a kilometer of a bike shop using GPS or other tools to identify the location of the cyclist. This could be combined with a social network, registration for an event, an interest group or perhaps an exclusive service for an event, or the customers of a particular brand, for example you can use this service for free, but only after purchasing an Avanti bike.

If you are interested in concepts like this, please subscribe to this blog, and feel free to leave comments or questions. if you want to talk to someone about any of these ideas, please email info@geosmart.co.nz.

Proximity Based Marketing and the Location Innovation Awards

So what’s the big deal with Proximity Based Marketing? We have included this category in the Awards because it offers a huge opportunity for companies to engage with potential clients in a way that adds value to them. There are different ways of doing proximity marketing, our interest is specifically mobile and opt-in. That means that you only participate in a campaign if you chose to and in doing so there are some critical criteria. I will explain those, but first let’s get an idea of what the concept means, because a lot of people don’t really understand the concept.

Proximity based marketing is about getting messages, offers, invitations and communication about goods, services, activities based on where you are, i.e. they are availble close to where you happen to be. There are two main methods for doing this from a mobile persepctive, which is our interest in this competition. One is around targetted SMS messages, being the easiest technology to use currently and the other is Bluetooth. Unless there is an opt in component, Bluetooth is unlikely to be supported in this environment, but it could be. Bluetooth is really about short range communication between devices, say up to about 10 metres. It is a short range radio frequency concept that normally requires ‘pairing’ that is both devices agreeing that the other device is a trusted device to communicate with. So in most cases you can not communicate with another Bluetooth device unless A/ It is switched on (using a fair amount of battery power); and B/ It is open to communication with other devices in ‘Discoverable Mode‘ ; and C/ It has registered the other device as one it will communicate with. This is how you can have a Bluetooth headset for your phone and not listen in to calls that other people in the vicinity are making who are also using a Bluetooth headset. Free and open communications are not receommended because of the risk of virus attack.

So the concept, which according to BlueTomorrow is ‘all the rage’ of Bluetooth Proximity Marketing means that you have no control over who sends you messages. You may think that’s a good thing, but the last thing I want as I walk past shops in the mall is to receive unsolicited messages asking me if I would like information or perhaps  an electronic coupon for products which are in the store. If they have deals, let them put some good material in the shop window.

Another concept which also isn’t in the scope of the competition is applications that require you to do something based on a billboard or other Point of Sale. In effect they didn’t contact you, but they persuaded you to do something when you happened to be somewhere. An excellent example is the UN Voices project put together by The Hyperfactory, who are a worldwide expert company in wireless and mobile marketing in Australia. The concept was that you take a digital photo of a mouth on a billboard and then get sent an audio message of the person who’s photo you took, telling you about their lives. This and other great examples of their work which are very inspiring can be seen here.

So the concept we are talking about goes like this. Through a form of marketiong, you convince people to opt in to a service, it could be via a brochure, a message on product packaging or on a label, or perhaps through a website or billboard. You will allow the service to send you messages based on your interests in products or services, which will probably be SMS or Text Messages. The messages might contain an offer, an electronic coupon, or ask you to do something.

To me the concept of being offered special deals for things that I am specifically interested in at a time that I would like to receive it is a great idea. For the marketing company if they can find willing subjects it is also great because it is targetted rather than the normal scattergun approaches. How much junk mail have you received in the recent build up to Christmas sales mostly about things you weren’t interested in? What would be the ad drop to sales conversion ratio. A very good DM (Direct Marketing) Campaign would get 5-10% return, the average would probably be less than 4%. If you know you can target people that are interested, you would get a significantly greater result.

The thing is, you don’t want SPAM solicited or not, so there need to be rules and if the rules aren’t followed, the entire industry could be set back for many years. So for the competition our rules are:

1. You must clearly understand what you are opting into.How many messages are you likely to receive.

2. You need to have control over when you will receive messages. For example for a ‘Happy Hour Club’ You might decide you only want to receive messages on Friday and Saturday nights and only between 6 and 10 PM.

3. From a proximity perspective you may only want to receive offers when you are within a km of a participating bar or club.

4. It needs to be easy and clear how to opt out. People might try something once in a while, but there are many services such as subscription newsletters where it is very difficult to figure out how to opt out of the service.

It’s interesting when you start searching for existing applications, how few actually exist so far, while the web is full of sites suggesting what could be done, most of the companies who could be doing it aren’t and wouldn’t know where to start, which is why this competition is so important. So here are a few ideas:

• BP Petrol stations in New Zealand sell coupon books which give you two-for-one deals on coffee. The sell car wash services with coupon books so that your 5th car wash is free. You have to go out of your way to get them and most of the time when you need them they are not around. They generally do not work very well in motivating people to use the service. Often there are competing gas stations accross the road and people have a choice where they go. At commuting times of day most traffic is driving one one side of the road, the gas station on the other side misses out. Why not add a service for people to opt into so that they can be offered special deals when they are in proximity of petrol stations at quiet times. It could be a free coffee with $60 worth of petrol, it could be a half price carwash etc. I don’t know too much about the petrol industry but people sure like a deal. Why not give them one when they are close by. Why not get them to top up their gas now, when they are near your business, especially if they weren’t planning to stop.
• Imagine you have signed up for your favourite retail clothing chain, given them your favourite colours, style and size. They know when you are walking into the mall, either because your phone has told them, or because you texted the name of the mall to the short code on the sign at the entrance. Now you get a text message saying that they have got something similar to what you loved last summer and if you come in now, you will get a 2nd garment for half price and you can forward this to 3 friends who will get the same deal.
• Still in the mall, you walk past the Music Store who send you a message saying that your favourite band’s new album has just been released and another group who is quite similar also have a great new album and if you come in and buy them both now, you will also get a free collector T-Shirt.
• How about renting a camervan or motorhome and subscribing to travel deals as you drive on your holiday. As you travel around the country, you get SMS alerts from attractions and activities within say 10km of your location. You drive into Waitomo to go on the boat trip the the underwater caves, but the day has been quiet for the Black Water Rafting Trip so they send you a special deal where the 2nd person goes for free. As you drive further towards the end of the day and are thinking about where to stay, you get a text message from the nearby Top 10 Holiday Park with an offer of a 20% disccount on your meal at the restaurant next door.

The key to this concept is that the offers are targetted and the recipient has control of when, how often and what type of deals they are offered and have the ability to stop them as quickly as sending a text message. You might subscribe indefinitely or just for the 5 day trip in your motorhome. In many cases these deals might also include aspects of other categories such as LBS Games or Social Networking. The key is that it targets you because you are interested in or a regular consumer of the goods and services, buit most importantly because you receive the deals when you are in the proximity of the offer, they are welcomed. You don’t want to receive an electronic coupon for a petrol discount if you are on the beach or out on the boat, you want it when you are driving past. You want something that is a really good deal.

Hopefully I have given you a few ideas for applications you might like to come up with for the competition. If you are not elligable or don’t want to participate, please feel free to share comments or ideas on this blog that other people might be able to pick up on.