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Proximity Based Marketing and LBS is a Growth Opportunity

I’ve mentioned in previous blogs that traditional forms of Advertising are shrinking. There are many statistics backing this up. There are many statistics backing this up and in Asia Pacific, Carat, for example have forecast a 5.8% decline in ad spend for this year. Obviously the economy is a factor in this result, but it also signals a change in advertising behaviour as people are paying less attention to traditional forms of advertising. Many people now have products such as MySky and Tivo is almost here. These products make it very simple for people to avoid watching TVC’s because the can fast forward their recorded TV programmes. TVNZ announced that they were laying off 90 people as a consequence of a $25 million reduction in advertising revenue. The same applies with radio where many people are now opting for their iPods to listen to their favourite music instead of tuning in and being forced to listen to radio ads.

In my opinion, this doesn’t mean that people want to avoid advertising, specials and promotions altogether. They want them to be more relevant. ZenithOptimedia have forecast far greater drops in Ad expenditure, 11% drop in magazines, 10% in radio, 5.5 in TV, but around a 10% increase in Internet Advertising. So traditional forms of advertising decline, but Internet advertising is on the rise.

Why would that be? People are using the Internet far more these days, which takes them away from traditional media, but the key element to me is relevance. In the World Wide Web, it is far easier to ensure that advertising is relevant to the search or type of site that people are visiting. It also offers a great opportunity for call to action with Click Through, which is of course where Google makes the bulk of its income.

The ability to have people opt in to various services that are relevant to their interests and needs, their current time and place means that the offers will be welcomed and will have a far greater sales conversion rate than with traditional means of advertising and promotion. This is where the opportunity arises with Location Based Services (LBS) and Proximity Based Marketing.

The issue isn’t that people hate ads, specials, good deals and information. The relevance needs to be around space and time. I would welcome a Speight’s Mates Happy Hour electronic coupon, when I am walking past a bar, with a 2 for 1 offer on a Friday evening after work. But I probably wouldn’t even see a printed coupon in a magazine.

I’m sure tourists would take advantage of a special offer to a half price jet boat ride when they are on holiday in Queenstown, when they are within a kilometre of the boat on a sunny morning, than if they read an ad in the plane on their way to New Zealand. The tour operator gets a full boat and all the passengers have more fun. It’s timely, its based on their immediate location and its relevant to their current situation.

Many people think that the technology isn’t ready, but according to a story in ITWire, compound growth of GPS in mobile phones is over 49% and one of the major drivers in the proliferation of SmartPhones. According to Mobile Marketing Magazine, despite the economy, the penetration of SmartPhones grew by 33% to February this year. The traditional definition of a SmartPhone comes from Operating Systems such as Palm, Symbian and Windows Mobile, but if you look around today, many of the mobile apps in those phones such as Contacts, Diary, Email, Still and Video Camera are now standard in pretty much every phone and with the low cost of GPS, that is now being added at great speed.

With Software Development Kits being made freely available for the popular brands and models of phone, this is a perfect opportunity to become familiar with the web services and API’s available from GeoSmart and outlined in previous blogs. All you need is a good idea and a little market research. Of course GeoSmart can offer you a Developer Agreement which gives you free access to any tools you need during the development process.

You can find more information on the Developer Page at http://www.geosmart.co.nz or email info@geosmart.co.nz

developer-page1

April 21, 2009 Posted by | Agencies, geosmart, GIS, gps, lbs, location based services, map tools, maps, Marketing, Mobile maps, new zealand, new zealand maps, proximity based marketing, Sales, satnav, Uncategorized, web maps | , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Location Based Services and Agencies

Now that the Awards are over, at least for a few months,  I’m hoping to have a little more time for blogging.

I have been talking to a number of agencies over the last 3-4 years about LBS. I don’t know whether it was me or that the bright lights in this agency space seem to all go offshore, often within the same company before we get to do anything together. Companies like The Hyperfactory have been doing some cool things on the edge of LBS, but it seems that all their cool stories these days are also overseas. It was great to see them enter the awards this year, though and they have a Finalist Award to add to their trophy room which must be bursting at the seams.

The types of LBS applications are very wide and we could have had many more categories in the awards. The thing is that location is simply what it sounds like. It is about where you are and what you are doing wherever you are. It could be about having a pizza delivered to you on the beach, or about catching the bus to Get Somewhere. It could be about going on a treasure hunt or finding a bar or cafe nearby afterwards. Location is ubiquitous, just as your mobile phone is. You are always somewhere. If your phone knows where you are, then it can help you find things, places and people. It can help you be entertained, help you with your sport or hobby, provide you with localised information, the list is infinite.

So back to Agencies. LBS adds another vehicle to incorporate into Marketing and Advertising Campaigns. It gives them the opportunity to come up with fun and compelling ways for brands to interact with consumers and other customers at the time and place that has the most relevance. Traditional forms of advertising are very often scattergun and rely on high levels of repetition to realise a call to action. Traditional Direct Marketing (DM) considers 5-7% response to be a good result. In my book that says that over 90% of the DM spend is wasted. Why is that? Because most people are not open to buy or looking for their products at the time they are ‘exposed’ to the promotion. In addition to that, most people are smart enough to look for what they want, when they want it. They will then either check out their favourite stores or use Google to find the products they want.

The other huge resource that people use is Word of Mouth Marketing, which these days means talking to people close to them, or just as likely today, to use Social Networking sites to ask the opinion of their ‘friends’.

So what can agencies do? They can come up with campaigns or solutions that are relevant to people’s interests at the time and place that is relevant to them. The time and place to tell someone about the great new winter fashion that is in their favourite clothing store, is when they are entering the mall. The time to tell people about the new Stephen King book is when they are near the bookshop.I’m going to talk a lot more about these concepts in the coming days and weeks, so why not subscribe to this blog with your favourite RSS aggregation app  like iGoogle.Just to put things straight, LBS is not something that will replace other forms of marketing, it will augment the campaigns, reinforcing the messages and making them relevant and encourage an immediate call to action. It is an enabler and a tool that will help brands fine tune their target marketing and improve its effectiveness.

I will also explain in future blogs how the tools and data that GeoSmart Maps has, can facilitate the creation of the applications or features of LBS from a laymans persepctive. I’m not a developer, but what I do understand very well is what each tool does and how it can be implemented to achieve the results you want. So if you want to know more, watch this space, bookmark it or get yourself an RSS Reader.

Also, do feel free to comment or ask questions.

A PAcked Room of LBS Enthusiasts at the Location Innovation Awards

March 25, 2009 Posted by | Agencies, awards, competition, competitions, geosmart, gps, lbs, lbs games, location innovation awards, maps, Marketing, new zealand, proximity based marketing, social networking, viral marketing, web maps | , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment