Geotargeting Comes of Age in E-commerce

  |  May 30, 2008   |  Comments

It's finally happening. Geotargeting is melding with e-commerce. How can you harness the power of geotargeted campaigns?

We've been talking about it for years, now it's finally happening. Geotargeting is melding with e-commerce. How you do harness the power of geotargeted campaigns?

Two Levels of Granularity

With geotargeting, granularity and immediacy are important. By granularity, I mean geographic precision. Is it important for you to know what city (or Zip Code) users are in? Or do you need to know their actual street address? In either case, what can you offer users based on this level of knowledge?

Immediacy is a related concept. Do you need to know where users generally are, or is it important to know where they are right now?

For years, companies have been able to ascertain the Zip Code people are in primarily from their IP address or other implicit means. Others simply ask users where they are. Either way, once you know where people live, it's intuitive to begin tailoring advertising based on their location.

For instance, many of Bedbathstore.com's promotions are location based. When I went to the site to research this column, the top banner said, "Welcome NY visitors. Enjoy Tax Free Shopping Today!" Somehow the site knew where I was from (I've never logged into the site or given it any information). It then tailored an ad based on some of the reasons New Yorkers would shop online: high sales tax in New York.

A multichannel retailer with a lot of brick-and-mortar stores could take advantage of this to proactively tell users about stores near them. Additionally, in-store specials specific to the local store could be shown with the Web merchandise. Of course, this requires coordination on the back end that most stores don't have at the moment.

Here's another example: We were hired a couple of years ago by a very well-known beverage company. It wanted to know why so many people were coming to its site without the intention to buy. Through a lot of analysis, we determined a person's motivation to use the site was directly related to that person's proximity to the company's closest store. In other words, users who lived more than, say, 20 miles from a store location were more likely to buy online. Those who lived closer were more likely to look online to see what was going on at a local store, get hours, directions, and the like. In this company's case, being able to target promotions to users based on their address and their proximity to a physical store would prove extremely beneficial.

Going to the Next Level

Apple's iPhone has a location tracker in it. The much-anticipated 3G version of the phone will have even more location-based services in it. So, what can you do based on the immediate knowledge of the user's current location?

When the Palm VII came out in the late '90, some companies set up kiosks that sent infrared signals to the Palm and gave you location-specific information. Vendors at conferences used this functionality to download whitepapers and such to a prospect's Palm.

With real location-based services, any Web site (when loaded from a geo-tracking device) could highlight local store specials, menus, or other location-based services.

Beyond this, one can easily imagine a third-party tool that analyzes the kinds of stores or restaurants you frequent, then makes recommendations when you're traveling.

For instance, a geo-location tracker on my iPhone could sense that I often eat in French restaurants here in New York. The next time I'm traveling, I could ask the application to find good restaurants nearby, and it would weight French restaurants heavier because it knows I prefer them.

Conclusion

Geotargeting works on a number of different levels. If you have the kind of products and services that lend themselves to the immediacy and granularity of GPS-level locations, the infrastructure is now here to support that level of personalization.

On the other hand, if your promotions can be tailored based on general location (and the granularity of the user's specific and immediate street address is overkill), that's good too.

Either way, this dimension of personalization can show dramatic lifts to your business.

Questions, thoughts, comments? Let me know!

Until next time...

Jack

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ABOUT THE AUTHOR

Jack Aaronson

Jack Aaronson, CEO of The Aaronson Group and corporate lecturer, is a sought-after expert on enhanced user experiences, customer conversion, retention, and loyalty. If only a small percentage of people who arrive at your home page transact with your company (and even fewer return to transact again), Jack and his company can help. He also publishes a newsletter about multichannel marketing, personalization, user experience, and other related issues. He has keynoted most major marketing conferences around the world and regularly speaks at Shop.org and other major industry shows. You can learn more about Jack through his LinkedIn profile.

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