creep

Geo-Location, Geo-Fencing & Creep Factor: The Future of Location Data and Mobile Advertising

  |  October 11, 2013   |  Comments

Technologic advances have allowed interactive mobile engagement through ad retargeting and location based push solutions. However, privacy concerns and a lack of understanding among consumers about how retargeting works hold us back.

creepMobile is all around us, digital technologies changing faster than any mere mortal can track, and marketers are now pushing out ads to mobile users in highly effective ways.

The rise of smartphone usage, GPS-enabled devices and location-based services, smarter apps, and man's seeming desire to share every move publicly has resulted in a massive amount of geographic- and behavior-based data. Of course, it can be leveraged using the latest technology.

Technologic advances have allowed interactive mobile engagement through ad retargeting and location based push solutions. Marketers that use these strategies to create meaningful connections between brands and consumers will win the day. However, although marketers are ready to utilize these advancements, privacy concerns and a lack of understanding among consumers about how retargeting works hold us back.

Stepping Inside the Geo-Fence

At this point, it is no longer new to many mobile users that, as they pass a coffee shop on the way to work, their smartphone beeps and a coupon offer pops up with savings on their favorite beverage there. That's because the coffee shop created a geo-fence--a virtual location-based marketing corral--specific to the advertiser's store.

However, consumers might also receive a similar message from a competing shop, because that advertiser's geo-fence includes its competitors in pursuit of a geo-conquest, where the advertiser targets (and attracts) people who are shopping at competing businesses.

This capability is not new, but it's growing. During a recent "innovation tour," my colleagues and I met with a large number of digital startups and established firms in search of better ways to connect our brands with consumers. Most of the startups are in the mobile space, talking about push marketing through geo-fencing and mobile location data.

Geo-fencing is already moving past traditional location-based applications and check-ins to embracing a full range of smartphone capabilities. Retail, push marketing/notification, local search, social networking, and more will all come together to connect consumers with brands and offers, almost anywhere, at anytime--well, anywhere that digital fence is drawn.

The possibilities are endless; marketers can create highly precise audience profiles. So why isn't this gaining more (virtual) ground?

Big Data and the Creep Factor

As search marketers, we understand how data-driven and location driven targeting works. However, most consumers are not aware of the mechanics and wonder why advertisers seem to be spying on their online activity. This "Creep Factor" keeps some marketers from fully exploring location-based mobile marketing.

For example, a consumer researches the newest plasma TV models via Google, video reviews, social connections, and online consumer reports. He decides on a product, then researches local retail outlets where he can make his purchase.

As he walks into a store, he receives a push notification from one of his apps, informing him that he can get this TV for a better price at a store he had been to before. This can all feel sort of creepy for consumers who don't understand why their computers (and now, smartphones) are showing them messages and offers about the exact products they just researched.

One of the key goals of any brand today is to create meaningful connections with consumers at the moment that matters most. Mobile geo-fencing enables this. In spite of having all this great technology at our fingertips, marketers are still skittish about using it, partially, I believe, due to the Creep Factor. We need to address this.

The Generational Creep Factor

Mobile geo-fencing increases that feeling of Big-Brother-is-watching for certain audiences; it's up to marketers to acknowledge this and help consumers get over this by being more transparent at the start of the consumer-brand relationship. In short, we need to educate them about what we are doing and how this will enhance their lives (save money, helpful tip, etc.).

Although consumers have contributed to their discomfort by downloading location-based apps and constantly checking in, the Creep Factor differs across generations:

  • The Gen Y/millennials share, suggest, and expect to be sent relevant coupons upon entering the store. No Creep Factor.
  • The Gen Xers, diehard Facebook and smartphone fans, embrace the technology (and ad retargeting) once they understand it, or it becomes mainstream. Low Creep Factor; they just need to understand it.
  • Baby boomers/older generation are leery of, scared of, or do not understand remarketing. High Creep Factor.

In order to understand these audiences better, I often look at my own family.

Mom/High Creep Factor: I recently showed her a feature in the iPhone that displays your most frequently visited locations. She believes it's an extreme invasion of privacy and illegal, and asked how that information is being used. She often calls to ask me why sites are showing her banner ads relevant to her and tells me to stop doing that.

Wife/Low Creep Factor: My wife consumes everything digitally; her cookie trail is beautiful. She shares everything, visits social networks on a daily basis, and has lots of apps that track data-location, frequency of visits, and her purchases. She researches and shops online across multiple channels and generates online conversions. However, she does not expect anything from ads and does not interact with them that much.

Daughter/No Creep Factor: At 15 years old, she has every app there is and allows them all to share anything online. When she goes to a movie site, she expects the right movie to be listed; when she checks in to a coffee shop, she expects a coupon. She actually calls me when she sees an ad that is not relevant to her.

My wife and my daughter are perfect audiences for geo-location-based data. My daughter would be happy about a lot of one-way offers and expects them. My wife, on the other hand, would only engage if there is some sort of value exchange, like a coupon or helpful tip. They have come to expect this.

My mother would probably turn off her device and call to tell me to stop doing that.

Geo-Targeting Applications for Highly Relevant Marketing

Geo-fencing fosters engagement with customers in the most highly contextual, personal, and relevant channel possible: their mobile devices. App-centric strategies allow push messaging (Go here, try that, save now!) that is meaningful to consumers, because it's built on their profiles, preferences, habits, and experiences. It's the most targeted advertising a brand can do right now. Hyper-local meets hyper-relevant.

In the case of the plasma TV shopper, a television retailer can create smart geo-fences around its competing stores so that when the consumer enters that geo-fence with a smartphone on, he receives a message offering him a coupon to purchase the TV during a special sale at the advertiser's location (rather than the competitor's). The consumer goes to the advertiser's store and the geo-fence has now become a geo-conquest.

In my own life, I welcome geo-targeting and geo-fencing. I want to become a geo-conquest if I receive relevant content, because it makes my life easier as I travel every week on business.

  • I would love for my TripIt app to talk to my Open Table and Yelp accounts to give me great dining recommendations based on my past behavior. The apps know I am in New York City every week, they know I go to dinner there every Monday-why not recommend restaurants to me? 
  • When I arrive at the airport, a mobile taxicab coupon would be great.
  • Upon hotel check-in, send me ads for nearby restaurants.

Many consumers are receiving this benefit at shopping malls; they download the mall app and receive location-based specials from the local merchants as they walk through the mall.

Combating the Creepiness

As marketers, we must educate our audiences about what we are tracking and how we are using that data to benefit them (and, of course, to benefit the brands). Transparency is key to mobile search marketing success, in order to overcome consumers' squeamishness about how all that big data is used (and to enhance their understanding of the process).

If we inform and ask consumers directly if they would like to receive recommendations, rather than just intruding on their devices, a lot of the current and next generation would be happy to share information in order to receive more value. Geo-fencing will get their attention in a positive way and lead to geo-conquest, as consumers steer away from competitors and take advantage, instead, of the advertisers' special offers.

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ABOUT THE AUTHOR

Benjamin Spiegel

Benjamin Spiegel is the managing partner, vice president of innovation at Catalyst, a GroupM agency. He is a digital advertising veteran with more than 14 years of experience in media, data, and technology. For the past three years, he led the search practice across the GroupM Network; today, Ben leads the innovation practice at Catalyst providing thought leadership and innovations for its Fortune 500 client brands.

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