Location-based retailer advertising is evolving. However, according to the latest market study by ABI Research, businesses are now being primed to spend $1.8 billion on this emerging category by 2015 -- as part of overall mobile marketing budgets.
"It's still early days and there's no single right approach to location-based advertising," says ABI practice director, Neil Strother. "This remains a very fragmented market that is full of experimentation."
Nonetheless, the options are becoming more clearly defined. Location-based ads are enabled by three sets of technologies -- GPS, Wi-Fi, and mobile phone network Cell-ID.
According to ABI's assessment, the most successful campaigns use a mix of some or all of these technologies -- depending on the product or service, the region, the consumers, and the location accuracy required.
New location-based services are catering to mobile shoppers. Some are check-in services, such as Loopt, Gowalla, Foursquare, and Facebook Places. Others, such as Shopkick, use an iPhone app to reward shoppers just for visiting certain stores.
But, do consumers really want their physical location to be tracked?
"Some might be put off by the Big Brother aspects of this," says Strother. "But, it's really about the value-exchange: if you care about getting discounts or being rewarded for shopping, is the value-exchange high enough so that you'll accept having your whereabouts known to these companies in return for the benefits?"
Strother defines the basic steps for the prospective location-based advertiser, as follows.
Establish your marketing goals. Analyze your customer's mobile and location habits and develop your location approach. Choose location partner(s) and determine the best technologies for your brand. And finally, execute your geo-targeted campaign, measure the results and then refine the process.