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Location-Based Marketing Comes of Age

By Shalini Raghavan

In the 1960s fictional universe of Star Trek, Capt James T. Kirk could flip out his communicator from an alien planet and speak to a crew member aboard his orbiting spacecraft, the Enterprise. The communicator looked much like a modern day mobile phone and allowed communications across astronomically large distances.  That was science fiction.

Fast-forward to 1973, inspired by the communicator, Martin Cooper, an engineer with a small company called Motorola, invented the first mobile phone. The rest of the story was history … this device led the way for mobile communications across the globe.

Today virtually everyone has a mobile phone, and it is estimated that by 2016, there will be more than one billion smartphone users worldwide.  The wave of mobile innovation has acted as a springboard for a variety of location-based services. Today location-aware services are even available on physical objects with embedded sensors—from roadways to pacemakers.

Mobile represents a significant untapped opportunity for marketers. Consider that by 2015, consumer brands will be generating 50 percent of their web sales through social media and mobile platforms, with a projection of $30 billion annual revenue.

This is where Location-Based Marketing (LBM) comes in, combining real-time interactions and location with relevant messaging.  LBM has become synonymous with Foursquare, but it is so much more than checking in and becoming mayor of your local Starbucks, or scanning a QR code to get more information about a product or service. With LBM, you can opt in to a mobile app that informs you when you are inside an area of interest, known as geo-fencing. For example, your favorite sandwich shop tells you when you are near a store, and what the special is today.

Today, geo-fences are expanding beyond store boundaries. For example, popular retailer The North Face has extended its geo-fences to cover hiking areas, parks and locales that are popular with its customers. The North Face has ensured that they can get their message out to consumers even when they are not shopping.  And The North Face isn’t texting customers with jacket sales when they're climbing Half Dome, either. The messages are much more context aware, useful and conscientious of how many times a consumer wants to hear from The North Face.

LBM is the final frontier of the mobile revolution. As long as smart privacy policies are in place, the possibilities for mobile marketing are only limited by a marketer’s imagination and how it is implemented.  In my next blog post, I’ll look at some practical challenges and considerations in implementing LBM. Stay tuned.

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