Wednesday, August 26, 2009

Where is the Growth in Location-Based Mobile Marketing?

Technologists are experimenting with ways of leveraging a mobile device's geo-spatial awareness to provide money-making opportunities for marketers. Some propose solutions which send text messages on behalf of physical storefronts to individuals who happen to be passing by. Others propose solutions which display Internet search results containing physical storefronts that are within a proximity to the individuals. The former solutions are push-oriented and the latter are pull-oriented. The former solutions involve SMS (a.k.a. text messaging); the latter solutions involve location-aware search engines. Two different solutions using two different technologies with the same objective: to make money leveraging where a individual happens to be at any moment in time. In my opinion, there is more growth in pull-oriented location-based marketing services than there are in push-based. The reason is less about the technology and more about good ol' human nature.

Push-oriented location-based text messaging is all about impulse buying. When we are out and about, we are typically going from Point A to Point B and on to Point C after that. We have specific places in mind that we are going to, and typically we have more on our itinerary of Places To Go than we have allotted time. We are rushing along at 30 to 40 miles per hour. Pushing a text message clear out of the blue to a person who is whizzing by at that speed assumes that the marketer's message/offer is compelling enough and that the individual is impulsive enough to (a) tolerate the interruption, and (b) to immediately act upon that interruption - not an easy thing to succeed at given the normal human reaction time and the speed the person is moving at. Meandering slowly down the Champs Elysees is just not a reality for the most of us. We simply don't have time for interruptions and that's exactly what push-oriented location-based messaging is all about.

There's only one place where impulse shopping is effective - the grocery store. Merchandisers have it down to an exact science knowing precisely what product to put at what height on each aisle, and also what items to place at the check out counter. Department stores implement the same exact science too. All this to get us to buy things that we didn't originally come into the store to buy. So logically, the only real growth that I see for push-oriented location-based marketing is within the grocery store, its cousin the department store, and its distant mega-cousin the shopping mall.

Research shows that grocery stores are the places where coupon redemption is highest. Grocery stores are also places where people do slow down and mill about the aisles - enough to have both the time and the tendency to react to interruptions. It is within these confines that push-oriented location-based messaging works best. Consumer Packaged Goods brands can send mobile coupons to their opt-in subscribers. CPGs know which outlets carry their brands. It's easy to match up a subscriber's geo-spatial positioning with those of their outlets. Is there a match at any moment in time? Trigger the send!

Shopping malls are other places that are experimenting with push-oriented location-based text messaging. Now, the malls are REALLY places where people do mill around. So naturally preliminary results of their experiments are proving to be encouraging.

As I said before, I believe that the real growth is in pull-oriented location-based mobile marketing. We want to be in control of our shopping experience - that's what the social computing revolution is all about. We want to be in control of our information - what we want and when we want it. We prefer to walk into a store and select our perfumes and colognes ourselves rather than to run the gauntlet of reps shoving scented sample cards in our faces. When we are out and about, it's because we have a specific purpose in mind. We are either heading toward a specific destination, or we are looking for a specific product or service. We're going to whip out our mobile devices and do an Internet search for sushi, gas stations, banks, theaters, etc.

The barrier to entry for pull-oriented location-based marketing is much lower for marketers than it is for push-oriented marketing. The reason is that search engine marketing is a heck of a lot easier to set up than is SMS messsaging. There are already a number of services that provide location-based search not the least of which includes Google, Microsoft, Yahoo, Jumptap, and others.

Regardless of approaches, geo-spatial positioning of people facilitated through their mobile devices presents intriguing new opportunities for technologists, sociologists, and marketers.

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