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Location-Based Marketing Has a Ways to Go

By Chelsea Junget

Location-based social networking has been the trendy topic in social media for the past few months. And indeed big brands such as Pepsi, Bravo and Campbell’s Soup have launched location-based marketing initiatives. But is it right for your business?

Research firm Forrester says probably not – with a few caveats. A study released this week revealed that only 4 percent of online adults have ever used such apps. Moreover, only 1 percent of these users update these services more than once per week.  A vast majority, 84 percent, of online adults report being unfamiliar with location-based apps such as Gowalla, Foursquare and Loopt.  Indeed, user data indicates that there’s a long way to go until LBN can claim mass adoption; Foursquare counts around 2 million users.  Considering there are around 75 million adults in the US that go online from a mobile device, the market is still young.

So, should you invest time in location-based marketing (LBM)? Consider these points:

Are the majority of your prospects male?

The Forrester report revealed that almost 80 percent of location-based app users are male, suggesting that gaming, electronics and sportswear marketers might benefit from pursuing LBM initiatives.  However, these folks are influencers; they report being consulted by friends and family before purchases and reference their phones before making a purchase decision.

Are your prospects 35 and under?

Most users are between the ages of 19 and 35. Because location-based networking relies on smartphones (which are predicted to overtake feature phones sometime next year) there may still be adoption hurdles.

Do your customers and prospects care about your location or visit you personally?

Unless you are Pepsi or Campbell’s Soup, LBM makes sense if your customers physically visit your business. For restaurants, coffee joints, theaters and shops, a positive, face-to-face transaction with customers is essential to keeping the business thriving.  Would awarding a free beer to the mayor of your bar encourage loyalty?  Might not hurt to try.  But don’t expect huge upticks in revenue – LBM is currently a drop in the marketing ocean.

Read more on how one non-profit marketer is using Foursquare to increase engagement.

Related content:

1. Foursquare for B2B
2. The Lowdown on Google Buzz
3. Interactive Marketing Will Grow – Is It Right For You?

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