Opinion

GPS isn’t the answer when it comes to location-based marketing

With GPS still only accurate to 10 meters and failing to account for height, marketers need to start figuring out novel ways of implementing their location-based marketing strategies. PoweredLocal's Gary Tramer explains.

The other day I was in a bike store in Melbourne buying replacement tyre tubes. At the point of purchase the manager asked me: “What’s your postcode?”

In the era of location-based marketing, some might think this is pretty lo-fi way of extracting information about the business’ customer base, especially with Amazon moving in.

In fact, the data underpinning much location-based marketing remains poor enough that asking a customer ‘what’s your postcode’ is still effective. Meanwhile, Amazon doesn’t have a bike store for me to walk into.

The lesson is that smaller companies that appreciate the shortcomings of location-based data and offer value to their customers in exchange for their data at the point of sale can still compete with the big boys.

Global Positioning Supposition

Everyone thinks GPS is insanely accurate. It’s not. On a longitudinal and latitudinal basis, GPS accuracy is at best five metres. Some people think that number is closer to 10 metres.

Now that might sound accurate, but imagine trying to market with that margin for error.

Think about the number of bars you’ve been into that were five metres wide. Your phone is just as likely to attribute you to the McDonald’s next door, even if you are standing smack bang in the middle.

Uber uses GPS to provide a (mostly) accurate service

That’s why Coca-Cola still puts sponsored fridges behind the bar. As long as the owner can drum up foot traffic, Coca-Cola can reliably locate someone near their point of sale.

GPS also offers nothing in terms of height off the ground. Think of the last time you were in a multi-level shopping centre. How many retailers were above your head within a 10 metre radius? Did I mention that GPS accuracy is even worse indoors?

That’s why JCDecaux signs still flood the local Westfield, because the marketer behind them knows a certain number of people are walking past their brand, which is within an acceptable distance to their product.

So much data, so little time

The challenge for marketers is to find creative solutions to these shortcomings between targeted digital and physical world advertising, while the whole ecosystem moves slowly towards digital.

Consumers are taking their phones to new places, checking in, searching for information, playing games, using augmented reality apps – all these are opportunities for adtech and marktech players to collect data and insight.

This will be made both easier and harder by the explosion in the internet of things. Gartner estimates that there will be around 20.4 billion devices in the internet of things by 2020.

While this will create a lot of avenues for insights into consumer behaviour, I suspect it’ll also create a lot of opportunities for misleading claims about consumer intent from adtech and marktech companies.

What do they want?

The key is providing consumers with something they actually want and recognising your data’s strengths and weaknesses when it comes to building an ad campaign.

We operate in the wifi space. Our research indicates almost 80 per cent of consumers expect free wifi when they walk into a restaurant or cafe – the perfect chance for a business to capture consumer data. 

But what happens when they want delivery? The explosion in food delivery apps has given restaurants access to new markets, and with it, an avalanche of data.

We recently partnered with Foodora to bring these two data sets together. When is a delivery customer just a delivery customer? Might an in-store customer today want delivery tomorrow? Did the in-store customer know Foodora was accepted there?

These are questions you can only answer for the consumer if you’ve accurately placed them at home and in-store, and brought these two data sets together.

Until location-based marketing can accurately attribute a person to the store they’re in, this level of cooperation and kind of value proposition is what businesses will have to deliver to really reach their customers.

Gary Tramer is co-founder and chief sales strategy director at PoweredLocal.

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