Location Based Marketing – Could it Really Work? Part Two

Part One of this post concluded that the really important question when studying Location Based Marketing (LBM), in fact, the-answer-to-life-death-and-the-universe question of the subject, is: what kind of marketing messages should you say youǃÙre going to send that will attract opt-in users, that recipients will welcome and that theyǃÙll respond to? In other words, what kind of messages will work?

Knowing what the user wants is key to both opt-in in the first place and subsequently, optimising the channelǃÙs effectiveness.

This might seem an obvious point to make and indeed, a comment was made to this effect on the original post. However, it’s a point that does need labouring, especially in the marketing community.

Why? Because the mindset of nearly all advertising, direct marketing and promotion has historically been about interrupting the recipient in whatever they’re doing at the time. This could be while they’re consuming a medium (TV, radio, newspapers) or doing something else (walking down the street, opening their post, shopping in a supermarket, surfing the net). Whatever the scenario, the marketer hasn’t really had to explicitly seek permission to communicate a marketing message before.

Of course, this isn’t 100% true. Direct Marketers will point out that they use opt in lists and have been for many years. This is actually rarely the case. Most use opt-out, which is an entirely different thing. True opt in marketing, where the future recipient of messages is knowingly signing up to a marketing channel is pretty rare. So for the vast majority of brands and agencies, this is a logical, important, but nevertheless, not so obvious starting point.

In this post, I’m going to kick off with some of the physical delivery characteristics of these messages, before a final Part 3, when I’ll look at what the messages themselves might actually say.

Firstly, they have to be free to receive. While some may believe that selling ads is possible (iTunes and ESPN announced yesterday that they will sell classic commercials for $2 a pop) I can say with some certainty that it’s going to be a pretty niche market. For the vast majority of us, we expect that our marketing messages are free and will take umbrage if we find that we’re being charged directly or indirectly for being enticed to buy someone’s product or service.

This is important in the context of a mobile phone, because even if the marketer doesn’t charge, the mobile operator may well do so. Any delivery of the marketing message over WAP will incur data charges, for instance and in the US, recipients will even be charged for receiving an sms.

There’s another dimension here though. Many digital marketing messages encourage interaction, mainly clicking through to a website. If there’s a cost to this action, in terms of more data charges, it’s going to suppress click-throughs to far below what we see on the traditional web. Can you imagine what it would do to AdSense response rates if Google started charging the consumer whenever they clicked an ad? And it would be even worse if you didn’t know how much they were going to be charged – operators being far from transparent or at least easily comprehensible, when it comes to one-off data charges.

This means that mobile ads will have to either develop an alternative call to action to the click-through, or find a technology-led solution to allow the user to click through for free.

Neither of these scenarios are impossible actually. Since we’re talking about LBM, we could be looking at the equivalent of a Physical Click-Through, otherwise known as a store visit. Or maybe where the message was delivered by a local network, a digital click-through could be handled free over that network too.

Any marketer who doesn’t take this potential cost barrier into account needs to rethink in my view. Although, I live in hope that all-you-can-eat data downloads might solve this problem for operator delivered messages, eventually.

A second characteristic of these types of messages, is that the message needs to differentiate itself from other forms of messaging, in an ideal world. Taking sms as a possible channel, the familiar beep of an incoming text message triggers a Pavlovian emotional reaction. Someone has sent YOU something and you can’t wait to open it. With younger people, the sms is much more likely to be personal (rather than business) and so possibly even more exciting.

So it can be anti-climactic to open it, to find that it’s “just” a marketing message. In any other context, you may have valued it (after all, you signed up to receive them), but the Beep raised your expectations too high. This is a point endorsed by The Mobile Sage of Brighton, Tom Hume in his comment on my first post.

If there were ways to push messages to individuals without masquerading as a friend or family member (which is what SMS marketing messages effectively do, after all), would it be more welcomed?

Yes, Tom, I think you’re right.

James at Moco News shared much the same thinking in his post about my original article and hypothesised that maybe the delivery channel could be a “scrolling ticker”. This would distinguish it from other forms of messages and could well be a solution. It also has the other important, third characteristic of LBM, namely:

It automatically disappears when no longer relevant or when the recipient fails to interact after a given period of time.

This is important for two reasons. Firstly, no one wants their phone’s valuable memory clogged up with mobile marketing detrius, especially if it’s no longer applicable or relevant. Secondly, to avoid the annoyance factor of recipients thinking “Yeah and?? I’ve already seen that and wasn’t interested.”

The fourth characteristic is timeliness. True LBM is highly time relevant – you are in the vicinity of the message sender for a matter of minutes, or even seconds. Therefore the message delivery backend, as well as the delivery itself, must effectively be instant.

If we’re using sms, this isn’t really an issue. But with richer media, like images, or even video, sending via an operator’s network can be slow at current download rates and by the time it arrives, it could have become obsolete.

As operator networks get faster and faster, rich media delivery, if appropriate in the first place, will become less of an issue. In the meantime, some form of local network, Bluetooth or wifi, might be the better option for high bandwidth media.

The next characteristic is don’t interrupt! Although interruptive techniques have been the very foundation of marketing throughout the ages, this is one environment where it’s a no, no.

If I’m making a call, I do NOT want to be interrupted by a marketing message.

If I’m writing an sms, I do not want to be interrupted by a marketing message, have to click on it to make it go away and then find my draft again.

Interruption on mobiles will be very annoying and will lead to people opting out of the programme very, very quickly.

The next characteristic is accuracy of location feeds. If a store visit, for example, is the objective of the campaign (and it doesn’t have to be), the further away the recipient of the message is, the less likely they are to visit.

There are many competing technologies as far as location identification is concerned and this isn’t the place to review them all. But I’d suggest that such a system needs to deliver accuracy of less than say, 100m, in all types of terrain. As an example, pure GPS relies on line of sight with a satellite, making it impractical to use in many urban environments.

Naturally, LBM may well encompass locally delivered, but non-location specific messages, in which case accuracy is inherent, if often not necessary.

My final thought on the characteristic of the ideal LBM message is probably too futuristic to be realistic right now. But it will be necessary if true LBM is to succeed in the longer term and in a mass market context.

Many such messages will require the user to visit a store and use their phone to prove that they are entitled to some benefit. This process must eventually be integrated in some way into the retailers’ EPOS systems if it’s to be accepted by the Ops people in the retailers.

Of course, the perfect system would be to allow the mobile user to receive the marketing message, go into the store, pay for the product or service and redeem an offer – all completely seamlessly with their mobile. But we’re a ways off that currently.

That’s my thoughts on the most important characteristics of LBM messages. What have I missed out? Please leave a comment and let me know or share your thoughts on this important subject.

Of course, you could argue that many of these characteristics are common sense and up to a point, they are. It’s like being invited into someone’s home – be respectful, sensitive to their feelings, ask before you use something and don’t deliberately break their washing line (long story!). But this is not how marketers have behaved in the past and most will require a new mindset when developing campaigns for the mobile channel.

Tomorrow, my final post in this series about LBM will be about the messages themselves. What should they be saying in terms of content that will make them attractive enough to opt into in the first place and to want to continue to receive them? Many traditional advertising messages will no longer be acceptable, so what should marketers think about saying?

If you have any thoughts on this angle too, please drop me an email or leave a comment.

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