Proximity, Location-based or Hyper-local Advertising is ‘Where it’s at!’

proximity

Proximity, location-based or hyper-local advertising is a method a business uses to get the attention of a mobile or tablet user (and those on laptops) that are in close range using WIFI, GPS or Bluetooth enabled.  Usually an alert will be in the form of a discount or special freebie to try and get them to come in to your establishment. Consumer privacy is completely protected since a person can  choose whether or not to receive the message. More companies are also using this measure as a reward for loyal shoppers who are currently in their store. (See for good example)https://www.youtube.com/watch?v=rMPP-TmYqAg (Links to an external site.)

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Benefits to marketers using proximity channels

As our lecture (Rhoads, 2015) states, “Proximity marketing offers marketers the opportunity to promote brands to highly targeted, on-location audiences to access what’s nearby and are good for any size business.” The lecture also mentions other positive mobile proximity variables such as providing deeper engagement with your audience and delivering relevant timely ads for the unique needs of mobile users

“Proximity marketing merges the physical and digital domains by using mobile devices to reach consumers at the greatest point of influence, providing bargains for shoppers and increased sales and consumer insights for retailers.  (Romanov,2012).Proximity Marketing: When Worlds Collide. (Links to an external site.)

In addition to its new Mobile Audience Network, in October Facebooklaunched (Links to an external site.)local awareness ads (Links to an external site.)that are more cost-effective than traditional advertising channels like newspapers and flyers, plus they offer “more precise targeting, greater reach and a great way to discover new places of interest.” (Protalinski, 2014).Facebook Launches Local Awareness Ads to let Businesses Target Users Nearby. (Links to an external site.)

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Why incorporate into an overall communications plan?

Statistics point to a good return on investment to include53% of consumers willing to share current locations specifically to receive offers of which 63% feel a coupon is the most valuable form of mobile marketing. Data has also shown that 57% of people are more likely to engage with location-based advertising along with 62% sharing local deals with friends.

Macy’s, an early adopter of Proximity Marketing, announced in 2014 that it will be rolling out the technology to all of its stores after a successful pilot last holiday season. Macy’s will send personalized department-level deals, discounts, recommendations and rewards to customers who opt-in. In addition, Coca-Cola, Procter & Gamble, Levi’s and Kraft have reported that interactions with advertised products increased 19 times and in-store app usage was 16.5 times higher for users who received a beacon message. A large Las Vegas casino tailors messages to customers such as the benefits of joining their player’s club, or welcome offers to VIP customers including greeting them with their favorite drinks.  (Petro,2014).How Proximity Marketing is Driving Retail Sales. (Links to an external site.)

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Research also shows what common sense suggests: Consumers are most likely to buy when they’re in sight of products and services in which they’ve shown an interest giving merchants an edge. Retailers who have targeted merchandising strategies to move specific products can benefit greatly from proximity marketing because it allows them to quickly change messaging as inventory levels fluctuate. The real time engagement will also yield valuable data on your consumer buying habits and message effectiveness. A recent installation at a leading North American convenience store chain didn’t garner even one complaint, and the messages did help to drive sales increases. The consumer who is most receptive is also in a highly desirable demographic: tech-savvy customers with disposable income. (Romanov,2012).

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How will wearables influence proximity marketing strategies?

The modularity of the NEX Band is its biggest advantage because the product will be able to grow with its user. Although younger testers are much more interested in gaming features, young adults are much more interested in the proximity features, in the fashion component, and in customizing notifications that go directly to the bands. (Yury,2014).Betting on teens on Wearable Tech. (Links to an external site.)

“NFC and RFID chips could be easily embedded and thus turn any daily item into a wearable,” Donovan noted, “and that means a lot of consumer data to be generated”. As Clarke pointed out, however, many companies are still “trying to figure out what to do with the data that proximity and wearable tech generated”. In order to realize the aforementioned contextualization in consumer marketing, we will need figure out how to leverage data into consumer insights.Called by some “The Holy Grail of Content Delivery” – wearable tech offers marketers the opportunity to speak to their audience based on their location, in real time. Wearables will be able to measure so much: movement, stress levels, the sound in your environment, how frequently you go outside, whether you take the elevator or the stairs, whether you usually go to noisy bars or quiet cafes. Nike could offer a 15% rebate on a pair of shoes after the consumer runs 50 miles in them. (McDonald, 2015)4 Ways Wearables Will Change Marketing. (Links to an external site.)

When have I taken advantage of a proximity marketing offer?

I am very disappointed to say that I’ve never received a proximity offer.  Even though I haven’t really signed up to receive many offers from some of the restaurants in my area, I have remitted my mobile data to all the grocery stores I frequent (Safeway, Giant, Trader Joe’s, Walmart and Target) and am perplexed why these major chains aren’t taking advantage of this effortless and useful technology. I also have the McDonald and Dunkin Donut app and have never received a proximity alert for either. The odd thing is that I’m bombarded with constant messaging but not when I’m near a point of sale and would gladly veer to another store with a decent offer!

References

McDonald, M. (Jan. 26, 2015)4 Ways Wearables Will Change Marketing. (Links to an external site.)

Petro, G. (Oct. 8, 2014).How Proximity Marketing is Driving Retail Sales. (Links to an external site.)

Protalinski, E. (Oct, 7, 2014).Facebook Launches Local Awareness Ads to let Businesses Target Users Nearby. (Links to an external site.)

Rhoads, J. (February 2015). MMC 5006 Lecture Week 8: Proximity Marketing.

Romanov, A. (Dec. 11, 2012).Proximity Marketing: When Worlds Collide. (Links to an external site.)

Yury, C. (July 31, 2014).Betting on teens on Wearable Tech. (Links to an external site.)

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