With the number of mobile chipsets with GPS enabled technology increasing at an exponential scale (720 million units in 2011 from 180 million in 2007), we see that yet another technology platform is becoming ‘free’. The interest from the most innovative companies in the world like Google that just secured a broad patent for Location-Based Advertising confirms that this technology holds a great future for new media marketing.
Consider the trend & evolution of advertising in the new media. Starting from regular broadcast, it evolved into context based, permission based, customized, and history based advertising in the world wide web. Ads are pushed on to users taking into account their purchase histories, browsing preferences, profiles, consensual solicitations, etc. Now add to this another dimension – their GPS co-ordinate. This is analogous to adding sound to silent movies or colour to black and white pictures! With this platform (GPS enables phones) becoming ‘free’ as did other functionalities in the past like coloured mobile phone display, Bluetooth, IR (came & went), radio, mp3, … this is a sure winner and future for the mobile based ad technology.
This has implications for the new media marketing in terms of better reach, relevance and results. Bruner & Kumar (2007) stated that LBA enhances the ability to reach customers in a much more targeted manner than in the past. Sellers are able to reach customers if they are for example registered with them, made a previous purchase of lets say a DVD of Saw 4 and are passing by the store, only to receive an SMS that Saw 5 is available at the store. Hence the location dimension adds many possibilities to increase the reach in new ways.
LBA gives people more relevant information based on their preferences, profile and location. As per Vidaille (2007), the response rate increases dramatically (around 20%) that is very high. Furthermore, the results can be increased as well due to the buying patterns of people now have the geographic information included as well. This information can be used in addition to the traditional cookies etc. to have better offers and deals at the right places at the right times.
LBA has its critics as well. Most prominent concerns are that of privacy and spam. Privacy is compromised as not only the geographic information, but their activity as well can reveal more information that the users want. Furthermore, a spew of SMSes based on their location might also be a cause for concern for most and regarded as spam.
Hence, it is important to give customers choice, control and confidentiality and ensure that they only receive pertinent and wanted information. Hence for an LBA to be successful, it needs to be permission based, relevant and on time.