What type of location-based marketing is best?

Location-Based Marketing: Geo-Fencing vs. 1st-Party Behavioral Geo-Targeting

The marketing landscape has undergone a significant transformation in the last decade, particularly with the rapid growth of digital marketing and the increased use of data. Location-based marketing has emerged as a vital tool for businesses to target their potential customers more effectively. Two prominent approaches in location-based marketing are point-in-time geo-fencing and behavior/frequency-based marketing using 1st party data segments. This article will discuss the differences, benefits, and drawbacks of these two approaches to help businesses make informed decisions about their marketing strategies.

Traditional Point-in-Time Geo-Fencing

Geo-fencing, a location-based marketing technique, involves defining a virtual boundary around a specific geographical location. When customers enter the geo-fenced area, they receive targeted ads or promotional messages on their mobile devices. This approach allows businesses to send relevant offers to potential customers based on their proximity to a specific location, such as a store or an event.

Pros:

1. Real-time targeting: Geo-fencing allows businesses to target customers when they are most likely to visit a store or make a purchase, as they are already in the vicinity.
2. Easy setup: Setting up a geo-fence is relatively simple, requiring minimal technical knowledge or resources.
3. Immediate results: As customers receive ads or offers in real-time, businesses can see immediate results in terms of foot traffic and sales.

Cons:

1. Limited scope: Geo-fencing is limited to specific locations and is less effective for businesses targeting a broader audience.
2. Privacy concerns: Geo-fencing requires customers to share their location data, which may lead to privacy concerns and resistance to engage with the ads.
3. Short-term focus: This approach may not be effective for building long-term customer relationships, as it primarily targets customers based on their immediate proximity to a location.

Behavior/Frequency-Based Marketing of Location Using 1st Party Data Segments

Behavior/frequency-based marketing involves analyzing customer data to identify patterns and habits that can be leveraged for marketing purposes. This approach uses 1st party data, which is data collected directly from customers by the business. By understanding customers' past behaviors and frequency of visits, businesses can create personalized marketing messages and offers to attract and retain customers more effectively.

Pros:

1. Personalization: Analyzing 1st party data allows businesses to create highly personalized marketing campaigns that resonate with their customers, leading to higher conversion rates.
2. Long-term relationship building: Behavior/frequency-based marketing enables businesses to understand and cater to their customers' preferences and habits, fostering long-term loyalty.
3. Broader scope: This approach is not restricted to a specific location, allowing businesses to target a wider audience.

Cons:

1. Data management challenges: Collecting, storing, and analyzing large volumes of 1st party data can be resource-intensive and requires proper data management practices.
2. Complexity: Behavior/frequency-based marketing is more complex than traditional geo-fencing and may require specialized expertise to implement effectively.
3. Longer implementation time: Due to the data analysis involved, this approach may take longer to implement and see results compared to point-in-time geo-fencing.

Conclusion

Both traditional point-in-time geo-fencing and behavior/frequency-based marketing using 1st party data segments offer unique advantages for location-based marketing. The choice between these two approaches depends on a business's specific needs, objectives, and resources. Geo-fencing is ideal for businesses looking for immediate results, while behavior/frequency-based marketing is more suited for those seeking to build long-term customer relationships through personalized marketing campaigns.

At Intuizi, we are industry leaders at analyzing the behavior and frequency of visitation of mobile GPS signals to better infer and enhance marketing strategies and analyses. If you would like to learn more please find some time for a conversation here.