The rise of location-based marketing

Web-savvy businesses have been obsessed with making sure their website is at the top of Google search pages for ages but during the past two years a new platform has been added to the mix – location marketing.

In addition to websites businesses are now using a variety of apps and portals to reach out to customers who are literally walking right past them.

Whether it’s via listing on FourSquare – which is now valued at over $US250 million – or Google Places location marketing is increasingly becoming a critical part of doing business.

A variety of other platforms, including Yelp and Urbanspoon, are using location functionality as well and those businesses are recording millions of downloads and site visits every month.

The trend is slowly reaching Australian shores. A number of start-ups, including social network Myzerr, RushCrowds and Roamz, which was recently acquired by catalogue printer Salmat, have been developing location platforms.

The group buying industry, which has exploded overseas and in Australia, is built upon the basis of localised deals, with companies now targeting smaller areas like regional centres Geelong and the Gold Coast.

Telsyte research director Foad Fadaghi says with so many Australians now owning smartphones location marketing is an essential part of doing business.

“Smartphone penetration is essential to this type of marketing,” he says.

“I think it’s reached a critical point now. I think we’re moving down this road of hyper local deals.”

Smart businesses are starting now. Using websites, apps and other platforms SMEs are realising they need to make sure people can find out about you – wherever they are.

“I think there are businesses really embracing it,” Reseo chief Chris Thomas says.

“Particularly when using Google Places. There is a groundswell at that low market level – they seem to be the ones actually doing things with it.”

Who’s doing it?

The location-based deals trend has been around for a while but the invention of FourSquare made things take off.

Within a few years that company has nearly seven million members – a large number of whom joined in the past six months or so – and more businesses are beginning to take part in FourSquare deals.

FourSquare works by having businesses and other shops register a profile. Once registered customers can then “check in” to those locations and tell their friends where they are and what they’re doing.

Businesses can also promote deals and discounts over the FourSquare app, drawing in new people.

A business profile may say “every second check-in receives a 10% discount”, which any customer can see on the app.

The company keeps customers interested by offering badges and points for checking in to particular places more than one once and builds up anticipation around important events – more than 200,000 people “checked in” to the Superbowl two weeks ago.

While FourSquare was the first app to pioneer the check-in feature other networks, including Facebook, have done the same, with their platforms offering similar features.

A variety of other small businesses have started incorporating “check-in” features on their platforms even if they aren’t the sole feature – GetGlue, Foodspotting and Tunerfish are some popular platforms in the US that use check-ins.

But check-ins are hardly the first location-based feature to be used in apps. Since the App Store launched in 2008 plenty of programs have been marketed as using a user’s location to deliver a service to them.

Restaurant finder UrbanSpoon, Yelp and footwear retailer Nike have all used location services in their apps and Twitter uses geo-tagging so you can pinpoint where tweets are coming from.

RealEstate.com.au utilises a user’s location in its iPhone app to determine the suburbs in which it searches for houses.

If you think this is just a platform that some ambitious start-ups are pioneering think again.

Google chief Eric Schmidt made a number of comments regarding location-based marketing at the recent Mobile World Congress in Barcelona.

“Once your phone knows where the person is via an opt-in service then a business model where a phone can alert you to a buying opportunity should revolutionise business,” Schmidt said.

“Look at Groupon – these models around consumerism really do work when they’re tied to location.”

The Australian market

The rest of the world is moving ahead with location marketing but the platform isn’t nearly as popular in Australia as it is in the US.

Roamz founder Jonathon Barouch says location-marketing is virtually “non-existent” here.

“Even in the United States it’s still very much in its infancy. If you look at the pure location-based market you’ve got things like Yelp, FourSquare and so on but the Australian market is bare.”

However there are signs that location marketing is beginning to take off.

FourSquare couldn’t say how many of its seven million members are from Australia but did say 40% of its members live outside the United States.

The size of the user base here is uncertain but several businesses in Australia are toying with FourSquare – simply open up the app and you’ll find dozens of listings. Companies are now experimenting with FourSquare-based discounts as well.

Borders started a campaign on FourSquare last year that gave customers 10% off a purchase and Vodafone Australia used FourSquare to offer discounts for customers looking to buy accessories.

Small businesses are using FourSquare too. In Melbourne Mag Nation is offering its FourSquare mayor a free coffee with every check-in and a variety of hotels and pubs are offering discounts on drinks and other services.

Catalogue manufacturer Salmat is pushing location services in a big way – its Lasoo location allows users to find discounts on products and directs them to the nearest store.

Salmat acquired location-based marketing platform Roamz last month and promises big things when it launches.

Roamz is keeping much of its plans under wraps but the company says it hopes to be the “go-to” destination for finding fun things to do in your area.

It promises to provide localised deals and reviews of restaurants, bars and other locations – similar to Google Places.

A separate start-up, Rush Crowds, promises to do similar things by connecting users to art and theatre events close to them.

Co-founder David Eedle says the market is slim but there are still possibilities for business.

“It’s an opportunity for local businesses to reach out to people – that’s how it needs to start,” he says.

Slade Sherman is creating a system where deals are so localised they appear on your street. His company, Myzerr, is designed so users can whip out an app and find deals on the same street.

“For example we used an entire range of deals on Chapel Street. You can walk down the street, open up the app and it shows all the businesses that have deals there, and I think that’s going to happen more,” he says.

“If you look at the number of businesses engaging location-based marketing it’s rather small which is interesting because what location does is quite amazing – it has the potential of taking online traffic and turn it into traffic for physical stores.”

Location, location, location

Location-based apps are becoming the norm, with areas those apps target getting smaller and smaller.

Group buying sites in Australia are concentrating mainly on city-based deals, but in the United States Groupon is listing multiple locations per city – there are now 13 regions in Florida, each with its own specific deals.

In Australia the market hasn’t reached that type of activity yet but with companies like Roamz and Myzer targeting deals on individual streets it’s a sign that businesses need to consider how to market in the area where they’re based.

Chris Thomas says that is critically important for businesses in the suburbs that won’t necessarily have a global following.

Through those platforms it’s not out of the question that if you’re good enough you can become a viral hit in your area.

“People are searching for businesses located in their areas and they are definitely becoming more granular in the way they are researching – they realise they will get a better result if they type in the name of their suburb,” Thomas says.

“Google is also supporting that by showing ads for local business listings.”

So how do you do it?

The experts say businesses really shouldn’t wait to get started. Recent research from GetPrice has found that 47% of online shoppers are using mobiles to search – and the quicker you show up in those results the better.

Mobile and location marketing is about trapping people who walk by and that means you need to broadcast your local offers through a combination of website-based SEO, applications and other web platforms.

Apps

FourSquare is the default app for location marketing and it doesn’t take much effort to get it working.

Businesses only need to go to their website and register their location, but you should probably add some details about your business, such as giving a little description and perhaps opening hours.

Unlike other location-based businesses such as those in the group buying industry, FourSquare doesn’t require you to hand out any sort of benefit, although you can get more attention if you do so of your own accord.

There are stories coming out of the US about small cafes and restaurants giving out discounts to regular users while Domino’s in Britain gave out free side dishes to users who checked in at any store.

FourSquare isn’t the only option. Facebook offers a check-in system and Google Latitude is another less popular check-in service that’s worth checking out.

Thomas says any small businesses – even hairdressers and cafes in the outer suburbs – need to encourage customers to start using those platforms.

“I’d actually like to see more businesses showing little signs that say ‘remember to check in’ whenever they enter. I’ve seen a few businesses doing this,” he says.

Location marketing is all about covering as much ground as possible. If people can’t find you on Google they should be able to find you on an app.

SEO

Don’t have enough money for a killer app? Then you should let Google do a lot of the work for you.

Stewart Media chief executive Jim Stewart says it isn’t a difficult process – you simply need to make sure your website is optimised for local keywords including your suburb and street name.

“This is going to give you a competitive edge and it’s a good thing for your branding if people see it in you search results,” he says.

Using your website is good enough but the major platform to be used here is Google Places.

If you aren’t optimising your website then you should be at least utilising this free tool which allows you to show up on Google Maps.

SmartCompany has reported on how businesses can optimise their sites for Google Places before.

You need to update with as many details as possible – location, store locations, opening times and so on.

Stewart says Google Places is becoming such a huge part of normal Google searches that businesses need to think of it as being just as important as setting up a website – especially if you’re in a competitive market.

“For some searches, for instance flowers or coffee, etc or generic large-volume searches, you are going to see places’ information shown up alongside it. And people are going to notice,” he says.

Stewart points out that because Google has used data from Sensis many businesses should show up in the Places system already but they don’t have enough information there because they don’t spend time updating details.

“It’s there but they haven’t gone in and updated their places listings. They need to go in there and customise it – that means using photographs, videos and so on,” he says.

“There needs to be more links and connections to your other content.

“All your Google Places data will automatically show up in the Google Places iPhone app – you’re covering two platforms at once.”

Website

Mobile marketing involves a number of different platforms but by far the most important is your website.

Experts say you should at the very least be putting up information about your location, opening hours, etc, so that if users search for you on a mobile that information will show up.

You should also talk to your SEO manager about making sure that when people search for you those immediate contact and location details will appear on the precede in Google’s results.

Stewart says another good idea is to have a page on the website detailing the specific local areas your business services.

“It is pretty simply one of the easiest things for a lot of businesses to do, especially in regional areas or businesses that are only servicing a certain amount of suburbs,” he says.

“People are doing a lot of localised searches now and search for their suburbs.

“They might try a plumber or so on but they will add their suburb’s name. Imagine the type of traffic you could get from those searches.”

Sherman says it is particularly crucial for retailers to update websites with location-based data.

“Retailers that engage in location-based devices and marketing, even on websites, can effectively drive online traffic back into the store,” he says.

“That’s the biggest promise of this type of technology. Yes, people spend time online but if you are not engaging in location-based services then you’re just denying yourself business.”

Social networking

This is the weakest of the location-marketing platforms but it’s still important.

The experts say you need to create fan pages on Facebook so that when any sort of information shows up in a follower’s news feed their friends are exposed to more mentions of your company.

Thomas says with so many people using Facebook on their mobiles and with 40% of people now tweeting from mobile apps now is the time to get serious about location-marketing through social networks.

“Create a Facebook page. Encourage people to become fans, even if you’re local. It allows you to appear in front of people who are friends of your friends- and they are the people you want to talk to,” he says.

“It creates this word of mouth effect so those people, those friends of your customers, are not only seeing the fact their friend is a fan of you, but they start seeing ads for you as well.”

Stewart agrees but says businesses need to take care of all the more important location-marketing platforms, such as apps and other platforms, before focusing on social networking.

“Google Places is important for this as well but  get your search marketing right –then you can look at things like Facebook and start interacting,” Stewart says.

“Of course you can do social media campaigns, but that’s one part of a whole suite of possibilities.”