LOCATION: A STRATEGIC MARKETING...

LOCATION: A STRATEGIC MARKETING IMPERATIVE HOW LOCATION-BASED MARKETING IS REINVENTING THE PATH TO PURCHASE

IN ASSOCIATION WITH:

CONTENTSIntroduction ............................................................................................................... 2

Keeping Pace With Consumer Expectations ............................................... 3

Bridging the Gap Between Online and Offline ............................................ 5

Reinventing the In-Store Experience ............................................................... 6

Beyond Search and Social—A New Category ............................................. 8

A Look to the Future .............................................................................................. 9

Conclusion .................................................................................................................11

Acknowledgments.................................................................................................12

INTRODUCTION

Location-based mobile advertising is more than simply a nice-to-have tactic in a marketer’s toolkit. Rather, it’s fast becoming a strategic imperative in today’s data-driven, highly competitive landscape.

It’s easy to understand why. Mobile is quickly surpassing desktop computers as the most essential aid for making a purchasing decision. In fact, by 2018, global smartphone users will reach the 2.5 billion mark, according to eMarketer. And nearly 86 million consumers will make a purchase on their device in 2016. At the same time, more and more shoppers are recognizing the value exchange of sharing information, such as location data, in return for value in the form of cou-pons, loyalty points or relevant information about a product or service.

“[Consumers] are getting more and more accustomed to the fact that their location plays an integral part in the value proposition of the services they use,” says Joe Laszlo, vice president of industry initiatives at the Interactive Advertising Bureau (IAB). Whereas in the past, there was “some hesitation or concern” around divulging personal details, Laszlo says, “the equation now is much clearer as far as the benefits of sharing location data.”

Consumers’ expectations are also changing as apps such as Uber, Tinder and Yelp raise the bar on service delivery. Whether mapping the nearest coffee shop or swiping for the closest love connection, location data is forever changing how people shop, eat, date and travel. As a result, shoppers now expect in-the-moment, personalized, relevant experiences, whether purchasing products online or browsing the aisles of a brick-and-mortar retailer.

For marketers, this new breed of mobile-dependent, highly demanding consumer is more than simply a challenge. It’s a prime opportunity to engage and activate customers in new and innovative ways. Chief among these new strategies is location-based marketing. As it is, the number of location-driven apps is set to skyrocket. Over the next five years, loca-tion-based ads will make up over 40% of mobile spend, reports eMarketer. And Juniper Research reports that the number of location-aware apps is expected to triple by 2019, making it a significant subset of the mobile application marketplace.

All of which means location is fast becoming one of the most powerful means for identifying and delivering on consum-ers’ real-time intent. The goal is to create purchase incentives and foster engagement. As a result, location is now critical to tapping into these precise moments of decision making.

This paper features interviews with some of today’s leading brands on how they’ve effectively leveraged location. Based on these shared insights, there are four key ways marketers can make the most of a consumer’s location for instant connec-tivity, and learn how to match real-time customer data to correct location context for an innovative digital experience.

1) Keeping Pace With Consumer Expectations 2) Bridging the Gap Between Online and Offline 3) Reinventing the In-Store Experience 4) Beyond Search and Social—A New Category

2 | LOCATION: A STRATEGIC MARKETING IMPERATIVE

One only needs to look at consumers’ changing path to purchase to understand the increasingly impor-tant role mobile and location plays in connecting with

customers in the right place, at the right time. Thanks to the proliferation of smartphones, consumers now enjoy unfettered access to product information, pricing, business locations and local deals, all via a simple mobile connection. Armed with this up-to-the-minute information, today’s new breed of consumer expects tailored, immediate and relevant customer experiences.

“In the old days, we could mass market a message on three television networks and reach everybody,” says Angelique Krembs, vice president of marketing activation for PepsiCo North America Beverages. “But that isn’t the case today. Everything is so much more tailored to people’s tastes and behaviors.”

In addition to more personalized communications, con-sumers are also demanding more immediate returns on their interactions with brands. With the tap of a screen, a consumer can now order a taxi, an out-of-stock cashmere sweater, organic produce or a date for Saturday night. Uber, Tinder, Yelp—they are all wildly popular apps that are reset-ting consumer expectations and reducing acceptable response times from brands.

“Because of the role of the mobile device in people’s lives today, there’s a new expectation on how brands, companies, products and services inter-act with customers,” says Michael Lacorazza, execu-tive vice president and head of integrated marketing at Wells Fargo. “Consumers expect to be able to take you with them, they expect to be always on, and they expect instant gratification.”

In fact, a Forrester Research report reveals that 70% of marketers reported that their

firms are either changing their way of doing business, altering their approach to customer experience or transforming their overall digital experience due to the rise of mobile.

Another demand arising from this shift in consumer mindset is the need for relevant interactions. Long gone are the days of generic direct mail campaigns. Nowadays brands need to provide relevant, tailored messaging and purchase opportunities in order to drive action. Location is proving to be the perfect tool.

“Location is about serving up relevant messages to con-sumers where they can actually act on them, which is really powerful,” says Krembs. “In the days of TV-only, you were trying to influence consumers as they sat at home and hoped they remembered those messages when they went to the store. Now you can actually talk to consumers when they’re near your store, or influence them where your brands are present.”

PepsiCo isn’t the only brand behemoth recognizing the power of carefully timed, location-based marketing to meet high customer expectations. “Location-based services are get-ting to the point where consumers are expecting messages to be tailored to them,” says Miles Marmo, brand experience manager for Mike’s Hard Lemonade Co.

For example, Marmo says, within the brand portfolio urban shoppers tend to purchase Mike’s Hard Lemonade products from

convenience stores while on the go. Suburban buyers, on the other hand, are more likely to browse grocery stores for product. Mindful of these distinctions in con-sumer buying patterns and location, Marmo says, Mike’s Hard Lemonade is better able to tailor its mobile campaigns by brand and consumer for greater impact and relevance. “We know that the creative

KEEPING PACE WITH CONSUMER EXPECTATIONS

“Now you can actually talk to consumers when they’re near your store, or influence them where your brands are present.”

— ANGELIQUE KREMBS Vice President of Marketing Activation,

PepsiCo North America Beverages

COPYRIGHT © 2016 FORBES INSIGHTS | 3

messaging [in marketing cam-paigns for urban shoppers] has to be short, quippy and engaging because that consumer is in and out,” he says.

Dunkin’ Brands is another example of a well-known name that’s leveraging location data to cater to customer demands for instant connectivity and imme-diate gratification. “The power of combining mobile and local is to take 1:1 market ing to an even more effective and per-sonal level,” says John Costello, president of global marketing and innovation at Dunkin’ Brands and the current chairman of the Mobile Marketing Association.

One way Dunkin’ Brands accomplishes this is by crafting campaigns that consider a consumer’s intent. Is it a customer’s first coffee of the day? Is he handling a mid-afternoon cof-fee run for his office? Is she about to stroll by a local Dunkin’ Donuts store? Or is she on a commuter train heading home for the evening? The right location data can answer these ques-tions, enabling marketers like Dunkin’ Brands to know when and how to reach their best customers.

How a consumer uses his or her smartphone is also a clear indicator of intent. For instance, consumers that are researching

products and services on their smartphones while on the go demonstrate a great deal of intent to purchase and to purchase quickly. In fact, according to the “Mobile Path to Purchase” study, released by mobile-location ad platform xAd, on-the-go researchers are 45% more likely to make a purchase within the hour over those at home—an important signal for marketers to detect and act on quickly.

As consumer expectations rise, location is also set to play an even larger role in the global expansion plans of some of today’s top U.S. corporations. “Consumer worktime varies around the world, with U.S. workers starting earlier than many places around the globe,” says Costello. “So the early morning time period is Dunkin’ Donuts’ busiest part of the day, whereas in other countries around the world, we might have a larger afternoon business.” Location-based market-ing allows brands like Dunkin’ Donuts to be sensitive to varying cultural and geographic sensibilities, as well as indi-vidual expectations, by recognizing where consumers are and at what time of the day.

“Location-based services are getting to the point where consumers are expecting messages to be tailored to them.”

—MILES MARMOBRAND EXPERIENCE MANAGER,

MIKE’S HARD LEMONADE CO.


Gone are the days of researching a product over an extended period of time before making a final pur-chasing decision. Rather, these days, buying decisions

are made within seconds of identifying a need. Certainly, mobile is helping to facilitate this speedy decision

making by allowing consumers to be online while on the go. In fact, 44% of consumers report their mobile devices—smart-phones or tablets—are the most essential aid to their purchase decision, according to xAd’s “Mobile Path to Purchase” study.

This shift does not mean that mobile is limiting brick-and-mortar purchasing. In fact, the unique value proposition of mobile-location is that it can actually bring together online and offline commerce for real-time, relevant engagements. “It’s very important to deliver the most relevant message to the right con-sumer at the right time, at the right location,” says Costello. “So location has a real opportu-nity to make mobile even more effective and bridge the gap between online and offline.”

In the case of Dunkin’ Donuts, the restaurant chain still relies on time-tested mar-keting channels like television and radio. “Traditional market-ing like television, out of home and radio continue to work very effectively for us,” says Costello. However, by creat-ing campaigns that are mindful

of where a consumer is, where they are in the buying journey, their real-time intent, and how close they are to a retail loca-tion, Costello says, Dunkin’ Donuts “can maximize the synergy between traditional and mobile marketing” for greater “rele-vancy and effectiveness.”

Krembs of PepsiCo agrees. “In the old world, you made one big, beautiful expensive television ad and you’d run it for a year. Well, those days are over.” Instead, Krembs says with smartphone-friendly channels like Facebook, YouTube and Twitter, brands must view marketing as “an ecosystem of con-tent that needs to be relevant to what the consumer wants to see, depending on where they are.”

It’s a testament to the power of location data that’s evident in a recent Wells Fargo mobile campaign designed to drive greater in-branch visitations. First, the financial services company identi-

fied consumers whose online search data indicated an inter-est in opening up a new bank account. These prospects were then served a mobile ad for a variety of deposit account options, along with a geolocation notification for the bank branch nearest to them. By leveraging loca-tion, Wells Fargo was able to bridge the divide between online and offline worlds for its mobile customers.

BRIDGING THE GAP BETWEEN ONLINE AND OFFLINE

“It’s very important to deliver the most relevant message to the right consumer at the right time, at the right location.”

—JOHN COSTELLOPRESIDENT OF GLOBAL

MARKETING AND INNOVATION, DUNKIN’ BRANDS


For all of mobile’s perks, the brick-and-mortar buying jour-ney is very much alive and well. In fact, according to the Department of Commerce, 90% of retail transactions still

happen in the real world. So the goal for marketers isn’t to replace the offline experience with an online one but to enable a faster, more seamless purchase process. The right mobile strategy can enhance customer experience by nurturing brand-customer con-nections in-store.

“The industry has been thinking for a while now about smartphones as the new cus-tomer service rep and that there are real opportunities for the mobile phone to become a major shopping aid,” says Laszlo. “Companies like Macy’s have made major investments in in-store wireless infrastructure that are really pushing the envelope.”

At the core of many of these new initiatives is location data. By tapping into what’s happening “now” with a customer, location allows marketers to deliver per-sonalized and relevant in-store experiences in ways never before possible. Nowhere is this more evident than in today’s Quick-Service Restaurant (QSR) industry, where location-based mobile technology is rejuvenating the offline purchase experience. Although they’re offline by nature, QSRs are blazing new trails, revealing a deep understanding of consumer behavior based on

how consumers interact in-store and when using a company’s app.Take, for example, McDonald’s China. For years, the for-

eign-based fast-food division delivered direct mail pieces to its customers’ homes in order to share product updates. “But right now, nobody is reading the mailers, so we’re using location-based marketing to identify our target consumers,” says Christine Xu, vice president and chief marketing officer for McDonald’s China.

One such campaign is McDonald’s Sakura ice cream initia-tive. McDonald’s China launches a new flavor of ice cream nearly five times a year. However, because ice cream “is a very impulsive purchase,” Xu says, it does not make sense to use “the marketing dollars to promote it using TV advertising.” As a result, she says, “the challenge for us is how can we spread the news and reach as many consumers as we can.”

So when it came time to release its new Sakura ice cream fla-vor in September 2014, McDonald’s China teamed up with mobile map provider Baidu to create a location-driven mobile campaign. For every consumer within a three-kilometer radius of a McDonald’s dessert kiosk, he or she would receive a mobile push notification promoting the chance to win a free Sakura ice cream cone. Within its first 10 days, the wildly successful cam-paign generated 300,000 redemptions.

REINVENTING THE IN-STORE EXPERIENCE

Taco Bell’s mobile app topped 2 million downloads in its first four months, and three-quarters of Taco Bell chains processed a mobile

order on the app’s first day.


For many brands, location-based marketing promises to level the playing field, enabling smaller outfits to create mobile apps that

allow them to compete with deep-pocketed competitors.

QSRs are even starting to predict when consumers are near a location to ask if they’d like to place their favorite order. Taco Bell is one of the first QSRs to launch a mobile order-ahead app that lets customers purchase food from the app and pick it up without waiting in line at a brick-and-mortar location. The mobile app topped 2 million downloads in its first four months, and three-quarters of Taco Bell chains processed a mobile order on the app’s first day.

Dunkin’ Brands is also experimenting with ordering-ahead technology with the testing of its DD On-the-Go Ordering app for loyalty members in Portland, Maine. “We are very optimistic about the potential of location-based mobile order-ing for Dunkin’,” says Costello.

Burger King, Starbucks, Wendy’s, Walmart, Chipotle—they are all investing in in-store solutions to enhance the overall shopping experience. While strategies range from inte-grating coupons into mobile payments to offering on-demand delivery services, the common denominator among them is that they’re all made possible by mobile location.

Indeed, for many brands, location-based marketing prom-ises to level the playing field, enabling smaller outfits to create

mobile apps that allow them to compete with deep-pocketed competitors. Says Greg Stuart, chief executive officer of the Mobile Marketing Association: “I had the chief marketing offi-cer of a smaller chain of QSRs tell me that they believed their entire marketing could be more impactful using mobile loca-tion targeting than their bigger competitors who have much bigger television-focused budgets.”

Another in-store upshot of location-based marketing: the opportunity to upsell. “If you’re planning to stop in Dunkin’ Donuts for an iced coffee, we could use a location-based mobile offer to suggest a bakery sandwich to go alongside your iced coffee,” says Costello. “We could also use that location-based mobile ad to introduce you to our new macchiato drink. So you may have someone planning to visit Dunkin’ Donuts for a traditional product like iced coffee and a location-based mobile ad could trade them up to a new beverage or drive attachment by suggesting a complementary food item.”

Regardless of the goal, be it to predict customer behavior or cross-promote coffee products, mobile phones are bringing the digital environment into the four walls of brick-and-mortar, infusing new life into in-store operations.


Search and social are key ingredients in any marketing mix. Search engine optimization helps marketers deliver the right answers to inquisitive consumers in a timely fashion.

Social media channels, on the other hand, let brands connect and engage consumers in real time. But while these twin mar-keting tools are excellent for reaching consumers at home, they have their fair share of limitations. For example, a 22-year-old male’s search and social activities may indicate that he’s in the market to buy his first car. But beyond initial interest, there is little to learn about the consumer’s actual behavior or intent.

Fortunately, location fills these gaps for marketers. Unlike search and social data, location taps into what’s actually happen-ing “now” in the real world without requiring a keyword or explicit interest. After all, where consumers are located says a lot more about their needs and intent than the websites they visit or the apps they use.

No longer simply a comple-mentary channel to search and social, location is fast becoming its own category—a powerful source of information about a customer’s position that can be used by marketers to deliver rel-evant and contextual messaging in a number of new and innovative ways. In the end, researching a car online may show a consumer’s initial intent. But visiting a car lot actually establishes that he is seriously considering a pur-chase, making location one of the most important indicators of intent, immediacy and context.

Where people are, or where they have been, can provide powerful context about their needs as consumers, the best ways to tailor messages and offerings to them, and their immediate

intent to purchase. Whereas search and social dangerously neglect these offline behaviors, location data allows marketers to tap into these audience insights and to act on consumer patterns and needs in real time, using relevant and contextual messaging. The result: a prime opportunity for marketers to carefully shape consumer behavior and significantly drive sales.

Encouragingly, innovative brands are finding ways to com-bine the benefits of location, search and social. “There’s a way for them to complement one another,” says Marmo of Mike’s Hard Lemonade. Rather than rely on social as a “sales tactic,” Marmo says social can serve as an effective “customer reengage-ment platform” for audiences that have initially been targeted using location-based marketing tactics. “It’s about just mak-

ing sure that they’re interested and aware of what’s going on with your brand in a contex-tual sense. From there, we can use social as a way to deliver targeted messages for products that are just launching in certain areas. It’s about building aware-ness and consideration more than anything.”

Lacorazza of Wells Fargo agrees. Because the finan-cial services firm hosts local

events across the country, Lacorazza says there’s often a need to target a particular locale without the need for highly per-sonalized and tailored communications. Location, combined with social and search, can provide the perfect balance of location specificity and general messaging. That’s because a combination of search, social and location can be a power-ful tool in targeting consumers both online and offline with a wide variety of messaging.

BEYOND SEARCH AND SOCIAL—A NEW CATEGORY

Researching a car online may show a consumer’s initial intent. But visiting

a car lot actually establishes that he is seriously

considering a purchase.


A LOOK TO THE FUTURE

There is no overestimating the commercial impact of location-based marketing. Capable of exceeding cus-tomer expectations, bridging online and offline worlds,

reinventing the in-store experience and enhancing search and social, location is repaving the consumer path to purchase.

But beyond digital coupons and mobile banners, location-based marketing is also helping big brands improve location communi-ties, build new marketplaces and support global expansion.

An excellent example of location’s far-reaching potential is Oxfam International’s holiday giving campaign. The global relief and development organization teamed up with xAd to target consumers when they are most likely to donate, such as when they’re at the mall shopping for presents or in line at the grocery store preparing for a holiday meal. The “Unwrapped” program allows consumers to make a donation as a gift for a friend or relative that will be used to help communities in need around the world.

Location is also gaining a reputation for being a reliable campaign performance metric. “Up until now, the best way to track whether a mobile ad cam-paign was working for you was to build a coupon into the ad and count redemption rates,” says Laszlo of the IAB. “Now, with location data available in the background, we’re getting better performance metrics, which are very likely to unlock further investments in mobile down the road.” For example, brands can measure how many

customers viewed a particular mobile ad, and the increase of in-store foot traffic as a result of a mobile campaign. Armed with these metrics, brands can then build a stronger business case for greater investment in mobile advertising.

Furthermore, experts agree that we’re approaching a time when brands will be able to use location data to not only mea-sure how much foot traffic a mobile ad drives into a store but where shoppers are most likely to head next based on their previous buying patterns and behavior. Using this predictive information, brands can attempt to entice consumers away from competitors with location-targeted mobile campaigns.

However, in order to get to that point, marketers must first have the ability to match real-time customer data to the cor-rect context. Only then will they be able to leverage real-time consumer intent in order to make educated predictions about future behavior.

As Forrester Research identified in a recent survey, only 16% of marketers actually have the tools to build a campaign that is

both based on customer data and relevant to an individual’s real-time context, whether that be location, time of day or any other crucial state-of-mind indicators.

In the midst of these new developments, and as market-ers learn how to fully leverage location, mobile continues to rise in popularity, prompt-ing many brands to not only incorporate mobile into their strategies but to truly become mobile-first organizations.

Brands will be able to use location data to not only

measure how much foot traffic a mobile ad

drives into a store but where shoppers are most likely

to head next.



CONCLUSION

Mobility and location are forever changing the way consumers purchase products and services. Sweeping mobile penetration, growing consumer comfort with information-sharing, increased access to data—all three factors are transforming the path to purchase. With consumers no longer tethered to their homes, they can be both online and

out and about in the real world simultaneously. The resulting importance of location has not only created changing consumer expectations, but also incredible opportunities for marketers.

All of which is prompting brands to create and deliver marketing campaigns that supply consumers with tailored, relevant and personalized communications for the products they advertise. The need is now urgent to deliver the right experience at precisely the right moment along the customer journey.

For savvy marketers, location is the key that can identify, deliver on and measure these precise moments, and facilitate instant connectivity. By matching real-time customer data to correct location context, brands can create innovative digital experiences that drive sales and increase loyalty.

As demonstrated by the case studies included in this paper, top brands are using location-based marketing to support four key developments in consumers’ buying journey. These include:

1) Keeping Pace With Consumer Expectations2) Bridging the Gap Between Online and Offline3) Reinventing the In-Store Experience4) Beyond Search and Social—A New Category

As these trends develop, location-driven campaigns promise to close the gap between online and offline worlds; browsing and buying; expectation and delivery. For marketing executives like Wells Fargo’s Lacorazza, the mobile phone is more than a tool; it’s now “the center of enablement,” allowing the “power of a [brand’s] physical presence” to intersect with “customers going about their daily lives.” And location data is the instrument that allows marketers to use mobile to tap into the most important moments in a customer’s purchasing journey.

In time, the most successful brands will be those that recognize and meet the consumer need for a tailored and relevant experi-ence. After all, consumers’ expectations are rapidly shifting to demand what they want, when and where they want it. Mobile and location can support this new mindset and create relevant experiences as disruptive changes in consumer buying behavior occur. It’s up to marketers to supercharge their marketing campaigns by making location a standard part of every consumer experience at the precise moment of consumer intent.


ACKNOWLEDGMENTS Forbes Insights and xAd would like to thank the following individuals for their time and expertise:

John Costello, President of Global Marketing and Innovation, Dunkin’ Brands, and current Chairman, the Mobile Marketing AssociationAngelique Krembs, Vice President of Marketing Activation, PepsiCo North America BeveragesMichael Lacorazza, Executive Vice President and Head of Integrated Marketing, Wells FargoJoe Laszlo, Vice President of Industry Initiatives, Interactive Advertising Bureau (IAB)Miles Marmo, Brand Experience Manager, Mike’s Hard Lemonade Co.Greg Stuart, Chief Executive Officer, the Mobile Marketing AssociationChristine Xu, Vice President and Chief Marketing Officer, McDonald’s China

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