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
Location-based
Marketing

Smart Pack
Sample only, please download the full report from:

http://econsultancy.com/reports/location-based-marketing-smart-pack

Location-based
Marketing

Published March 2011 Econsultancy London Econsultancy New York
4th Floor, 91-93 Farringdon Rd 41 East 11th St., 11th Floor
London EC1M 3LN New York, NY 10003
All rights reserved. No part of this publication may be United Kingdom United States
reproduced or transmitted in any form or by any means,
electronic or mechanical, including photocopy, recording Telephone: Telephone:
or any information storage and retrieval system, without +44 (0) 20 7269 1450 +1 212 699 3626
prior permission in writing from the publisher.
http://econsultancy.com
Copyright © Econsultancy.com Ltd 2011 help@econsultancy.com

Contents

1. Introduction ..................................................................... 1
1.1. About Econsultancy ..................................................................... 1

2. What... is location-based marketing? .............................. 2
3. Why... is location-based marketing important? .............. 5
4. Who... should I know about? ........................................... 6
5. Market trends .................................................................. 9
5.1. Data and statistics ....................................................................... 9
5.2. Marketplace developments ....................................................... 10
5.2.1. Applications are leading the way .......................................... 10
5.2.2. Platforms are converging ........................................................ 11
5.2.3. Control of the messaging is increasingly being given to
users ........................................................................................ 11
5.2.4. Facebook is trying to dominate the space .............................. 11

6. Case studies .................................................................... 12
6.1. Facebook ..................................................................................... 12
6.2. Foursquare.................................................................................. 12
6.3. Gowalla ....................................................................................... 12
6.4. MyTown ...................................................................................... 12
6.5. Whrrl........................................................................................... 13

7. Recommended reading .................................................. 14

Location-based Marketing Smart Pack
All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage
and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2011

1.1 Introduction
Great decisions depend on great information. Econsultancy’s ten-year position at the eye of the
digital storm gives it unique insight into newly-emerging technologies and techniques.

This report is the second in a series of smart packs developed by Econsultancy and is designed to
explore emerging trends and new areas relating to online marketing. These smart packs are being
created specifically to provide cutting-edge insight into niche, front-line areas of digital marketing
and e-commerce.

We understand that many marketers are time-poor within their daily roles. The report has been
produced with this in mind, to give a manageable snapshot of the key questions surrounding this
particular digital discipline.

The report includes sections on:

 Market trends and developments.
 Third-party statistics.
 An overview of the key players in the industry.
 Case studies of companies using location-based marketing tools and techniques.

1.1 About Econsultancy
Econsultancy is a digital publishing and training group that is used by more than 200,000
internet professionals every month.

The company publishes practical and timesaving research to help marketers make better
decisions about the digital environment, build business cases, find the best suppliers, look smart
in meetings and accelerate their careers.

Econsultancy has offices in New York and London, and hosts more than 100 events every year in
the US and UK. Many of the world‘s most famous brands use Econsultancy to educate and
train their staff.

Some of Econsultancy’s members include: Google, Yahoo, Dell, BBC, BT, Shell, Vodafone, Virgin
Atlantic, Barclays, Deloitte, T-Mobile and Estée Lauder.

Join Econsultancy today to learn what’s happening in digital marketing – and what works.

Call us to find out more on +44 (0)20 7269 1450 (London) or +1 212 699 3626 (New York). You
can also contact us online.



Location-based Marketing Smart Pack Page 1


2. What... is location-based marketing?
Also known as geomarketing, location-based marketing is where an organisation uses the physical
(geographical) location of a consumer as a leverage point for purposes of advertising, engagement
or commerce.

Location-based marketing (LBM) has digital processes at its very core and is an ideal way of
identifying and targeting consumers within a specific location, either directly or by encouraging
engagement.

LBM is a growing into a very broad digital arena which can work across a variety of technologies
within desktop computing and mobile handsets. Currently the focus is on the latter, given the
recent meteoric rise of social media and mobile use, but the developing opportunities offered by
more established digital platforms should not be ignored.

3. Why... is location-based marketing
important?
There are two main reasons why marketers should pay close attention to LBM: it allows users find
you directly and in return it allows you to find users.

Given the widespread growth of channel drivers like social media and smartphones, LBM really
should not be ignored.

There has been a visible shift away from more traditional LBM techniques, such as directory
listings, local search engine results and location-based web content. These are increasingly being
replaced with complex, fluid technologies and platforms such as social networks, mobile
applications, SMS discount vouchers and more.

Because of the depth and breadth of location-based marketing, advertisers now find that the
possibilities are almost limitless. As a few examples, LBM can:

 Display search advertising (paid and natural) based on a geographical location.
 Deliver marketing messages or promotions directly to mobile devices through Bluetooth,
SMS, MMS etc.
 Allow users to share their location and interactions with others across their social networks.





4. Who... should I know about?
Blippy
Blippy is still early in its development, but fundamentally, it’s a social network
which allows consumers to share their purchases publicly, meaning that any online
and offline products they buy are immediately seen by their friends. It also allows
users to discuss and compare products and services within their networks. The
implications of this in terms of location marketing are yet to fully emerge but
essentially, users will begin to share purchases immediately at physical locations,
rather than this being confined to an online activity that takes place at a later time.

Brightkite
Aimed at those who want to build up their personal social network, Brightkite
connects users with existing friends, but also allows them to meet new people based
on their location. Users can post photos and notes against a specific check-in from a
mobile device, with other people able to make comments. Updates can also be
shared on Twitter, Facebook and Flickr, all with the ability to be geotagged.

5. Market trends
5.1 Data and statistics1
 Gartner predicts that the number of location-based service users will grow globally from 96m
in 2009 to more than 526m in 2012. [Source: Gartner]
 26% of mobile users regularly use a map, navigation tool or similar service that automatically
determines their current location. [Source: MMA and Luth Research]
 10% of mobile owners use location services at least once a week. [Source: MMA and Luth
Research]
 26% of people plan to connect with social networks through location-based features. [Source:
JiWire]



1 All statistics taken from Econsultancy’s Internet Statistics Compendium



5.2 Marketplace developments
The location-based marketing landscape is developing and evolving at a rapid pace. Identifying
individual developments is extremely difficult, especially as new platforms are emerging on a
regular basis, dictated by advances in technology and shifts in user uptake. However, four key
elements can be seen within the marketplace. These are explained below.

5.1.1 Applications are leading the way
Global mobile data traffic more than doubled during 2010. Although smartphones only represent
13% of current global handsets, they account for more than 78% of total global handset traffic. 2

For LBM, this is an obvious opportunity. The location-based elements that can be leveraged
through mobile phones already exist, but are likely to be done so through the use of apps. Already
the vast amount of LBM interaction comes through mobile applications, as seen in the list of the
current notable players in Section 4.

6. Case studies
6.1 Facebook
 As part of Facebook Deals, fashion company Benetton has launched a new online charity
fundraising scheme, donating £2 to the Slums Information Development and Resource
Centres every time one of its fans checks into a store via Facebook Places.
 Nike’s promotion of its Varsity Destroyer jacket saw it teaming up with Koi Fusion, a popular
portable food stall in the US. Users were given clues via Twitter to find the stall’s location and
could then check in on Facebook Places to order from a secret menu and get the chance to
receive a free jacket on the spot.

6.2 Foursquare
 In an effort to secure new, digital-savvy readers, the Financial Times gave Foursquare users
the ability to temporarily bypass FT.com’s pay wall when they checked in at specific locations.
 Last year, Starbucks rolled out a national offer across the US, through Foursquare. Becoming
a ‘mayor’ of an individual shop enabled the user to redeem a $1-off coupon for coffee. Users
could become Foursquare ‘baristas’ by checking in at five different Starbucks locations.

6.3 Gowalla
 Chevy and Gowalla formed a joint partnership at the 2010 SXSW event to give users a free car
service to their hotels if they checked into the airport after landing.



2 http://econsultancy.com/uk/reports/global-mobile-statistics



7. Recommended reading
 Location based services - where next?
Location offers businesses of all sizes a real opportunity to streamline and improve their
entire customer experience, fully integrating web and print offers with simple, convenient
payment and collection options. Coupons are a good start, but it remains to be seen which
companies will make the most of location.
http://econsultancy.com/blog/6171-location-based-services-where-next

 Geomarketing: Ten Foursquare marketing campaigns
LBM social network Foursquare just might be the internet’s ‘next big thing’. While it isn’t
anywhere close to the size of Twitter or Facebook, the young company last month passed the
million user mark.
http://econsultancy.com/blog/5845-10-foursquare-marketing-campaigns

 In the geolocation wars, the next step will be content
Geolocation is a hot ticket item right now, with companies large and small getting into the
social check-in game. But the gaming features are only one aspect of geolocation. According to
the founders of Gowalla and Foursquare, geotargeting is going places with all that information
their companies are collecting.
http://econsultancy.com/blog/6078-in-the-geo-wars-the-next-step-will-be

 How beneficial is Foursquare for businesses and individuals?
Search expert Kevin Gibbons recently joined Foursquare to find out what all the fuss was
about.
http://econsultancy.com/blog/6460-how-beneficial-is-foursquare-for-businesses-and-
individuals

 SMWNY: When will location-based services stop being fads and start getting
real?
Twitter is over three years old and many people still don‘t get it. Just last week, The New
Yorker’s George Packer called it “crack for media addicts”. But will real-time oversharing
services make it into the mainstream?
http://econsultancy.com/blog/5375-smwny-when-will-location-based-services-stop-being-
fads-and-start-getting-real





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