What’s Exciting in Mobile Marketing? – Location Based Advertising (LBA)

In this multi-part post, we continue to take a look at three technologies in particular that will have a potentially huge impact on mobile marketing, whether used independently, or in various combinations: mobile barcodes & tagging, Location Based Advertising (LBA), and augmented reality.  This second post will focus on Location Based Advertising (LBA). 

Location Based Advertising

How does it work?

Part of a broader category of Location Based Services (LBS), mobile Location Based Advertising (LBA) takes advantage of Global Positioning System (GPS) technology.  While we have traditionally thought of GPS as a navigation based aid, things have definitely evolved.  A growing number of smart phones now have GPS technology integrated into them, allowing their locations to be precisely tracked by signals sent by the GPS satellites high above the Earth. 

What capabilities does it provide to marketers?

While the science of GPS and Location Based Advertising may not be all that important to us, the capabilities they bring are definitely important.  Marketers and service providers can now make use of the geographical position of smart phones to send very specific, targeted information to their owners.  This information can come in the form of nearby stores & services,  customized ads, offers, coupons, and loyalty-based offerings.  And, as we have seen and heard so many times, the more specific, targeted, and relevant a marketing message can be, the better the results we can expect. 

Great, but does it have legs?

A quick look at the numbers says yes, LBA absolutely has legs.  First, consider the sheer number of mobile devices.  There are roughly 4.6 billion mobile phones out there globally, with an ever-increasing number of them coming with GPS capabilities.  Second is the size of the overarching Location Based Services (LBS) market.  At around 41 million users in 2008, this is expected to grow to nearly 96 million in 2009.  Finally (and perhaps most importantly), there is the revenue picture.  Gartner forecasted in June of 2009 that the global LBS revenue will more than double from just under $1 billion in 2008 to over $2.2 billion in 2009.  You can bet that Location Based Advertising will play a large role in this growth.

The reality is that our smart phones are really becoming powerful handheld computing devices that we’re depending on for a wider variety of daily uses, and are perfectly suited for LBA.  If potential privacy and security concerns can adequately be addressed, the only real question in my mind is how responsive U.S. based consumers will be to LBA and mobile advertising.  However, given that in Spain over three quarters mobile phone owners already receive ads, in France nearly two thirds do and in Japan over half do with relatively high response rates, I believe that the success of LBA in the U.S. is a near certainty.   

Want to learn more?

Admittedly, it was hard to settle on the title of Location Based Advertising (LBA) for this particular post.  While conventional wisdom places LBA within the broader category of Location Based Services (LBS), I’ve consistently been finding that terms like LBA, LBS, mobile marketing, and mobile advertising are often being used interchangably – most likely because this vast set of mobile capabilities is still in its infancy, and there is not a great deal of standardization yet.  Therefore, don’t be thrown by some of the link titles below.  Each of them can help you understand what this technology entails and how it is being used:

2009: The Year of LBS (Location-Based Services)

GPS + Mobile Marketing = Goodness

Mobile GPS Opens Doors to Content, Commerce

New Platform Offers GPS Location-Based Ads

Burger King, Subaru Trial Location-Based Mobile Advertising

Placecast Raises $5 Million for Location-Based Advertising Platform

Got feedback?

I’m always interested in hearing your questions, comments, and points of view. Please let me know what you think!

– Jim S.