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Consumers Love Mobile Marketing, Location-based Services

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Posted November 11, 2014 By Phil Britt     Feedback

Mobile marketing, particularly location-based mobile marketing, provides big opportunities for businesses and benefits for consumers.

Mobile marketing works, yet most marketers today have yet to seize on the opportunity, according to Greg Stuart, CEO of the Mobile Marketing Association.

"Nobody resists mobile today. There are inflection points where you can create great change. Mobile is part of that today," said Stuart at the recent ClickZ Live Chicago conference, noting that Uber and similar companies that optimize mobile for customers are growing rapidly and disrupting their respective markets.

Smartphone penetration worldwide is about 2 billion, or a little less than a third of the world’s population. When combined with feature phones, the figure rises to 85 percent penetration, according to Stuart. Cisco predicts a 66 percent compound annual growth rate for smartphones over the next five years.

Even companies as basic as fertilizer producers are getting as much as 60 percent of their communications via mobile, according to Stuart.

Marketers for the most part recognize the impact, with 76 percent saying it’s the best way to reach the consumer and 72 percent saying it’s the best way to build ROI, according to Mobile Marketing Association research. Yet some companies have yet to add mobile to their marketing mix, with 47 percent of those who haven’t citing tight budgets and 46 percent citing the difficulty of measuring the impact.

In work with AT&T, however, the MMA found there was a tremendous impact in shifting advertising dollars to the mobile platform. AT&T had advertised a new smartphone, with 92 percent of the budget allocated to television, 5 percent to online and 1 percent each to mobile and print. Yet post-campaign research showed that mobile advertising delivered twice the impact per dollar spent compared to television.

The optimal mobile advertising spending for this campaign would have been 16 percent of the budget, said Stuart, who added that other research has shown similar uplifts.

Location-based Marketing

Sixty-one percent of application users have a better opinion of a brand when it offers a good mobile experience, according to Cisco. The impact is highest when tied with location-based uses. One shopping mall, for example, reported 1 million Wi-Fi connections, with 500,000 unique customers and 60 percent opt-in for promotions, shortly after installing an app with location-based features.

Location-based services are expected to reach $50 million by 2019.

Nearly 40 percent of all shoppers use in-store Wi-Fi to browse a retailers’ website while shopping in the store and nearly half (46 percent) buy products in the store after conducting online research with a mobile device. Those numbers are even higher for younger consumers. Two-thirds of millennials use mobile devices in stores.

"Retail knows what you respond to. Stores want to know when you go to different areas, your primary means of interaction and the money spent per customer," said Brendan O’Brien, Cisco director of global marketing/sales.

Despite its obvious power, however, mobile marketing doesn’t stand alone, O’Brien told attendees of the ClickZ event. Half of all consumers look online for products and offers to use in the store, using a combination of PCs, tablets, laptops and handheld devices to find such offers.

Similarly, mobile marketing needs to be personalized, O’Brien added. "The customer will not engage if the content is not relevant."

In a Cisco survey, 46 percent of respondents said they wanted personalized promotions delivered via a touchscreen or smartphone, while 38 percent said they wanted personalized product offers. Another 30 percent wanted personalized shopping lists, with personalized service cited by another 30 percent.

Beyond retail shopping, mobile usage and consumer expectations are growing across industries, O’Brien said. Hotel guests want free Wi-Fi so they can see available services and amenities of the facility, for example.

"Mobile is a trend that is not going to go away," O’Brien said. "The better the engagement on the device, the happier the customer is."

Mobile Marketing's Business Benefits

At Las Vegas’ Bellagio for example, visitors can download an app that enables them to navigate around the massive facility and to purchase last-minute tickets to shows. Depending on a visitor’s location, the app delivers information on the nearest restaurants, services, bars and lounges.  Members of parent company MGM International’s loyalty program receive discounts at the hotel’s restaurants, shops and wine bars.

Starwood Hotels and Resorts is enabling customers to check in automatically and even unlock their room doors with a mobile app.

Similarly, travelers want to use mobile to locate departure gates quickly and to receive updated itineraries. Health care organizations are starting to make scheduling of appointments, lab results and other information available via mobile apps. Students use mobile apps to find their way around campus and to receive safety alerts.

Location-based information is a two-way street, O’Brien noted. Beyond customers receiving offers and information, companies can use tracking data to find the number of people in different venues and different zones, and to uncover common traffic patterns and find where people spend their time.

So a theme park can use this information not only to direct people to the nearby food stand or restaurant, but also to determine which venues need more staff at particular times and to create better traffic flows. And hospitality venues can use this type of customer flow information to determine optimum cleaning schedules for rest rooms and other areas.

Phillip J. Britt writes for a number of technology, financial services and business websites and publications, including BAI, Telephony, Connected Planet, Savings Institutions, Independent Banker, insideARM.com, Bank Systems & Technology, Mobile Marketing & Technology, Loyalty 360, CRM Magazine, KM World and Information Today.

 

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