Location Still Matters in Marketing

Stephen DeAngelis

January 20, 2014

Kirk Goldsberry reports, “In its 375 years, Harvard has only ever eliminated one entire academic program. If you had to guess, what program do you think that was and when was it killed off? The answer: Harvard eradicated its Geography Department in the 1940s, and many universities followed suit. The timing couldn’t have been worse, really.” [“The Importance of Spatial Thinking Now,” HBR Blog Network, 30 September 2013] Goldsberry, a visiting scholar at the Harvard Center for Geographic Analysis, explains why Harvard’s timing was so bad. He writes:

“Shortly after the elimination of Geography here at Harvard, the discipline underwent a quantitative and computational revolution that eventually produced innovations like Google Maps and global positioning systems, to name just two. Seventy years later we are paying for a prolonged lack of spatial thinking at American universities. There are too few classes that enable learners to improve their spatial reasoning abilities, with maps and visualizations being of course the most central artifacts to such improvements. The problem is simple: not enough people know how to make maps or handle spatial data sets. In the meantime, spatial thinking, visualization, contemporary cartography, and the other core competencies of geographic education have never been more relevant or necessary. … Data visualization is an emerging, important discipline, and spatial thinking — geography — is a fundamental skill for good data visualization.”

In a world that connects people virtually as much as it does physically, it might surprise some people that geography (or location) still matters. However, two points need to be made. First, even the virtual world has locations and maps associated with it; and, second, people actually exist somewhere in the physical world. Where they are (i.e., their location), at any given moment, is important and marketers should never forget that fact. Even the language that marketers use in their advertising could be impacted by location. For an interesting look at differences in the vocabularies used by U.S. residents, take the test offered by The New York Times that uses questions “based on those in the Harvard Dialect Survey, a linguistics project begun in 2002 by Bert Vaux and Scott Golder.” [“How Y’all, Youse and You Guys Talk,” 21 December 2013] Steve Farr, Senior Manager, Product Marketing at TIBCO Spotfire, agrees with Goldsberry that visualization is important, especially for businesses. [“Location Analytics: Doing It Like Bond, James Bond,” Trends and Outliers, 31 July 2013] He writes:

“The reality is that the mundane and manual exercise of bringing piles of data together in a way that provides insight and leads to intelligent conclusions has evolved considerably in the past few decades. It is very quickly becoming highly sophisticated, instantaneous and all-the-more interactive – not only across data sources but the business itself. As a result, data analysis is increasingly becoming a priority function within many organizations playing a key role in:

  • Driving strategy
  • Informing business decisions throughout
  • Identifying high-risk scenarios
  • Uncovering opportunities
  • Providing a safe environment for testing hypothetical business scenarios

If we were directing the movie ‘The Life of our Business’ we would use maps – maps of our existing and potential customers, demographic segmentations and densities, maps of our locations and our supply-chain logistics, competitor location and performance etc. We would highlight breakdowns in the factory, log jams in the packing area or hot spots in our retail stores on maps. In short, maps would have a starring role. With 80% of available business data having a geographical location associated with it – it only makes sense that we leverage the location context of the information available to us. Furthermore, we understand the physical world much faster and more comprehensively through what we see. And for this reason alone, using geo-visual representations of data has a key advantage over any other way of representing data, period.”

Nowhere are location-based insights more important than in marketing. Sara Angeles asserts, “Opportunity awaits when you’re in the right place at the right time. That’s the exact principle behind location-driven marketing.” [“5 Ways to Get the Most Out of Location-Based Marketing,” BusinessNewsDaily, 19 September 2013] Location-based marketing can be either virtual (i.e., based on the location of one’s IP address) or physical (i.e., where a consumer is actually located in the real world). Tenesa Ellis calls digital location-based marketing “geo-targeting.” She asserts, “Geo-targeting is the allowing of content, usually marketing or advertising related, to reach potential customers based upon IP address, which is geographically unique information usually based on search query results.” [“How Businesses Can Utilize Geo-targeting to Drive Sales,” Sociable Blog, 3 September 2013] Geo-targeting, like all location-based marketing, begins with data collection and analysis. Ellis writes:

“Before the process of geo-targeting can begin to work its magic in driving sales, a business first must know who their target consumer is. These questions should be answered first. First, define who your target audience is. Analyze what their consumer behavior is. If you have analytics handy, this is the time to use them to figure out who, what, where and why people buy your product and what campaigns you have used that have and have not worked. … Geo-targeting is great because it allows for the advertisements that you create to reach the targeted consumer base because of advanced technology utilizing IP data, which can show the location of the user and their search queries. Speaking of IP data information, geo-targeting can be implemented on a city, state, and zip code level. This way the suggested banner ad that was created can reach your target customer, so the reach can be either on a larger or small scale depending on the advertising objective. Once you have pinpointed the targeted consumer demographic and have done some market research, (very important) the digital display advertisements can work their magic and send traffic to your business and create brand followers.”

Physical location-based marketing also begins by collecting and analyzing data; but, the most important piece of data involves the real-time location of a consumer. Angeles writes, “Location-driven marketing uses a customer’s current location to send tailored mobile marketing promotions at the most opportune place and time.” Rip Gerber, CEO of Locaid, a company offering location as a service (LaaS) offerings, provided Angeles with five “tips on location-driven mobile marketing best practices.” They were:

1. Put your customers first. Your customers are digital omnivores. They use a number of digital channels to interact with your brand. Make sure you have an integrated strategy that is optimized for whatever channel they use to interact with you.

2. Use the right tools. Make sure you choose a campaign management platform that is simple to employ; has the location reach you need to get to 100 percent of your customers; gives users the ability to manage their profile, interests and frequency of offers received; and can deliver highly contextual and targeted offers so opt-out rates are very low.

3. Don’t rely on an app. More than 4 billion people in the world still have feature phones. That’s 4 billion people your app can’t reach. Leveraging Locaid’s LaaS platform, your offers can reach 100 percent of consumers, whether they are using a smartphone, feature phone or driving a connected car.

4. Only use location as necessary. Location provides a highly effective way to send locally targeted, relevant content to your customers at times that most benefit your business. Having happy hour? You only need to look up the location of your customers and send them a promotional message once a day to drive traffic. Sales slow between 10 a.m. to 11 a.m.? Look up the location of all customers in the area at 9.30 a.m. and send them a coupon to redeem when they buy something during (what used to be) that slow hour.

5. Analyze. Location gives you a new data point for analyzing customer behavior. The key is to make sure you turn that information into market intelligence for well-informed business decisions.

Farr and Goldsberry remind us that visualization of location-based data helps increase our understanding and insights. “In this big data world we may have to accept that our ability to analyze our business grows at a slower pace than the pace at which the data is flowing in,” writes Farr, “but we don’t have to accept our limitations in leveraging this wealth of information or go it alone. Benefiting from a geo-visual representation of our data is one sure way to speed up our understanding and reaction time.” Goldsberry adds, “Without geography — or any teaching that emphasizes spatial thinking — the focus will remain on the data, and that’s a mistake. Yes, data are undeniably important but they are not holy. Data are middlemen. Even the term ‘data visualization’ overemphasizes the role of the middleman, and mischaracterizes the objective of the activity. Nobody wants to see data; nobody learns from that. The best visualizations never celebrate the data; instead they make us learn about worldly phenomena and forget about the data.” As real estate agents know, location matters. Farr and Goldsberry emphasize that you can better judge the value of locations if you can see them in a meaningful way. I believe that location-based marketing has a bright future, but only if we master both the data and its visualization.