Location-based marketing is the new newspaper insert when it comes to targeted advertising. Though it has potential to generate the same kind of impact as a pre-print, the digital game layer makes it much more fun and creatively demanding than simply putting ink on paper. It enables big brands to make a splash and small businesses to reward their most loyal customers.
According to comScore, 65.8 million people in the U.S. now own smart phones, up eight percent from October 2010. Of these, comScore reported that 35.3 percent used apps -- which means that over 22.9 million people are using applications on their personal devices.
In fact, there are more people in the US who own a smart phone than who pay to read a print newspaper. In 1993, at their high point, newspapers in the US reported 62.5 million paid subscribers in 1993. By 2009, they were reporting a mere 45.6 million paid subscribers, according to the Editor and Publisher International Yearbook. The numbers continue to decline.
This means that roughly 30 percent more individuals in the U.S. carry a smart phone than buy a daily newspaper.
This article is a guide to how some major brands are approaching the pockets, hearts and minds of smart phone users and use location-based services to encourage engagement, sales, and awareness.
Innovating with location-based marketing
You have the opportunity to capture a customer and help them to make a quick decision while they're near or in your brick-and-mortar location.
Here are five examples of innovative ways that big brands and savvy marketers are taking advantage of new location-based technologies and using them to bring customers together around meaningful events and activities.
New York Public Library
In a move that embodies the public intellectual history of America and the perfect application of social media, the New York Public Library plans to celebrate its centennial smart phone style.
It recently launched a "Find the Future" Foursquare badge that encourages and rewards exploration of public libraries in New York City. It transforms visitors into library ambassadors who, via location-based check-ins, end up promoting library services, programs, and collections to their Foursquare friends.
Badge winners get a one-year Foursquare Friends Membership at the library that comes with exclusive member-only perks such as the opportunity to win free NYPL event tickets and participate in behind-the-scenes tours.
The library has also designed an app-based overnight scavenger hunt called "Find the Future: The Game." On May 20, 500 pre-registered participants will complete tasks during a special launch event, before the game goes live to the public on May 21. The tasks encourage players to explore the library and historical objects such as the Declaration of Independence.
In January 2011, JetBlue Airways became the first U.S. airline to announce an integration between their frequent flyer rewards program and Facebook Places. JetBlue GoPlaces participants receive 25 TrueBlue frequent flyer points every time they check in to an official JetBlue airport location using Facebook Places. Those who accumulate 5,000 or more points can trade them in for free flights. While this is not exactly immediate gratification -- it takes 200 airport check ins to earn a free flight -- it's still noteworthy.
The original GoPlaces program launched with a promotional event targeted at JetBlue's top markets. The first 100 customers to check in at key JetBlue airports including Logan International in Boston, Ft. Lauderdale-Hollywood International, Long Beach, New York's John F. Kennedy International, or Orlando International airport could get 100 points for a check in.
As with all ambitious registration integrations, though, it has its challenges. The integration is clunky. It rejected my username and password, making it frustrating to sign up and impossible for me to participate in the promotion. It also lacked clear messaging within the app as to the benefits of participation.
Whether or not their GoPlaces promotion nets huge successes, there is without doubt a lot to be learned from JetBlue's gutsy social media playbook. It has about 1.6 million Twitter followers and 480,000 likes on Facebook -- compared to 174,000 Twitter followers and 136,000 likes for Delta, and 196,000 Twitter followers and 152,000 likes for American Airlines. However with all of their integration work and testing of the social media waters, it's still hard to compete with Southwest Airlines: This social media darling has 1.1 million Twitter followers and 1.4 million likes on Facebook.
As originally demonstrated by a pair of Jimmy Choo shoes in the company's 2010 Foursquare treasure hunt, brands and manufacturers can find creative ways to use location-based marketing to inspire and engage their most loyal fans.
Reebok has done just that. By partnering with Dick's Sporting Goods and the location-based gaming platform SCVNGR, it has introduced a new geo-social game to promote their line of RealFlex shoes.
This heralds Reebok's first experiment with location-based marketing, according to ClickZ. When SCVNGR users check-in at Dick's Sporting Goods stores and complete challenges such as taking and uploading pictures of Reebok brand products, they receive a $10-off coupon for a pair of RealFlex shoes. Coupons can be used at any of the 220 participating Dick's Sporting Goods Store locations.
Participants in the SCVNGR game may also be entered into a sweepstakes for a chance to win one of the 50 RealFlex shoes Reebok is giving away, as well as other Reebok gear.
Another exciting geo-social experiment from Reebok's digital marketing playbook is a tattletale app called "The Promise Keeper" that allows users to schedule running dates with themselves and then employs GPS to determine the distance and time completed in a run. The purpose of the app is to help users track and maintain their fitness goals. If you fail to keep your date with fitness, the app messages your friends that you're a sloth. If you are a goody two shoes and keep it, then you get a round of applause.
A step behind early-adopter Macy's, in November 2010, Target became the first mass-discount retailer to implement the location-based retail experience app shopkick. The program is described by shopkick CEO Cyriac Roeding as a "cross-retail rewards currency." The app rewards customers with points, coupons and other rewards just for walking into a Target store. The company was the first shopkick partner to offer instant, scannable mobile coupons directly within the app.
"At Target, we recognize our guests are connected through a multitude of mobile and social networking technologies," said Steve Eastman, president of Target.com, in a press release. "Innovative mobile applications, like shopkick, provide a fun and engaging way for our guests to connect with Target, while earning valuable rewards which can be easily redeemed for future in-store purchases."
Target customers can download the free shopkick app that allows them to check in at stores to earn point called "kickbucks" and other rewards by entering specific areas of a given store. Kickbucks can be redeemed for incentives such as Target Gift Cards or charitable donations.
Demonstrating a serious but limited investment in the shopkick experience, Target initially rolled it out to 242 stores in top markets like Chicago, Dallas, Los Angeles, Miami, Minneapolis, New York City, and San Francisco. The retailer operates 1,752 stores across the U.S -- so it will be interesting to see how its experiment fares and whether we'll see an expanded roll out for holiday 2011.
Global fashion retailer H&M works to bring its customers fashion and quality at the best prices possible -- with a serious dose of fun. Augmented reality and virtual goods came to H&M in the fall of 2010 in the form of a GoldRun treasure hunt. The H&M promotion allowed customers with the GoldRun iPhone app to engage with virtual H&M apparel and accessories in front of any of the fashion retailer's 10 Manhattan locations. Participants would simply select the items that piqued their curiosity then photograph them in order to receive an instant 10 percent discount on any H&M purchase. The app also made it easy for users to share their photos with Facebook friends.
GoldRun started their journey with a virtual fashion show for H&M. Since then, the GoldRun augmented reality team produced a slew of creative virtual treasure hunts or "runs" for big brands. From virtual pop-up stores for the sneaker brand Airwalk, to virtual fitting rooms for the Tommy Hilfiger's Prep World, a Spring/Summer 2011 collection -- and even a campaign for Oklahoma University, the flexible gaming platform seems to allow for endless custom location-based marketing possibilities.
Given the growing chasm between paid newspaper circulation and smart phone usage, it is likely that location-based marketing will start to co-opt the role of the newspaper inserts for major retailers and brands. The time for big brands to test location-based marketing strategies is now, while early-adopter customers are both curious and forgiving. Platforms like shopkick, GoldRun, Foursquare, and Facebook Places make it reasonably affordable to participate without having to build out custom applications.
Location-based marketing can be overwhelming if you are a national or global brand, so if you need to limit scope in order to move a campaign forward, consider limiting your test implementation to geographic markets with heavy smart phone penetration and a loyal customer base. Give it a try. You'll learn something, I promise.
Sonia Meisenheimer is a digital marketing consultant.
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