By: Angela Soric
Location Based Advertising or LBA is a unique and personal form of marketing that uses mobile location-tracking technology to target consumers based on their current location. This form of marketing is meant to discreetly present ads, offers, coupons, or other promotions, based on users opted-in preferences.
“The arrival of a truly mobile Web, offering a new generation of location-based advertising, is set to unleash a “huge revolution”. states Eric Schmidt, CEO of Google
With rapidly increasing consumer demand for GPS–based systems and increasing availability of location information, marketers can directly target mobile audiences with meaningful messages. Sales of mobile devices with integrated GPS are forecasted to grow to 720 million units in 2011 from 180 million units in 2007, according to research firm In-Stat. This increase in demand can provide immediate benefits to consumers exactly where and when they’re making purchasing decisions.
Advantages
There are two main approaches to LBA, the push approach delivers ads determined by a devices location. In contrast, the pull approach delivers ads when users request specific information (For example: Someone visiting New York searches for a local Italian restaurant, they may then receive a coupon based on their inquiry).
Because this form of marketing is so personal, this presents both opportunities and challenges. LBA provides advertisers the ability to build brand awareness and loyalty as well as drive purchases. On the other hand, reluctant consumers may view this marketing technique as predatory, and privacy concerns may lead to a high number of opt-outs.
Not only is there a privacy issue involved, but text message ads are also the least likely to be trusted by consumers, according to a Nielsen Internet survey.
There are also different types of services within each method: not requested ads send information to users until they request not to receive them anymore. Indirectly requested services require permission before users receive advertisements, these service options may help remedy suspicions.
The future of LBA is yet to unfold, there are many benefits for both users and businesses. However, the real question remains, how much personal information is a customer willing to give up for $1 off a latte.
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