Location data showing not just where someone is now but also where they’ve been in the past can be a highly effective way for advertisers to “nudge” consumers towards making a purchase, according to a new report from global media agency Mindshare.

The Location Matters report details how brands, such as M&S, Amex and Mazda, are using GPS data to understand individuals’ lifestyles, make themselves a part of local communities and provide “hyper-local” messages that target consumers within close range of a store.

Just 20% of people in general say they’re comfortable with the idea of brands using GPS data from their phones to target them, but when faced with more practical scenarios of how this would work the response is much more positive.

For example, 43% of people said location-based communications is helpful if it comes from a shop they already use.

The report claimed that by understanding someone's “past places” – where they’ve been in the past 30 days – brands can identify groups of people with shared interests.

When M&S wanted to reach “foodies”, for example, it targeted not just its own shoppers, but also people who had recently shopped in Waitrose or London’s Borough Market.

And targeting a group of people from a particular geographical community can also help a brand make themselves part of that community.

When Amex wanted to support small, local businesses as a way of simultaneously demonstrating their customer rewards and recruiting more SME merchants, it found that messages such as “Balham. Let’s Shop Small” were effective.

For advertisers looking to drive sales from consumers in a store or nearby, “hyper-local” communications, such as personalised offers as they enter the car park or when they are within walking distance, can be highly effective. Mazda dealerships have used this approach to deliver messages tailored to the dealership a potential car buyer is nearest to.

The report’s authors make three key recommendations:
  • Brands should get involved with their local community.
  • Localise messaging to the right level for each brand.
  • Use the full range of location-data sources.
The authors cautioned, however, that as location-based ad opportunities have become more sophisticated, there is a danger that they become disconnected from wider brand-building activities.

“The modern marketer needs to consider how location-based marketing can be used alongside both local and national media. Brands need to strike a balance – appealing locally but without investing the time, budget or resources required to localise to the nth degree.”

Sourced from Mindshare; additional content by WARC staff