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Alistair Goodman heads operations at Placecast, a location-based marketing company that works with mobile operators, credit card providers, brands and, more recently, with payment companies to deliver offers to consumers in real time using location and other intent data. Best known for its SMS product ShopAlerts, Placecast helps retail brands deliver offers to consumers in a geofenced area. Goodman spoke with eMarketer’s Lauren McKay about the evolution of location-based marketing and why he views the convergence of location and mobile wallets as the future for location-focused strategies.
eMarketer: What have been the biggest shifts in location-based marketing in recent years?
Alistair Goodman: There is increasing consumer acceptance of their locations being used to deliver something of value to them. Consumers who are in our programs six months or more say they actually perceive the program as becoming more valuable over time. They come to expect offers based on where they are, and they also believe the program is learning the kinds of things that they’re interested in.
eMarketer: What types of data are necessary to gather in order for a brand to truly understand consumer behavior and take action? And how are you seeing brands overcome the data challenge?
Goodman: Interestingly, a handful of data variables are actually very predictive of the lion’s share of consumer behavior. For example, where someone is, the time of day that they’re there and a handful of consumer preferences they’ve actively expressed can be more than sufficient for delivering a relevant program for a brand. You can append a lot of other data to that to increase the relevancy of the offer and what the consumer may decide to purchase. That can include things like any CRM data that you might have about the user, past purchase behavior, email activity and things like that.
All of that is just additive. Someone who has raised her hand and opted in has said she’s interested in your brand or your category, and they’re near a location where you’re able to send them a tailored, compelling offer. All of that goes a long way and doesn’t require a significant amount of data from the brand to be able to do.
eMarketer: What are some examples of the effectiveness of delivering relevant location-based offers?
Goodman: Pizza Hut ran a program through our partner O2 in the UK and they saw that location-based marketing was 142% more efficient in delivering incremental sales revenue than their other measured campaign average. It was about four times more efficient than TV and about two-and-a-half times more efficient than online. That’s fairly consistent with what we’re seeing across all our brands. In our carrier-based programs, which are run by mobile operators, on average, a little more than half of consumers are visiting stores frequently as a result of being part of the program. About a quarter are actually purchasing as a result of receiving a message.
The majority of our results are based on consumer panels that we build for each program that we run. We also do survey-based research, which can be combined with trackable purchase data through things like coupon codes and discount codes. When we run credit card-linked offers, we have more of the direct ROI data for those programs.
eMarketer: The convergence of location and mobile payments surely makes sense, but what are some of the challenges there?
Goodman: There are only a couple, but they’re pretty substantial. There is now a huge proliferation and interest in deploying wallets. Mobile operators are looking at deploying wallets. Credit card companies are looking at deploying wallets. And so, the question is, “Who's going to win the wallet war?” Our view is, we can deliver offers into any and all of those offerings, but there is certainly going to be a proliferation of them within the next 12 to 24 months.
eMarketer: How important is social to location-based marketing?
Goodman: In general, social has a role as a recommendation engine. When you tap key influencers, they, in turn, propagate that to their own network. It’s interesting to look at when consumers choose to share their location information. For example, you might want to publish that you are at a fancy restaurant because it’s a status thing, but the whole world doesn't need to know that you’re at Dunkin’ Donuts. There’s an interesting set of choices around location sharing.
A longer version of this interview is available to eMarketer Total Access clients only. If you’d like to learn more about becoming a Total Access client, click here.
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