Geolocation – A World to Discover

August 27 2012
by The Barometer Team

It all started with smoke signals. For centuries, sailors and travelers used celestial navigation. Then along came the magnetic compass. In the modern era, the pace quickened: radio triangulation and satellite GPS were followed by automotive GPS navigation, GPS-enabled smartphones, location-based apps, games, social networks…

Today, scientists say that providing they had enough data about a person’s past movements, they could forecast that person’s future location with 93.6% accuracy (Wall Street Journal).

With all this happening, what does geolocation mean for businesses active on the Internet?

The answer is both simple and inspiring: in a nutshell, geolocation makes it possible to generate website content – in real time – that is personalized  according to the user’s location, navigation history, and sociodemographic profile.

A quick overview of the current trends and data indicates provides the following highlights:

  • Consumers are increasingly adopting geolocation – whether they are aware of it or not.
  • Geolocation, particularly Location Based Marketing (LBM), offers increased potential for local commerce.
  • Web marketing strategies do not yet tap the potential of geolocation (this is likely to be especially true in Quebec, considering past Barometer have shown that the province lags far behind the US in several areas of digital marketing*).

(*This is painfully obvious in several Barometer posts: Ineffective use of social media by Canadian companies; Few Quebec companies use Twitter as a marketing tool; Quebec Companies Not Getting On the Bandwagon of Online Video.)

Geolocation trends

A.    On the consumer side – “connected” buying

  • The number of geolocation users in the U.S. doubled between October 2011 and May 2012 (DigitalMediaWire).
  • In February 2012, 74% of U.S. smartphone owners received real-time location-based information on their device, compared to 55% in May 2011 (Pew Internet & American Life Project report).
  • Privacy concerns are fading, as a large proportion – 58% – of consumers who have a smartphone use location-based applications (ISACA).

Research shows that 80% of US consumers are willing to share a portion of their location data if:

  • They get something in return.
  • They retain control of the data.
  • The data is not shared (MobileSQUARED).

B.    On the business side – location-based marketing
According to some experts, location-based marketing is a top trend, mainly because of its advertisement potential for small businesses. This is backed by research:

  • In 2009, Websites influenced 42% of total retail sales (in-store sales) through online search.
  • By 2014, the number is likely to reach 53% of total retail sales (Forrester).

This clearly indicates that a strongly localized website can be vital in helping a local business draw customers. Hence the fast-paced development of location-based marketing (LBM).

LBM, which aims to direct consumers to local commercial venues, uses not only local advertising (papers, local radio stations and television channels, billboards, etc.) but also increasingly sophisticated marketing tools, e.g.:

  • location detection services
  • geolocalized content for desktops and mobile websites (Seven Boats)

Shopping + Mobile

Already, 52% of adult mobile users rely on their devices while shopping in local stores (Pew). During the last holidays (2011):

  • 59% compared prices with those of other online and offline retailers
  • 38% dialled a friend for advice
  • 24% checked out reviews (eBay, Whereconference)

As for their decision:

  • 35% of shoppers who searched on their mobile device made a purchase in the store
  • 37% didn’t make any purchase
  • 8% purchased the item elsewhere

More than 50% of those who regularly shop using their phones presently feel comfortable spending over $100 on a mobile purchase (SmithGeiger LLC, eBay, Whereconference).

Not surprisingly, retailers expect mobile revenues to increase considerably (PayThru).

Also, in a not-too-distant future, mobile devices will feature virtual wallets and start replacing credit cards as a popular method of payment at retail. According to experts, this will open many possibilities by intersecting transactions, social shopping, and physical location (betakit).

Discovering Geolocation Marketing

Geolocation is expected to have a major impact on the marketing mix: fuelled by geolocation, local advertising in the US could grow from approximately 25% of all US advertising spending in 2012 to almost 30% by 2016 (eMarketer).

It might be useful to point out that geolocation does not rely solely on applications or user-driven data, as is commonly believed.

Although they are often overlooked, simple techniques based on IP addresses offer highly reliable results, even for mobiles. Also, they make it possible to circumvent the problem of user adoption (Smart Insights).

One expert, for example, obtained 30% to 300% higher response rates and 6 à 7 times higher conversion rates for “geo-targeted” content (Smart Insights) using IP data.

The potential in terms of personalization is enormous.

In the case of mobiles, this could mean, among other things:

  • promotional or transactional applications and the retail industry
  • instant saving coupons
  • consumer loyalty tools
  • instore comparison applications

The result is an enhanced user experience and a feeling of « closeness » that no traditional centralized site can generate.

Two examples

A Canadian network of 65 brokerages in two provinces asked multiplemedia to implement a geolocation solution. Not only do their main site and their mobile site now display the telephone number of the closest brokerage, but the content varies from one region and even from one city to another.

CAA-Quebec’s trip planner, a sophisticated website developed by multiplemedia, functions a little like Google maps, with the additional benefit that it allows the user to display maps and data from CAA-Quebec and from its parent organization, the well-known AAA (American Automobile Association).

The major advantage, for CAA-Quebec, is the possibility of introducing information about its numerous partners in the search results: recommended garages, restaurants, accommodation, CAA Quebec dollar partners and even tourist attractions.

CAA-Quebec’s trip planner is an excellent example of a mashup that offers true added value, in particular because of the reliability of the information, which carries the CAA-Quebec seal of quality.

E-mail + geolocation

Of all the digital communication forms – social media included – e-mail is still the one consumers prefer for promotional offers.

Since businesses increasingly collect clients’ street addresses, it is now possible to implement e-mail campaigns that include information about each recipient’s closest local outlet, as well as a map with directions.

Strangely, geolocalized e-mail campaigns are still few and far between in Quebec. In 2010, a multiplemedia Barometer showed that almost half of the companies (46%) did not personalize their campaigns at all; as for the rest of the companies, “personalizing”, in most cases (77%), simply meant including the recipient’s name.

So there is still a long way to go, even though very positive signs can also be seen.

Geolocation + social media

Not so long ago, Foursquare or Gowalla –applications that allow users to let their Facebook friends and Twitter followers where they are and collect freebies – were to be the next major trend.

However, research shows that this wave clearly lacks impetus:

  • Most Americans don’t know what a geolocation app is – and this more than probably holds true for Canadians and Quebeckers.
  • In 2012, only 6% of U.S. online adults used a geolocation app once a month or more, compared to 4% in 2011 (readwriteweb).

As Jeff Hasen, Twitter’s Chief marketing Officer aptly put it: “Despite the hype, the geo-location marketplaces that caused many a marketer to rethink social and mobile are hardly ‘crowd-pleasers.’ Currently, there are only 15 million users of Foursquare worldwide.  The ability to reach mere millions is less impressive if we consider there are well over 300 million mobile subscribers in the U.S. alone, and more than 6 billion mobile phone users worldwide (Mobile Groove)”.

Do you speak “glocal”?

A “glocal interface” could be described as a local interface that is geo-localized according to variables that are specific to another part of the world.

In 2011, Renato Cudicio, president of multiplemedia, managed a research project designed to compare the effectiveness of an excellent local interface created in India with a glocal interface created in Montreal.

As Renato Cudicio explains, “a glocal interface is characterized by the successful integration – in terms of efficiency, effectiveness and user satisfaction – of local cultural specificities within the various layers of a global Web application.”

Against all expectation, the usability tests performed in Bangalore showed that the local interface designed in Quebec was more effective than the website created in India by Indians for Indians.

This showed that solid expertise in creating geolocalized applications makes it possible to create an interface for a cultural group that is at the other end of the world. Needless to say, the perspectives are impressive.

To conclude

As is true for social media, we can see that geolocation is an excellent way of initiating and maintaining a conversation with the user.

The main challenge is similar to that presented by all other medias: just as in any conversation, the idea is to avoid overwhelming the recipient with information while being as relevant and interesting as possible.

Quite an art!

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