Profile: Jeremy Gilley

The man marketing world peace

Mapping out the high street

Consumers are increasingly happy to receive marketing messages via their mobile phones, as long as they offer something of specific, targeted value. Location-based marketing is a great way for brands to do just that

xmen

The first stage of the web was about ‘what’, and the second stage was about ‘who’. We believe the third stage will be all about ‘where’.”

This is the view of Diana LaGattuta, marketing director of Nokia’s Location & Commerce business unit, which powers location-based marketing for brands.

There’s plenty of evidence emerging to back her up. Google figures show 40% of searches already have a local intent, and mobile search is growing dramatically. Morgan Stanley predicts the number of searches done on phones will overtake those done on desktop PCs by next year.

The retail sector is on the frontline of these changes, for a number of reasons. The high street needs to respond to changing behaviour that is seeing customers researching purchases while they’re in store, comparing prices between onand offline outlets. It’s also an opportunity to add location-based information to existing demographic data, allowing for much better targeting. And location gives retailers a way to link their onand offline messaging.

Figures suggest there is much enthusiasm for location-based services, with 19% of mobile users worldwide already using them, mainly via maps. That amounts to 15.2 million people in the UK, according to ComScore.

Mobile is waking up retailers uo the crossover of online and offline

More importantly for marketers, O2 Media figures suggest seven out of 10 smartphone users are positive about receiving location-based messaging. This is backed up by research from location-based marketing specialists JiWire last year, which discovered that 69% of UK users would be happy to share their location to receive relevant content.

Before mobile comes into the picture, the first step for many retailers in adding a location element to their marketing is through desktop search. Vodafone has been working with the search team at media agency Carat for two years to work out the value of localising desktop search in driving traffic to stores. The first step was to stop search advertising in some areas while pushing it much harder in others, in order to discover whether there was an upturn in footfall and sales in the areas with the increased search spend. There was.

The follow up saw tests performed with high-level generic search terms, and proved that online spend drove more than just online sales. As a result, Vodafone built search campaigns around individual stores, and upgraded the store finder on its website. The key lesson for the phone company was the need to see the whole picture, not just assume online advertising had to be fulfilled online.

Nokia

Nokia used near-field-communications to promote its N9 handsets at Vox Cinemas in the Middle East

This is echoed by US analyst Greg Sterling. “For a very long time, customers have done their research online, then gone into stores to buy things,” he says. “That’s never been adequately mirrored by advertising. Marketers either target onor offline shoppers because of the difficulty of matching onand offline behaviours. Mobile is waking retailers up to the crossover of online and offline.”

Search plays a big part here too, driven by the fact that almost three-quarters of smartphone users use the internet while they’re in a shop. This is known as ‘showrooming’ - comparing prices, delivery times and so on across a number of retailers while in-store.

Showrooming is both a challenge and an opportunity for retailers. An opportunity because when people are conducting those searches, they’re looking for alternative places to buy; a challenge because the high street is becoming as fluid a shopping environment as the internet, where your competitors are only a click away.

Or maybe not all of them. Despite this rapid change in customer behaviour, Google figures suggest that 59% of advertisers don’t have a mobile-optimised search presence.

If search works because people are looking for help with a decision, mobile display is also being used to drive in-store traffic. Sandwich chain Subway’s first experiment at increasing footfall involved mobile banners promoting the chain’s value proposition - the £3 lunch.

“We knew lots of people used the store locator on our website, and that a lot were using mobile search,” says Subway marketing manager Simon Wallwork. “We needed to build one-to-one relationships, to change their minds when they were out and about.”

Subway’s first step was to build a mobile site; its second was a mobile banner campaign to drive people either to that site, or into stores. “We used mobile display to promote the value proposition, and we also had a button so users could click through to the mobile site store finder,” says Wallwork.

Starbucks also used mobile banners in its 2011 New Media Age Effectiveness Awards Grand Prix-winning campaign. Part of the activity aimed to promote Starbuck’s filter coffee. Agency OMD came up with an expandable banner that featured a link to Google Maps to show the nearest Starbucks locations.

Maps are a mobile medium perfectly suited to location-based marketing. Nokia’s Location & Commerce unit provides maps not only for its parent company’s handsets, but also the likes of Bing, Yahoo! and satnav company Garmin. Brands can then appear on the map, and Nokia “provides the tools so you can make your listing more visible against your competitors,” according to LaGattuta.

Cafe Rouge

Cafe Rouge Express: QR codes by tills collect data from customers scanning them in exchange for loyalty points

“There are two ways to reach customers via ads in maps - sponsored search listings and display ads within a map,” she says. “One of the first campaigns we ran was for McDonald’s in Helsinki, where 39% of people clicked through to find a route to a restaurant location, and we’ve seen that repeated.”

Increasingly, the key tools that are linking offline and online via mobile are vouchers and coupons. This might not seem news to anyone who’s followed the progress of mobile over the years. After all, using SMS to deliver offers to nearby phones was suggested when the mobile internet was in its infancy, and subsequent technologies like Bluetooth were heralded as ways to promote offers and drive mobile users in-store.

The difference now, according to Jon Mew, director of mobile and operations at the IAB, is that people are choosing to receive marketers’ communications.

“The example used in the early days of mobile was sending people Starbucks vouchers on their phones,” Mew says. “But you couldn’t do it because you’d annoy people. Now they are opting in.”

The IAB’s Mobile Working Group has published a white paper, Location-Based Advertising, as a guide to approaches being used. It identifies three: location-based banner advertising, location-based messaging and location-based apps.

Location-based banners are more sophisticated versions of existing mobile banners, served to smartphone users in a chosen geographical location. There are concerns, however, that geo-targeting of ads can reduce reach too much for most advertisers’ comfort. Indeed, the IAB white paper warns against targeting only customers walking past your store. It recommends blending store targeting with a more general lifestyle-based targeting to get higher campaign delivery.

Location-based messaging is usually done through an opt-in database compiled by a mobile network operator from its customers.

Subway too has been experimenting with location-based messaging. “We sent O2 More customers walking within a quarter of a mile of a Subway store an SMS with an image showing an offer,” says Wallwork. “We had different offers for different times of the day, with QR for trackability. People went into the stores, redeemed the offer and scanned the QR code, so we could track redemptions.

“We had great recall of the messages and a high percentage of redemptions, but we also saw 40% of people sharing the offers with friends. We decided not to make the offers one use only, because we thought the more the merrier.”

Wallwork’s only worry with the campaign was making sure all the stores were set up to process the offer. “The pre-campaign testing was a bit of a headache,” he says. “But it was all sorted out by the time it started.”

A similar caution is voiced by Michelle Farrell, new media and marketing assistant at pub chain JD Wetherspoon, over its Wetherspoon Unlocked promotion. This also involved redeeming mobile vouchers in venues more used to paper.

“We did a lot of briefings to make sure the promotion was understood at all levels,” she says. “We made videos to make it all clear.”

Subway

Subway used mobile banner ads to drive people to stores and promote its £3 lunch deal

The newest method of geo-targeting is via apps, which can be run by third parties or brands themselves. Third-party voucher apps, such as Foursquare or Groupon, have attracted a lot of attention recently, but branded apps are less well-known. They have the advantage of being able to collect data about the user and can work as loyalty cards, a feature proving popular with marketers. Restaurant chain operator Tragus recently launched an app to promote its outlet at London’s Euston station under its Café Rouge Express brand.

“I wanted to test the potential for a location-based app to drive customer loyalty,” says Tragus marketing director Jemima Bird. “We were impressed with the detail available from location-based analytics and we plan to use that location data to target messages more effectively and increase customer loyalty further.”

The app, developed by location-based marketing specialist Rippll, works by placing QR codes by the outlet’s till. Customers only get their loyalty stamp by scanning the code, allowing the brand to collect the data. The app also includes menu details and a GPS map.

Another restaurant brand experimenting with mobile apps and QR codes is Giraffe. The company wanted to promote new openings, especially for its Soho Bar and Grill, and also wanted to move away from paper vouchers.

Engage Digital created a mobile landing page for the brand that was promoted via posters carrying a QR code outside the venue before it opened. Passers-by could scan the code, which took them to a page to fill in their details and receive an on-screen voucher.

Juliette Joffe, co-founder of Giraffe, says: “We did two openings at the same time recently, one in north London and one in south London. We matched QR codes to deals and rotated what was on offer over a period of two weeks. The response in north London was mixed - people asked why were we doing it and said that not everyone has a smartphone. The south London response was fantastic, so it just shows how levels of usage differ.”

QR codes have yet to take off in the UK to the extent they have elsewhere, and some industry experts feel they may be superseded by other technologies. One that is starting to emerge is near-field communications (NFC), a technology based on short-range radio that powers Transport for London’s Oyster cards.

Only a few campaigns have used NFC, including a campaign for the launch of Nokia’s N9 handset at Vox Cinemas in the Middle East. The campaign used posters with NFC tags which people with NFC-enabled phones could tap to download vouchers for free cinema tickets. NFC technology is still not widespread in phones, but according to Proxama, the UK company behind the VoxCinemas implementation, 45 handset manufacturers are now building it into their smartand featurephones.

For brands that have experimented with location-based marketing, results have been encouraging. Now comes the need to understand how the approach fits with their other marketing activities.

“We see what we’ve done as testing the channel,” says Subway’s Wallwork. “We know mobile works, proximity works, SMS and MMS work. Now we need to see how we use them in business. The key is to integrate the app into a compelling loyalty and location offer.”

When thinking about that, brands will need to consider an insight from the US that redemption of vouchers is surprisingly time dependent.

“Most location-based marketing has been focused on ‘nearby’, so time is an interesting factor,” says Stirling. “If you’re trying to catch people near your store, you’re not going to get them to change their behaviour in the moment. It’s more about awareness so they come back the next day. Ultimately, retailers will use mobile as a loyalty tool; vouchering will still be present, but I don’t see it changing behaviour in the moment very often.”

Wetherspoon Unlocked

Wetherspoons

Wetherspoon Unlocked was a promotion developed by pub chain JD Wetherspoon with Bacardi Group to drive more footfall into its venues.

Jonathan Fearn, portfolio marketing manager at Bacardi Brown Forman Brands, explains that the target market was 18to 24-year-old students “out having a great time”.

“The challenge was that these consumers see the occasion first, then the venue. We needed a way to put our brands at the forefront and heart of the customers’ big night out.

“We knew mobile phones were an integral part of students’ social lives, and we knew the campaign had to be venue-led. Ogilvy came back with a mobile-based idea that really grabbed us.”

The agency’s idea was Wetherspoon Unlocked, an app that distributed offers and vouchers, and alerted people when near a participating pub.

“Wetherspoon is one of the biggest chains that operates pubs under the same brand, and it’s also a brand that resonates with students because of the value proposition,” says Fearn. “The app is a way of delivering mobile vouchers - and so closing the loop in venue choice. The offers weren’t just spirits based, but also included beer and food, because we recognise students have a repertoire of drinks, and a spirits-only approach could have damaged uptake of the app.”

Wetherspoon Unlocked launched for Freshers’ Week last autumn and, according to Fearn, has had between 15,000 and 16,000 users so far.

“Our assumption that all students are mobile-savvy wasn’t strictly true,” says Fearn. “We had ‘Campus Media’ people explaining how the app works face-to-face, then pointing students in the direction of the nearest Wetherspoons, or in some cases walking them there.”

Once in the pub, there were posters that showed three symbols, for offers on food, beer and spirits. Scanning the poster with your phone revealed that week’s offers and gave you the option to download a voucher.

“We wanted to give the feel of a secret society of students who were in on the promotion,” says Fearn.

The other element Bacardi and Wetherspoon wanted was a way of keeping students engaged with the app. This was Superanywheres, an augmented-reality implementation that allows students to tag video and images of their night out to objects in the pub. Their friends can then scan the object to see the content.

“It’s a way of making vouchers relevant at a specific point in time,” says Fearn. “But the real benefit for us is that it drives our share of spirit sales and our share of sales in venues.”

Ronan Shields

NMA explains: Location-based marketing

Ronan Shields

At last year’s Mobile World Congress, Sir Martin Sorrell identified location-based marketing as the “holy grail”. However, almost 18 months on, the industry is still cautious about spending more than test budgets on such activity. This inertia has been fuelled by a generic fear around public perceptions of targeting.

There has been a lack of leadership on the issue but the IAB is hiring its first mobile regulation specialist, who will establish suitable guidelines. Once brands are assured they can target consumers based on their location, within a legal framework, the brakes should gradually be lifted.

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