Balancing Profit and Privacy When Using Proximity Marketing

Peter Roesler, President - Web Marketing Pros

By Peter Roesler

President, Web Marketing Pros

internet-marketingThe internet and smartphones has led to the creation of a lot of technology that is helpful for marketers and business owners. However, it’s important to remember that technology is often a few steps ahead of the comfort level of consumers. Marketers should keep this in mind when creating advertising and marketing campaigns that use technology that people may not be familiar with and may find intrusive.

A current example of this can be seen with proximity marketing, where advertising networks make it possible to serve content to consumers when they are a near a certain location. Proximity marketing offers a lot of unique opportunities for business owners, but it’s important to balance the customer’s need for privacy with the business’s need for effective and profitable advertising.

In the past couple of years, several advertising networks have begun offering location-based ads. Most recently, Facebook began rolling out location-based ads for marketers than can target users by demographics whether regardless of the device they use to run Facebook. And Google recently added new features to help marketers track how AdWords affect in-store sales.

There is a lot of indication that proximity marketing use will grow tremendously during 2015. A study of advertiser and marketers in the U.K. found that more than three-quarters (79%) of them are planning to invest in proximity marketing solutions within the next six months. It’s very likely that American marketers are planning to invest in proximity marketing at comparable rates.

However, a study from PricewaterhouseCooper suggests caution is necessary when creating a proximity marketing campaign. A survey of 1,000 consumers found that only about one in three said they were happy/comfortable with retailers using their mobile phone for location targeting. This shouldn’t scare marketers away from using proximity marketing. Remember, if you were to ask people, most would report that they didn’t like getting ads on the mobile device or on social media channels. They still respond to the ads when they see them if they are relevant and enticing.

If people aren’t automatically happy about location-based targeting, marketers can compensate by including the things they do like in the ads. The study included some information on what people did like that marketers can use when planning proximity ads. For example, 76 percent say they browse in-store because they ‘want to see/touch’ the item before buying online and 65 percent say they browse online but purchase in-store because they don’t want to pay shipping costs. A clever way to combine these facts for a proximity ad is to keep popular items that people want to try in stock and have them at a price that is lower than the price they would pay with shipping from an online retailer.

One thing marketers should avoid doing is drawing attention to the fact that they’re using location-based marketing. An ad that says “We know you’re nearby”, overtly or subtly, can be off-putting to the customer. It’s best to let the product or the offer take the focus of the ad. Letting them know that they’re nearby the location is secondary, because that only matters if they’re moved by the offer in the ad.

Another thing marketers can use to create interest in their nearby location, is information on price comparison. More than half (52%) of the PricewaterhouseCooper survey respondents said they chose to buy online because prices/deals were better. And 47% said they could shop at all hours online, which they couldn’t do in-store. Marketers can use this info to make better proximity ads too. Letting consumers know that a certain sale price is lower than the competition can get people to buy from a nearby store rather than go back online to comparison shop. The study reported that 45 percent of consumers like to be able to check competitor prices, availability from mobile devices.

Proximity marketing is a great tool for businesses that want to use the internet and mobile marketing to boost foot traffic and sales to their business. However, like all marketing tactics, it’s important to use these tools wisely to boost profitability without making people feel that their privacy was intruded. By focusing location-based ads on the things customers like, rather than on tactics they aren’t comfortable with, marketers can use proximity based ads effectively.

Read this article to see how marketers may be able to use personalization to enhance their marketing with some consumers.

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