Find out why the key ingredient in geomarketing campaigns that show ROIs by converting consumer interest into intent to purchase is location data.
Frustration with Facebook and Google’s online advertising “duopoly ” which accounted for 63% of all U.S. digital ad revenue in 2017 is leading digital marketers to search for alternative ad-tech solutions. What firms agencies and departments are looking for is an agnostic platform that can process different types of location data and especially mobile data in order to design deploy and determine performance of geomarketing campaigns.
Today geomarketing innovations are accelerating with the help of Location Intelligence. While consumer interest can be inferred with historical data on sales or searches Location Intelligence adds the geospatial context needed to move conversions from interested to intend to purchase. In 2017 Forrester found mobile location data helped digital marketers increase conversion rates by 60% and improve the ROI of campaigns by 68%.
The post below highlights two ways of using location data for customer segmentation. Previous posts have examined this topic but here the focus will be on creating segments based on where customers originate when visiting a specific store or traveling to another country. Historical location data on past trips whether local or global is a rich source from which inferences can be drawn for building customer segments.
Location audience segments
While 90% of retailers can determine when customers are browsing their websites only 68% know when customers are browsing in brick-and-mortar store locations. And that number drops even further when it comes to the amount of retailers capable of attributing in store visits to online advertising.
Location audience segmentation offers a way to close this omni-channel loop while enabling retailers to attribute in store visits to online campaigns. Powerful new solutions like Vodafone Analytics can help build location audience segments by bringing together Location Intelligence and mobile data to study past customer visits to a specific store location or other point of interest.
In understanding historical mobility patterns for individual catchment areas postal codes or even regional markets retailers are able to answer two questions:
- Where should geomarketing campaigns be focused to reach high-value segments?
- Where should new locations be considered to meet the demand of underserved segments?
The animation below displays visitor counts across the store network of a Barcelona retailer in October 2017.
All 51 store locations are presented alongside an overview on network mobility patterns. When store location 3693 is selected the view dynamically updates to display site-specific visitor details that can be further filtered by place of origins (home or work) day of week and even hour of the day. The demographic details in the panel on the left-hand side allow location audience segments to be discerned based on movement trends near our selected store. For store 3693 it appears that women 35 to 44 years old traveling from home on weekday evenings form a location audience segment that may be a potential customer to target in future marketing campaigns.
Vodafone Analytics provides the resources for estimating average daily origin-destination trips using anonymized and aggregated mobile data from Vodafone. CARTO then adds geospatial context to this mobile data to extract activity patterns from user pings. Since pings represent device usage Vodafone Analytics infers visitor place of origin from ping frequency by day of the week and hour of the day.
In geomarketing customer place of origin is a rich indicator from which other attributes can be inferred and then supported with additional demographic geographic and economic location data streams.
Check out our recent webinar with tips and best practices on executing geomarketing campaigns using location data Watch Today!
Behavioral audience segments
Whereas customer segments identify who to target based on demographic attributes behavioral customer segments identify audiences to target based on what they actually do. The tourism industry relies heavily on behavioral customer segmentation to perform a wide range of operations including booking reservations scheduling staff and personalizing amenities based on the type of guest.
As the seventh largest export industry estimated to be worth £127 billion tourism is a significant economic growth engine in Britain. VisitBritain the national tourism agency is in charge of developing international marketing campaigns that increase the volume and value of inbound visits. As such VisitBritain must:
- Determine where high value market are located around the world
- Allocate budgetary resources to countries of origin where traveler spend the most
The map below displays business travelers visiting the U.K. in the second quarter of 2017 using data from the International Passenger Survey (IPS).
More than 727 000 business travelers visited the U.K. spending a combined total of £388.44 million. In each of the 57 countries of origin there is a purple hexagon whose size is proportional to that country’s number of travelers and whose position is based on the geometric centroid of that country’s airports. In other words it’s not that all U.S. travelers to the U.K. departed from Montana but rather that Montana was where the centroid of all U.S. travelers was located.
Although further analysis would be needed to determine where in each country to target ads to reach high-value travelers this model reveals some telling insights on where VisitBritain should focus its international marketing efforts.
- While Germany was the country of origin with the most travelers (116 000) fewer U.S. travelers (70 200) spent more money (£70 million) than compared to German business travelers (£45.41 million)
- Although only 1 470 Singapore business travelers visited the U.K. they spent £4.2 million which on average suggests each traveler spent about £2 857
- More women travelers departed from Germany (30 400) than Switzerland (16 500) but when the two countries of origin are compared by average spend per traveler Switzerland comes out ahead with business women travelers spending on average £489 compared to German women who spent £364
- Canada was the country of origin with the highest average traveler spend for women business travelers which totaled about £1 163
Whereas ad spending should focus on behavioral customer segments in Singapore (all business travelers) and Canada (women business travelers) VisitBritain may want to scale back ad spending in Germany as there are more profitable markets to consider.
The changes ahead in geomarketing
A recent report from BIA/Kelsey predicts location based advertising on mobile devices will skyrocket with U.S. ad spend exceeding $38.7 billion by 2022. This rapid rate of change is likely to present obstacles and opportunities but marketing and advertising firms can stay ahead of the curve using Location Intelligence solutions for geomarketing campaigns today.