Location-Based Marketing: Complete Guide for Advertisers

by Frankie Karrer

7 Min Read

Before the digital marketing revolution of the past few decades, advertisers had to cast a wide net and hope that they were lucky enough to get their content in front of the right audiences. That problem is a thing of the past now. Digital technology has made it possible to be more precise about reaching consumers. One new strategy is location-based marketing, which allows advertisers to filter audiences by geography.

What Is Location-Based Marketing?

Location-based marketing is a strategy that tailors marketing messages based on a potential customer’s geographical information, ensuring that the content is relevant and timely. It’s a powerful means of connecting with consumers by using their location to influence the marketing content they receive.

Types of Location-Based Marketing

Location-based marketing can be lumped into two broad categories:

Geofencing

Geofencing creates a virtual boundary around a specific location — like a one-mile radius geofence around a coffee shop, for instance. When customers enter the range of the geofence, they’ll receive a push notification reminding them to stop in for a delicious cup of joe. Customers outside of the geofence will not receive any targeted ads.

Geotargeting

Geotargeting delivers content or advertisements to a user based on their geographic location. These locations can be as broad as a city or as precise as a ZIP code. For example, let’s say that you are opening up a second store. You can run geotargeted CTV ads or OTT ads to individuals in the store’s ZIP code to generate leads and earn customers.

Learn more about geofencing vs. geotargeting.

How Does Location-Based Marketing Work?

Location-based marketing relies on users’ GPS, Wi-Fi, cellular signals, and IP addresses to determine their current locations. That information, in turn, allows marketers to trigger ads or content specific to the user’s geographical area, making the message more relevant and engaging.

There are a few different ways to go about location-based advertising. When reaching users through their mobile devices, for instance, you’ll need them to opt-in to allow you access to their location data.

For example, Starbucks targets users who have downloaded their mobile app and chosen to share their location data. If a user is near a Starbucks store, the app may send them a push notification offering a discount on their favorite beverage.

You can also target users via their static location. For example, Connected TV advertising is a practice that allows you to target users in specific ZIP codes or radiuses using location data derived from their Wi-Fi routers.

That approach proves particularly effective, as streaming service applications require subscribers to opt-in to location tracking to use the platforms. In other words, a user’s location data is made available simply by their using the service.

Benefits of Location-Based Marketing

According to a report by Factual, nearly 90% of marketers say using location-based marketing resulted in higher sales. Additionally, 86% report growth in their customer bases, and 84% report higher customer engagement.

Some other benefits you can unlock through location-based advertising include the following:

Enhanced Targeting Precision

Using geographical data to target consumers allows you to get your content in front of the right people at the ideal point in their purchasing journeys. For instance, if you sell beachwear, you could target communities that live within 25 miles of a public beach when summer is approaching to boost your seasonal sales.

Increased Relevance

Your business can ensure your marketing messages are highly relevant to your audience by selecting consumers based on where they are. For example, if you operate a regional business, you could target consumers within your service area and avoid advertising in areas beyond your reach.

Improved Customer Engagement

Location-based marketing fosters a deeper connection with consumers by providing them with content that reflects their real-world surroundings, the end result of which is a more engaging and memorable interaction with your brand.

Higher Conversion Rates

Relevant, location-specific offers are more likely to resonate with consumers, leading to a higher conversion rate.

Valuable Customer Insights

Location-based advertising offers valuable insights into consumer behavior, preferences, and purchasing patterns. You can track your performance within specific regions and get a better understanding of how location-based content influences consumer purchasing habits.

Examples of Location-Based Advertising

Location-based marketing spans various forms, and the specific types of location-based advertising that you use will vary based on the size and scope of your business. With that in mind, some of the most common strategies include the following:

Geotargeted Mobile Ads

These ads tap into users’ location data to provide timely advertisements. For example, a regional fast-food chain may deploy mobile ads to reach hungry users within a five-mile radius of their locations. When users in that target area search for “fast food near me,” the restaurant’s ad will appear at the top of their search results — perhaps offering a special discount if they visit within the next hour.

Geofencing for Retail Offers

Department stores frequently use geofencing that surrounds the immediate shopping district and its premises. When potential customers who have the store’s app installed enter the area with their smartphones, they’ll receive push notifications about exclusive in-store promotions — encouraging impulse visits and overall increased foot traffic.

Beacon Marketing in Stores

Beacon marketing is a form of in-store, location-based marketing through which a retailer installs beacons throughout their store. These beacons detect when a customer with the store’s app approaches a particular section, like the jeans display in a clothing store. The customer then receives a personalized notification about a special offer on the jeans that are on display.

Location-Based Push Notifications

Location-based push notifications typically require that the recipient download an app and allow it to collect and use their location data. If a concert venue is running a last-minute ticket sale for an event happening next weekend, for instance, it could send push notifications to app users within a ten-mile radius.

Social media campaigns make frequent use of location data to target specific segments of users. For example, a new restaurant could launch a location-based social media campaign targeting users within their city; when users scroll through their Instagram feed, they’ll see sponsored posts from the restaurant featuring popular dishes, along with a call-to-action to book a table.

Geotargeted Connected TV Ads

CTV ads use Wi-Fi-based location data to target users while they are streaming their favorite TV programs within the comfort of their homes.

Imagine, for example, that a local car dealership wants to generate more business. It could run geotargeted ads on CTV platforms like MNTN to target households within a 30-mile radius. Residents in the targeted area see high-quality TV ads for the dealership’s latest sales event.

Best Practices for Location-Based Marketing

Location-based marketing is one of the most powerful ways to target users with timely, relevant content. But before you start tapping into consumers’ geographical data, you need to consider a few established best practices:

Respect User Privacy

Always be respectful of user content and privacy. Ensure that your location-based marketing strategies comply with legal standards and allow people to opt in or out of having their location data used.

Personalize Content and Offers

According to McKinsey & Company, 71% of consumers expect brands to deliver personalized content. Of these respondents, 76% get frustrated when companies fail to offer personalized ads and recommendations. As such, the more tailored your message is, the better.

Optimize Timing

Timing is crucial, and that means you must align your marketing messages with the habits of your target audience — especially when using advertising mediums like CTV. If your consumer base primarily includes night owls who consume content late into the evening, you may want to target ad slots beyond primetime.

Provide Value

Don’t just push your products or services; ensure that every piece of location-based content offers value. Inform your audience, and when possible make them laugh!

Monitor and Analyze Performance

Regularly track and analyze the performance of your location-based marketing campaigns. Over time, you’ll get a feel for what works and what doesn’t.

Reach Local Audiences With Performance TV

MNTN Performance TV gives marketers the power to reach local audiences in ways beyond the capabilities of traditional TV advertising. With MNTN, you can secure premium ad slots on top-performing streaming services and make use of precision CTV targeting tools, such as radius targeting and ZIP-code-level geotargeting — enabling you to reach specific consumer segments.

Tracking your performance marketing campaigns is also made particularly easy when working with MNTN. Our platform has built-in analytics and reporting tools designed to help you get more out of every ad, like Verified Visits™, a proprietary technology that helps attribute conversions to specific ad campaigns. With MNTN, you won’t have to guess which ads are delivering results — you can know with absolute certainty.

Location-Based Advertising: Final Thoughts

As location-based marketing continues to evolve, tools like MNTN Performance TV are setting new standards for precision and effectiveness. By leveraging the targeting capabilities of CTV and other mediums, you can ensure that your marketing messages are not only seen but resonate deeply with your intended audience.