How cool would it be to walk into a hardware store and see advertisements and coupons for exactly the plumbing fixture we’re seeking?
Well, it could be cool. Sort of.
The technology for location-based marketing is here, and it isn’t all about Foursquare: Facebook’s Places and Google’s Latitude let you tell your friends where you are. Facebook has plans to let local businesses market to consumers who come into their establishments; one of Google’s most promising businesses at present is location-based advertising. As Google’s director of mobile advertising has been quoted, “Location will be one of the cornerstones of mobile advertising. Merging local businesses with mobile [advertising] is very, very important for us.”
Still, location-based marketing has as yet received only a lukewarm response from American consumers. According to one survey, “more than 60% of active smartphone users don’t use location-based services; among those non-users, 70% aren’t aware of the apps or don’t fully understand what they do.” The Pew Research Center has found that only 4% of adult Internet users use a location-based service like Foursquare. Globally, there’s more adoption: One survey found that “’nearly one-quarter of mobile users say they are getting comfortable with ads. Even better, more than one-third of consumers (38 percent) say mobile ads serve ‘an important purpose,’” with personalized content (including potentially location-based messaging) most appealing to consumers.
One big concern of American consumers seems to be privacy. In recent months, privacy issues have cast a shadow over the online world as a whole, including location-based services. Google was recently assessed a fine of 100,000 Euros for improperly collecting and keeping data as part of its Street View offering. A study by The Wall Street Journal recently showed that mobile apps were leaking large amounts of information without consumers’ knowledge. The courts are currently considering whether law enforcement agencies require warrants to obtain location-based records on individuals, and the question that has generated scary headlines in the media; as the Pittsburgh Post-Gazette recently informed readers, “Big Brother Has Access to Devices That Knows Where You Are.” All of this and more has led the Obama administration to call for a “Privacy Bill of Rights” covering online consumers, including provisions for location-based services.
It’s worth noting that not all Americans are equally concerned about privacy issues. Recent polling of Americans found that more feel they are losing control over their data, yet only a portion of the population feels concerned about that. A little over a third said they “cared less about privacy than five years ago,” and about the same said they care more. Participation in social media explains this divergence: “Among active social network users, 58 percent said privacy was less important and only 14 percent said its importance was growing. Non-social media users were almost a mirror image in reverse, with 53 percent saying privacy is more important to them, but only 20 percent saying it was less so.”
As an editorialist in the Denver Post has written, “Location-based services will grow in popularity as people become more comfortable with them. We hope users will be savvy about something as sensitive as one’s physical location, just as they ought to be with other personal information.” We should add that companies and firms are well advised to think carefully about the privacy implications of their marketing tactics, both as a matter of principle and to obtain the best result.
Lines between the marketing disciplines have eroded more than ever before, and public relations firms are finding themselves on the forefront of technology. Increasingly, we are gaining access to consumer data, a development that allows us to fine-tune our messaging better and offer more consumer value. But what about consumer comfort and trust with the brands? Just because we have technological capability doesn’t mean we should use it in a haphazard manner. In our position as leaders in technology, we need to think through vexing privacy issues right now, proactively, before public policy imperatives are forced onto us by a nervous populace.
It’s not just consumers that must be ready for location-based marketing. We need to be, too.