THE NEWSROOM

TechWatch: Location Based Advertising

Harpreet Rooprai
Sub Editor
GIS Development
harpreet.rooprai@gisdevelopment.net

One common thing that drives almost every industry is marketing and advertising. Figures show a healthy growth chart of the advertising industry in recent years, particularly the last decade. Advertising veterans are pushing themselves hard to catch the attention of their audiences and potential buyers. Courtesy enticing concepts like interactive advertising and sweepstakes, channelised through Internet and mobile, some people are actually spending more time with advertisements than with the real content. On the downside, cutting edge competition among the marketers has triggered the information explosion phenomenon for the ultimate consumer. A concept that would filter the relevant information is no less than a blessing. As marketing geniuses realise that advertisements have to be relevant, timely, valuable and requested, industry experiments with Location Based Advertising.

Location Based Advertising or LBA is advertising that are matched to the physical location of the targeted audiences. Location Based Advertising deals with strategically placing message near where buyer behavior can be most immediately influenced, and converted into a sale. The location-specific advertising allows advertisers the ability to highlight product promotions near their stores or drive sales of slow moving products in a particular area. Imagine yourself passing by a departmental store and getting discount coupons or being informed about a fabulous promotion scheme on in there, on your mobile phone. The technology could help spread the word among passerby about sweepstakes or a chance to win lucrative prizes, nowadays one of the hottest marketing gimmick.

Local advertisements account for a considerable chunk of the whole advertising industry. People are always more interested in knowing what is available right now, in their nearest vicinity and LBA delivers just that information. Add to it the portability of mobile phones, one of the most likely targeted next-generation marketing medium. As reported by MobileIn.com in 'Mobile advertising and marketing: Market analysis and forecasts 2006-2011', from 2005 when the budding market garnered USD 255 million in Europe and the United States, mobile marketing and advertising in these two geographical areas is likely to grow to exceed USD 1 billion in 2009. The likely possibility that, apart from mobile phones, other gadgets like GPS enabled gaming consoles, or may be iPods in future, will add another wrinkle to the Location Based Advertising cannot be ruled out.

Broadly categorizing, Location Based Advertising can be classified into push and pull approach. Push scenario accounts for the useful information provided to the consumers without him actually asking for it. For instance, mobile coupons or information provided on high resolution screen in public transport, where commuters can receive messages and value added information like timetables, delays, city activities, opening hours of museums, special events etc. during their ride.

Pull services accounts for providing relevant information when the consumer requests for it. The end user will receive the information if he is interested to receive or looks for specific information. For instance, if a user is looking for an Italian restaurant in the vicinity, he will get the list of Italian eateries nearest to his current location, on his mobile device. When he selects one of them a map is provided as well as an offer of a free appetizer.

Location Based Advertising is showing many new promotional opportunities by exploiting location information to the hilt. Not only LBA offers the user convenience of reaching in an unknown city and getting all the required information about his trusted brands, ATM's, restaurants, gas stations, but also it provide sponsors a tool to direct potential customers to the doors.

In January 2004 European Commission successfully completed ELBA or European Location Based Advertising project launched with the aim of developing and validating an innovative approach, including content aggregation and technology integration, for Location Based Advertising.

In the scope of the ELBA project, three different scenarios were planned and implemented. Scenario one being high resolution screen in public transport, scenario two, LBA on mobile devices and scenario three, context sensitive advertising in warehouses.

Scenario 1: High resolution screen in public transport

Owing to the fact that journey in a train or a bus is usually a monotonous experience, the thought of utilising this time for the presentation of commercial messages aroused. The concept was not new as in the past advertising and marketing in public transport had been realised in many ways including printed advertisements being placed inside the vehicle, acoustic announcements and animated video messages. The innovation introduced was combining the location factor with these techniques. The consumer received only advertisements that refer to stores or restaurants in the close proximity from position of the train or bus. The technique gave the interested customer the possibility to leave the public transport and to visit the advertised establishment at the next stop.

Scenario 2: LBA on mobile devices

Location Based Advertising on mobile devices is basically a pull-service, that means, the information would be provided only if the end user is interested to receive advertised information or looks for specific information. For example en route in the city, the user seeks the closest drugstore or petrol station. The user gives the service provider the indication that he is looking for a special service and receives the desired information either out of a classified directory or according to the special offers available, if any, on the requested information in the concerned area.

Opt-in possibilities allowed device users strolling in a shopping mall or urban area to signal their readiness for local offers. Carriers or content providers could offer lower subscription rates for those who accept advertisements. Users willing to accept advertisements on their mobile devices received either push information i.e. they get a advertising message with savings offerings or pull information i.e. users requested information like classified directories etc.

Scenario 3: Context sensitive advertising in warehouses

Another method was based on the exploitation of the Bluetooth capabilities, that allowed the flexibility to apply positioning technology on a micro-level, like in a shopping mall, warehouses or supemarkets. Users in a mall received according to their current position special offers on goods in the area they are at that moment. Bluetooth networks were created whenever two devices come within a 10 meter range. The method allowed flexibility of devices need not being in line-of-sight. Up to eight devices were supported by one Personal Area Network. By overlapping networks, up to 80 items could be linked.

The context sensitive advertising creates a seamless link between customers and retailers. Customers have a personal identification system on their device, allowing retailers administrative access to their shopping preferences, to interact and serve them better. While passing a storefront, shoppers can see an interactive displaying motion video and static content advertisements custom-tailored to their interests and mobile device.

The project helped identify the exploitable opportunities and threats to watch out for. LBA showed potential, its strengths being its targeted, interactive and no stray nature. Handsets being a very personal medium, allows permitted advertising. The threats and weaknesses included ad spams and uncertainty caused by not having the proof of effectiveness, raising questions like will it really become a market?

In August 2006, UK based firm Viacom Outdoor added GPS technology to its fleet of buses carrying digital LED advertising panels in London and launched its first LBA project with Yell.com. The GPS advertising system was a part of five-month campaign to raise awareness of Yell.com's local search facility. The initiative allowed digital bus panels to automatically change its advertising message to match its location across the London city. The technology allowed Yell.com to advertise specific services situated in specific locations, for instance “Find gyms in Marble Arch”.

More recently in June 2007, another UK based company ZXV Ltd launched Mappam, a location based advertising service, that makes it easy for the advertisers to put ads on the map. Advertisers can visit mappam.com and place advertisement, upload an icon to represent his ad and chose the price-per-click. He pays only when Mappam redirects someone to his site. The host can add Mappam advertisement to his site with one line of Javascript. Mappam ads appear as small 16×16 pixel icons on map, taking up far less space than traditional banner ads and providing information that is relevant the context of the map visitors are looking at.

Reinforcing the fact that LBA is here, New York based firm Innovation Fund LLC has patents issued in the field of Location Based Advertising and has been developing proposals to go to the leaders in the field, which include Microsoft, Google, and Time Warner, as well as the telecom companies.

It is hard to predict the exact shape of future marketing or how next generation advertisements will look like and on which gadget they'll work best. A smart marketer knows that today it takes more than just a clever idea to get consumers' attention. Increasingly, they want to get something in return for their time. Will marketers hit the nail with LBA? Does LBA offers a win-win proposition for the advertisers as well as the consumers? The concept is in initial stages to give a final word on that. But promising, it surely looks.