I've been writing about the "Future" of mobile advertising, following a speech I gave at last week's MMF in Berlin. Today - location.
I've written here recently about The Mirage of Location suggesting that the technology problem has largely been cracked, especially for devices like the iPhone. Already today, we can run campaigns where say, a new film release is advertised and people can touch a banner to see the preview. Then they can find their nearest cinema and actually book tickets over the mobile web or with a click-to-call.
However, advertisers and agencies have been pretty slow to adopt these ideas, despite saying that they want them in principle. Advertising as an industry tends to be fairly slow in adopting new ideas, especially where technology is concerned and/or when the commercial benefits of implementation aren't very clear. It will happen, of course, it'll just take time.
The other major opportunity around location is couponing via mobile - the idea of sending people a coupon that can be carried around on their mobile gets many marketers (especially in FMCG) positively palpitating with excitement. This does have significant technology barriers to overcome if an automated redemption system is required - and it needs to be automated if it's going to scale. The vision of endless queues in Tesco on a Saturday as people struggle to find their coupon in their mobile is enough to get most retailers reaching for double doses of Valium.
Having said that, small scale testing is available today, with various opportunities in both the UK and Germany. Uptake by marketers has been slow to date, but it's only a matter of time before this happens - it's too perfect not to. Then the canny marketers who tried small tests will be a few steps ahead in a game worth potentially billions of pounds.
The final consideration about location based marketing are the mind numbing logistics involved, which will slow down progress significantly in certain sectors. Sure, a find-my-nearest is a pretty simple technique to implement and I'm sure we'll be seeing this as a standard element in mobile marketing's armoury. However, many argue that the real potential lies in other sectors, which have the possibility of benefiting from sophisticated yield management to boost profits. In other words, if a business operates with perishable inventory (like a cinema or restaurant), being able to sell a discounted ticket or meal which would otherwise go unsold, means that the sale price effectively goes straight to the bottom line.
Managing this process is pretty easy if you have only one or two sites to worry about. As an example, if you're in charge of Wembley Arena, it's easy to understand that you have say, 150 tickets to sell before the gig opens in one hour. Provided you can tell people close enough to get there in time, you can easily construct and communicate a discount offer and maximise your revenues.
On the other hand, if you're in charge of McDonalds and have 1250 outlets to worry about, how do you know which ones need to be promoted at any one particular time and those that already have queues spilling out into the High Street? Certainly, no such system exists today, either in terms of technology or management skill sets, and until these issues are solved it'll hinder yield management efforts for multiple retail outlets. Until then, this aspect of location based marketing remains little more than an intriguing promise of a profitable future.
But that's the PhD level of location based marketing - there's a lot we can do already today, albeit on a simpler and more practical level. And since it's going to happen, the wise marketer will already be running tests to ensure sustainable competitive advantage in the future.
