Geo-marketing to mobile users is on the map

Shehara Kannangara, Sean Archer-Smith and Hollie Azzopardi at Wagamama at Sydney’s Darling Harbour. The chain is leading the geo charge, with special deals for customers who ‘check in’. Picture: Simon Bullard
Source: The Australian

A SIGNIFICANT deal was announced recently in New York that is destined to have a major impact on a marketing platform still in a nascent form on our shores — geo-marketing.

It’s a form of marketing that saw thousands of US consumers flood into Gap stores in search of 10,000 jeans vouchers within hours last year, and in Sydney propelled the ordinary vending machine to front of mind with the Coke Machine Fairy promotion.

A fortnight ago, location-based social networking service Foursquare, which like Facebook Places allows users to “check in” to locations and venues, announced an alliance with a group of daily deal coupon businesses, including Living Social and Gilt Groupe.

While coupon sites such as Cudo, Groupon and Spreets have taken off like a rocket here, Australian marketers are only beginning to dabble in location-based marketing services.

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Research from Nielsen shows that last year, 41 per cent of Australian businesses participated in social media activities, but only one-fifth of those offered geo-targeted offers, promotions or content.

“Location-based social networking services have definitely caught the eye of marketers,” says Melanie Ingrey, research director of media at Nielsen.

“Their ability to target consumers with location-specific offers, as well as use reward-based promotional tactics to encourage consumers to their bricks and mortar presence in order to ‘check in’, is a feature with substantial opportunity to engage with today’s consumers.”

Location-based apps on a mobile phone allow users to announce their location by “checking in” to a restaurant, shop or even the airport — and to see if any of their friends are nearby. Now businesses are starting to entice customers with discounts and special deals. Food retailers appear to be leading the charge, using Foursquare to offer discounts and free meals to customers who “check in” at their restaurants. Nando’s, Grill’d and Wagamama are among the restaurant chains using Foursquare to offer customers geo-targeted deals, while Starwood Hotels Resorts is giving members of its Starwood Preferred Guest loyalty program additional points and rewards when they check in on Foursquare at its hotels, including the Westin in Sydney and Melbourne.

Wagamama offers a two-for-one meal deal to customers who check in on Foursquare at any of its restaurants around Australia, and marketing manager Jacqueline Majer says the Asian noodle chain will be ramping up its geo-marketing activity.

“We want to be at the forefront of these types of activities. It’s essential because our market is that young, social, professional audience and they are very savvy in the social media arena. It works well for us and our audience,” she says.

Shehara Kennangara, 23, a marketing assistant, checked into Wagamama using Foursquare, a service she took up after seeing her friends use it. “I wanted to see what it was all about. It’s a good way to get recommendations from friends on specials nearby.”

She says the discounts on offer can only improve.

“It would be better if more people are encouraged to use it because then we’ll get better deals.”

Coca-Cola was pleased with its two-week Foursquare promotion in Sydney last September. Users were alerted to special prizes — such as limited-edition trainers — in nearby vending machines.

“Foursquare’s geo-location media platform allowed us to create some excitement around something as simple as getting a Coke from a vending machine. It worked to bring vending machines to the front of people’s minds, visible within their handsets, (and) it created a memorable bond with many,” a Coca-Cola spokeswoman says. The Coke Machine Fairy scored close to 1 million impressions on Twitter and 1200 mentions in social media.

Galaxy Research found that 75 per cent of Australian mobile users were willing to receive geo-targeted offers. Petrol discounts, restaurant and grocery deals were the most appealing. “Geo-targeting makes the offer very relevant to the consumer — it’s timely, in your area and what you’re looking for,” says social marketing consultant Marie Sornin. “From an advertising point of view, you can achieve a higher conversion rate because it’s what users want.”

Facebook Places, which launched in Australia last September, looks set to become the most popular location-based social networking service, overtaking Foursquare, which has been here since November 2009. Other location-based apps include Brightkite, Gowalla, MyTown and Loopt.

Nielsen does not yet measure access via mobile devices and while Facebook boasts 10 million active users in Australia, the site’s local representatives would not reveal what percentage of users were checking in via Facebook Places.

According to Nielsen, some 6 per cent of Australians active in social networking have visited Foursquare.

“Geo-marketing has not taken off among marketers in Australia because the scale is not there yet. But that is likely to change with predictions that by 2013, over 50 per cent of internet access will be via mobile devices,” says Barrie Barton, strategy and insights director at digital publisher Right Angle Studio.

Domino’s Pizza in Britain attributed a 28.6 per cent increase in its online profit in 2010 to its Foursquare activity and here Domino’s will take advantage of its 100,000 Facebook fans by making geo-targeted offers via Facebook Deals when it launches later this year.

Sornin believes Facebook Deals will be a game changer.

Facebook Deals shows deals available at local retailers within the location of a user’s check-in.

“Geo-marketing makes perfect sense for retailers,” Sornin says.

“The mobile is the only device people carry at the point of sale,” Sornin says.

“They’re not watching TV or reading a magazine when they’re in-store.”

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