Location-Based Advertising: The MVP of Small Business Marketing
These days, you’ve got more than enough options when it comes to marketing your small business—maybe too many. With all these choices, it can be hard to decide where to put your advertising budget. However, when it comes to getting the most out of your ad dollars, one option is head and shoulders above the rest: location-based marketing.
What is location-based marketing?
Location-based marketing is a relatively new form of ad targeting. It allows an advertiser to choose a specific area in which to send targeted advertisements. This is called geofencing. When an internet user enters a geofenced area, they’ll receive an ad on one of several platforms. Ads won’t be delivered outside the geofenced area.
Advertisers can also set demographic filters, choosing to include only certain ages, genders, income levels, and others, while excluding any internet user that doesn’t fit the criteria.
Here’s an example.
Marie owns a day spa. She wants to send advertisements to potential clients who may be likely to use her spa. With traditional advertising, she’ll rely on volume—sending out mass advertisements via email, print publications, or in other forms.
But location-based digital marketing allows Marie to be more precise. She can geofence businesses that share a similar customer base as hers, such as gyms, high-end supermarkets, and yoga studios. Then, she can set demographic filters to match her ideal clientele. In this case, that may be middle-income women between 25-50 years old.
Once people matching that description enter one of these businesses, they may receive ads on their phones while they use social media, browse the web, or even while they play games.
Ads are delivered primarily to people who are likely to visit Marie’s spa and not to people who aren’t. The result is a more efficient and more effective use of her advertising dollars.
How can a small business benefit from location-based marketing?
Previously, most agencies who engaged in location-based marketing focused their attention on big, national brands. That may have caused some small business owners to believe that kind of marketing was out of their budget reach or that it simply wasn’t for them. But now, as the practice has developed, there are several companies that specialize in location-based marketing strategies for small businesses.
Here’s what small businesses have to gain from using location-based marketing.
You can attract new business—lots of it.
Getting new customers and clients in the door is what marketing is all about, right? That’s exactly where location-based marketing excels. According to Entrepreneur, location-based digital ads have been found to be more than 20 times more effective than generic banner advertisements.
Using the combination of location targeting and demographic filtering, you’ll only deliver ads to people when they’re relevant. That means they’ll be more likely to engage. Furthermore, when you geofence other businesses, you’ll be catching potential customers while they’re already in a shopping mindset. This works similar to how impulse items near the cash register do—people are more likely to buy when they’re already “in the mood.”
There are options for every budget.
Location-based marketing is an excellent practical choice for a small business with a limited marketing budget. You don’t need a huge investment to get started. And since you’re only sending ads to people who have a high probability of buying your product or service, you’re not wasting money on sending ads to people who have no chance of doing so. That means each dollar works harder for you.
You can learn about your customers and discover new ones.
As your location-based marketing campaign matures, you’ll get huge amounts of feedback about who is engaging with your business. That’s because you don’t just set demographic filters, you also collect tons of demographic information.
This can help you create stronger, more effective campaigns in the future. It could also help you discover new segments of customers you didn’t even realize were interested in your business. For example, after weeks of running a campaign, you might find that your ads are performing extremely well in an age or income group you hadn’t considered before.
You can become a star in your local market.
When you think of the most established businesses in your area, what do they have in common? If nothing else, it’s that they are well-known, beloved members of the community. That kind of brand recognition and brand affinity—when people have an emotional connection to a brand—is the most desirable result of a marketing campaign.
Many of these businesses achieved this by serving their communities over years or decades. But location-based marketing can help you get there sooner. By focusing your advertising efforts on your community, you can saturate the market with your presence. Repetition works. When you’ve got a smaller group of people to advertise to, you’re more likely to expose them to your ads multiple times.
This is especially true when you use video campaigns in your campaigns. Not only does video boast high engagement rates, but it also puts a face to your business. That can help create a more personal connection with your customer base and make you a recognizable star in your community.
Which channels can you use to deliver targeted advertisements?
There are several options when it comes to how you can deliver targeted advertisements. Because not everyone uses the same apps, websites, and games, the best campaigns use a multi-channel approach to deliver ads across as many platforms as possible.
Still the world’s most popular social media platform, Facebook is an incredibly popular channel for delivering targeted ads.
You don’t have to be ultra-specific. Facebook allows you to target users by city, state, or even country. But you can. Their advertising platform allows you to geofence down to a 1-mile radius. That’s not as specific as some, but the social media giant has other benefits that make it an attractive option.
One main advantage Facebook has over some of the other options is the sheer amount of data users hand over to the site. In addition to basic demographic information, Facebook users tell the site what their interests and hobbies are, what their favorite movies and music are, which social organizations they belong to, and more. This can be incredibly useful for advertisers who want to target people based on the things they care about in addition to their location and demographic information.
Another distinct advantage of Facebook advertising is the ability to conduct cross-platform campaigns easily. Facebook also owns Instagram, another one of the world’s most popular apps. When you create a Facebook campaign, you can also choose to send those ads to Instagram users without having to set up a new account or a new campaign.
YouTube
More than two billion people worldwide watch at least some video on YouTube each month. And more than 70% of those views come from people watching on their mobile phones. That means that it’s very likely that there are thousands of people in your community watching YouTube on their phones at any given minute, making it a reliable delivery platform for targeted online marketing for small businesses.
By its very nature, YouTube is interest-driven. People watch videos about things that interest them. That means marketers have the ability to deliver ads when they are extremely relevant. For example, a yoga studio can run ads to locals as they watch instructional videos. Car dealerships can send ads to people nearby as they watch review videos. With billions of videos covering just about every topic on earth, finding a niche is almost a guarantee.
The numbers support it as well. One report found that more than 70% of people bought something from a brand after seeing an ad on YouTube. That’s at least part of the reason why more than 55% of marketers report using the platform.
Many people consider Google the ultimate advertising platform—and for good reason. The company’s name has become so synonymous with finding information on the internet that it has become the verb we use to describe that action. So it makes sense that when people “google” something related to your business, you’d want to be there in the results.
Google offers a few key advantages to marketers, but its main advantage is the amount of data the company collects on its users. Whereas Facebook allows you to target users based on information they input, Google goes a little further. It tracks its users all over the internet, analyzing their behavior and creating “affinity audiences.” These are groups of people who, by their search habits and other internet activity, Google has identified as being particularly interested in a specific topic.
Another major advantage of using Google as a location-based marketing channel is its multi-channel approach. While you create your ads and select your audiences through one central platform, Google allows you to distribute those ads in several different ways.
There is, of course, search advertising. When users within your geofenced area and your target demographics search for keywords you’ve established (or related terms), they’ll see your text-based ads at the top or to the right of Google search results.
Google also allows marketers to deliver video ads. While these ads are hosted on the Google-owned YouTube, they can appear in many other places on the internet too. Marketers have several formats to choose from, ranging in runtime and the ability to skip the video if the user wants.
In addition to video and search ads, Google also offers marketers the chance to use its display network. This network is a wide-reaching cross-platform delivery channel. Display ads can pop up on everything from websites to apps and even games, allowing marketers to reach potential customers in a wide variety of ways.
But ultimately, one of the biggest advantages of Google as a channel is its own machine learning. The company uses algorithms to help gain insight into where advertising campaigns are performing—and where they’re not. Once it does, it offers users suggestions about what to put in advertisements and where to send them. Even the most experienced marketers can appreciate the occasional well-informed tip.
Examples of Targeted Marketing in Different Industries
When it comes to marketing strategies for small businesses, location-based marketing is an attractive option for almost any industry. While the strategies may vary depending on the business, geotargeted advertising is simply one of the most effective ways for small businesses to reach customers and become best-known in their communities.
Real Estate Agents
Real estate is both a competitive industry and one in which name recognition is essential. That makes location-based marketing an ideal fit for the industry.
One popular method is to geofence a small radius around “hot” properties on the market. As people drive to these properties, most will use their mobile phones to search for information—and are likely to be in the market. In these locations, people who fit the demographic filters will receive ads for the real estate agent.
Dentists
Dentists and orthodontists have also found a great deal of success using location-based marketing. Part of this is because dental practices are often fairly specialized, meaning they have a narrower audience than many other businesses.
For example, a pediatric dentist could market specifically to parents in a specific area. One way to do this is to set up geofences around local schools and deploy them at drop-off and pickup times. Marketers can target specific schools based on the average income levels of their district for added granularity.
Gyms
Location-based marketing is also well-suited for people looking to advertise their gym or fitness center. That’s because, at least in part, gyms are a lifestyle business. This means that people who are customers at gyms also tend to buy into other aspects of the fitness lifestyle.
As a result, marketers have plenty of geofencing options. Shoe stores, athletic wear stores, vitamin shops, and smoothie bars are just a few of the businesses that have lots of customer base overlap with gyms. Setting a geofenced area around these businesses can be an extremely effective way of delivering highly relevant ads.
The best way to reach customers and clients.
There simply isn’t a more effective way for small businesses to reach potential customers and clients than by using location-based marketing. That’s because precise targeting allows you to get the most out of every dollar you spend, focusing your marketing efforts and budgets on the people who are most likely to want to engage with your business.
But there’s another reason. Behind all the numbers is something that can’t be quantified—a genuine connection with your community. Location-based marketing can help you raise your profile and help people put a face to your name, associating your business with real people who live and work in your community—rather than a cold, faceless enterprise.
However, while location-based marketing is definitely effective, it’s certainly not easy. It is possible to DIY your location-based campaign, but without a working knowledge of CPCs, VTRs, and CPA benchmarks, it can be hard to get the kind of results you’re probably looking for.
Location-based marketing has the power to firmly establish your small business in your community and make you best known. Consider hiring a professional to help you get there.
