Now It’s Personal: Consumers Are Welcoming More Relevant and Local Messaging
February 27, 2017
Brick-and-mortar shopping is undergoing a transformation. The technology of localized messaging and, importantly, consumer enthusiasm for personalization, are driving the industry forward like never before. Data shows four out of five consumers want their advertising or search results to be targeted to their local market. Local searches are growing 50% faster than all mobile searches and more than half of “near-me” searches lead to store visits. (1) More and more, brands and their local retail partners are responding to the trend by utilizing location-based advertising technology and a treasure trove of consumer data. They are meeting their targets where they are geographically and delivering more effective mobile messaging.
Why are today’s consumers so powerfully motivated by geographically relevant ads?
Consider the cultural moment we inhabit. We are rapidly moving toward increased personalization and customization in every aspect of life. Consumers can choose to customize the embroidery of their Levi’s and the covers of laptops are personalized. Every decision we make (from our iTunes choices to our political views) contributes to a “personal brand” which many of us happily project to the world more than ever before. In the words of retail expert Jackie Chiquoine, “because we spend so much time on social media, everyone lives their life as if they’re a public figure.”(2)
Even those who don’t personally have a YouTube channel or blog have likely adapted to this new normal especially in their online behavior. Remember when people didn’t use their own name as part of their email address? No longer. Today users expect others to see their identity. Victor Milligan, CMO at Forrester Research recently said that “[Consumers] expect firms to contextually understand who they are, to respond to their needs and in many cases to anticipate them.”(3)
Consumers are getting comfortable with companies knowing more about them through their behavior online and even realizing some of the benefits that “being known” online can provide. A report from eConsultancy and Acxiom from December 2015 breaks consumers down into three categories: Pragmatists, Fundamentalists and The Unconcerned. The Pragmatist might consent to providing personal data after some consideration, and that group has grown from 53% to 54%. The Fundamentalists are “ideologically opposed to data sharing” and have decreased in size from 31% to 24%. The Unconcerned are those who don’t mind where their data goes, and have grown from 16% to 22%. More of the people who are online either appreciate or accept the “value exchange in data exchange” and fewer people are rejecting it. (4)
Which kinds of personalized messages work and why?
A 2016 study published in Journal of Consumer Research suggests that consumers naturally gravitate toward messages that fit their ideas about who they are.
“We found that participants were more interested in buying a Groupon for a restaurant advertised as sophisticated when they thought the ad had been targeted to them based on specific websites they had visited during an earlier task (browsing the web to make a travel itinerary) compared to when they thought the ad was targeted based on demographics (their age and gender) or not targeted at all. This suggested that behavioral targeting specifically—not targeting group level attributes—increased their interest in the product.”(5)
In other words, researchers found that when people know that an ad is targeted to them specifically based on past behavior they are more likely to purchase. The ad functions as a “social label” that people want to adopt and which they can reinforce by making a purchase. Interestingly, the research also found that it only works “when the label is plausibly connected to consumers’ prior behavior (i.e., when the targeting is at least moderately accurate).” People lent credence to the personal messaging specifically because they know the brand knows true information about them.
Personalized messaging based on consumer location works when it creates value for consumers and provides a real world personal connection to a brand. “With consumers using the check-in function on sites like Facebook, the message is that they want others, including business, to know where they are so they can receive information that helps make it easier to find what they need or what’s available while they are there.” (6)
How are brands using location-based advertising in creative ways to deliver on their brand promise and drive sales?
WholeFoods has emerged as one of the leaders in location-based advertising and creating value for consumers is at the heart of their mobile strategy. In 2015 they placed geofences around their locations and targeted ads and special offers to passersby. They also employed “geo-conquesting” tools to target shoppers near competitors. The campaign’s post-click conversion rate was 4.69% – over three times the national average. (7) More recently they’re also using smaller ticket “trip driving promotions” through mobile. David Lannon, EVP of Operations at WholeFoods, explains “a 25¢ cup of coffee with our friends at Allegro, 99¢ green smoothies, 25¢ cookies…Those are things that get people up off the couch, into the store. Hopefully, they’ll continue to buy other things when they come in.”(8)
Insurance company Allstate is using location-based technology to provide better roadside service when customers need them most and also to market to their target more effectively when they’re on the go. Amish Tolia, Chief of Strategy for Allstate’s mobile marketing partner Pear, stated, “for brands, the key to actively engaging their target audiences is by reaching them within their everyday lives. By connecting with the right consumers at the right place and time, brands are much more likely to make a lasting impact and see a return on investment than they are with generic marketing campaigns.” Sanjay Gupta, CMO of Allstate emphasized the brand-building benefits, “Hyperlocal social marketing allows brands to communicate to a group of individuals with similar interests in a specific community or neighborhood. Providing agents with opportunities to connect with customers on a more personal level further demonstrates that they care about them and the local community.” (6)
Location-based advertising also provides new opportunities for PR-worthy promotional opportunities. Burger chain Sonic used geo-targeting in a brand new way to promote Creamery shakes to a young and influential target at the Coachella music festival last April. Attendees could view the fun flavors and adorable square cups on Instagram and order one directly through Instagram while they’re enjoying the festival. Geo-fencing technology allowed Sonic to find the customer at the festival and deliver the shake personally in minutes. (9)
While some brands are using location-based advertising to effectively drive sales, build their brands and surprise and excite their targets, most are not using the medium to it’s full potential. Consider these best practices to get the most out of your investment.
Balihoo’s Seven Tips for Creating Effective Location-based Advertising
- Make it worth their while. Use messaging to offer customers something valuable, new or exclusive
- Use good data (location and personal). Both Google Display Network and Facebook Advertising utilize incredibly granular behavioral and interest data to make hyper-targeting a breeze.
- Segment your targets so messaging is as specific to the location and customer as possible. This might require research into offline behavior and preferences, purchase history and when and how the targets make purchases in your category.
- Consider the optimal timing for message delivery. Right message, right time, right place. Local paid search campaigns are especially useful for capturing mobile searchers looking for a product or service in their vicinity at their exact moment of need.
- Localize all creative marketing, search ads and online landing pages. Software platforms such as Balihoo help to localize and version out digital advertising assets across tens of thousands of locations, and can also ensure best practice optimization and campaign setup.
- Personalize the execution. Consider using the target’s first name in creative and tailor the messaging and offers for existing customers vs. new ones.
- Test and optimize. Consider launching smaller scale to start and find out what’s working and what’s not. Use data analytics to continually tweak the campaign once it’s launched and get the most out of every dollar.
(1) “Why Developing a ‘Near Me’ Strategy Has Become Critical for Local Marketers,” Brendan Morrissey, StreetFightMag.com, January 15, 2017
(2) “The Psychology of Customization,” Racked.com, June 1, 2016.
(3) “Top 5 Customer Experience Trends for 2016,” Iperceptions.com, January 13, 2016
(4)“Value Exchange from Data Exchange,” eConsultancy.com, December, 2015
(5) “Targeted Ads Don’t Just Make You Want To Buy – They Can Change How You Think About Yourself,” Harvard Business Review, April 4, 2016
(6)“Hyper-Local Marketing and What it Means for Brands,” Forbes, April 2011
(7) “4 Brands That Are Winning At Location-Based Marketing and How,” Beaconstac.com, April 19, 2016
(8) “WholeFoods Pushing Promotional Strategy,” Foodbusinessnews.com, February 11, 2016
(9) “Sonic is Making Awesome Square Shakes Designed for Instagram, Sold Through Instagram,” Adweek.com, April 4, 2016