Location Matters - mindshareworld.com · digital twentieth century by connecting businesses in a (broadly defined) location with potential customers. These analogue platforms, collectively

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Location Matters

Introduction

On the one hand, as we buy more online our connection to the local high street weakens. The omni-presence of mobile means we remain connected to content from anyone at any time. Location is immaterial.

On the other, mobile has enabled tech companies to know precisely where we have been, where we are, and increasingly where we might be going, letting marketers tailor messages accordingly.

From a cultural perspective, location is more relevant today than ever before – for politics, business, and the economy.

As society has become increasingly fragmented, where we live often provides a fault line for divided opinions.

For marketers, the rise of location based marketing capabilities alongside traditional local channels can make for a confusing landscape and raise more questions than answers:

• How can a national brand feel relevant to very diverse communities up and down the country at the same time?

• How should national communications be integrated with precise, location based messages?

• How explicitly should location be referenced in messaging?

This report provides a way of thinking about the location landscape in its entirety, a discipline we call ‘localised marketing’; an insight into how consumers feel about di�erent aspects of localised marketing; and the strategies brands can employ to get the most out of it.

We hope it proves conclusively that for marketers Location Matters…

1

Matters... but how much?

Localised MarketingThe story so far

Localised marketing is, of course, not a new phenomenon.

Posters, the oldest medium of all, are intrinsically tied to a location and chosen because of the types of people who pass by that location. First local press, and then local radio, thrived in the pre-digital twentieth century by connecting businesses in a (broadly defined) location with potential customers.

These analogue platforms, collectively labelled local media, defined location by their distribution – they were only accessible in certain locations which determined their audience and whether they were of interest to any given advertiser.

With the advent of the desktop internet, it became possible to use IP addresses to target consumers on the basis of an individual’s location, rather than the distribution of the medium. But as desktop internet access was generally restricted to the home or work, the potential location applications were limited.

The real step change has been the rise of the smartphone with GPS capability.

This meant it was now possible to reach an individual based on their physical location whilst they were on the move and personalise messages to people based on their current location in real time; or identify an audience of interest based on their location history. When combined with dynamic creative and other data sets

(to form a more complete picture), an extremely compelling message could be delivered.

Not only could consumers be reached when in proximity to store - and ‘nudged’ via relevant, timely messaging, but they could also be profiled based on their historical geo-behaviours and reached with tailored messaging.

Trying to reach football fans? A device observed within a stadium on a match day would indicate a likely target. Looking to convert customers of a competitor retailer? Devices seen frequently within their retail spaces would suggest an audience of interest.

While local media are defined by their distribution footprint, these approaches, which have collectively come to be known as location based marketing, are defined by their use of individual location data.

As location based marketing has developed, the number of sources of location data have grown substantially. From the logged-in ecosystems of Google and Facebook, to mobile network operators, location ad networks and other data partners, there is no shortage of location data at the marketer’s disposal. The challenges for marketers in localised marketing have instead been twofold: data quality and integration.

Firstly, as with much of the digital sector there has been increased

scrutiny of the quality of the data in the marketplace. For location, the issue has been less about precision (how precisely can the location be defined?) and more about accuracy (can this data be trusted to be what it says it is?). Until recently, it has been di�cult to independently validate the accuracy of the data that location partners are supplying – something that is now starting to change.

GDPR has helped the issue of quality, as several US location media businesses decided to withdraw from the European market as they did not want to bear the opportunity costs of conforming to GDPR. The scale of the audience that location networks can address and share has been limited, but overall quality has improved.

Secondly, marketers have had to grapple with the issue of integration. As location opportunities have become increasingly sophisticated, there has been a danger that highly localised communications become disconnected from wider brand building activities. The modern marketer needs to consider how location based marketing can be used alongside both local and national media. Brands need to strike a balance - appealing locally but without investing the time, budget or resources required to localise to the nth degree.

In the next section we outline a way of approaching the entire localised marketing landscape to help marketers think about the question of integration.

2

Location Matters

Localised MarketingThe landscape of communications opportunities

As the range of channels and techniques in localised marketing becomes more diverse, straddling both digital location based marketing and analogue local media, a consistent way of thinking about the landscape becomes critical if a marketer is to be successful in integrating localised marketing with other channels.

There are many ways to map out the opportunities, but the two critical dimensions to consider are:

Communications role – what is the strategic purpose of the communication?  Is it intended to communicate the brand proposition or is it more focused on driving a sale? 

Consumer perception of the communication - how does the consumer perceive the communication? Does the message feel aimed at just the individual or at a member of the local community? Some channels (typically local press or radio) are more suited to messaging that aims to make the recipient feel that it’s for a group of people (i.e. the local community). Others (typically digital channels) feel as though they are messages served to the individual, often unrelated to the contextual environment.

Taken together, these dimensions can give marketers a set of approaches for using localised marketing based on their strategic needs.

PAST PLACES When the communication goal is brand focused and positioning the message in a community context is not required, marketers can use location data to identify an interest group and reach them with a brand message.

HYPER-LOCALWhen looking to communicate a sales or conversion message to an individual in a place close to the point of the purchase, marketers can take advantage of hyper-local capabilities in a range of digital channels.

3

COMMUNITY ENGAGEMENTFor brands looking to position themselves as active contributors to the local community, marketers can use local media in conjunction with community group partnerships.

DIRECTIONALFor brands looking to ‘nudge’ consumers into a sale when in physical proximity to store, marketers can use directional messaging on public, community channels.

Location Matters

Consumer Perception of Communication

BrandBuild Brand

DemandConvert Demand

Broadcast to a CommunityFor People like Me

Key

Targeted to IndividualsFor Me

Role ofCommunications

Past PlacesTargeting individuals based on past location with brand message, limited or no reference to location.

Community EngagementReaching a broad group from a particular place; communicating membership of the local community often by leveraging community media.

Hyper-LocalTargeting individuals in a specifi c location with a direct response message.

DirectionalTargeting a group in proximity to a specifi c location with a direct response message, often directional.

MESSAGE

‘Dehydrated? drink this’

TARGET

CHANNEL

Regular gym goers as defi ned by location history

Digital Display

‘Take part in our retailer - local school partnership’

Local Shoppers

Experiential, local press and local radio

‘50% o� on X. 500m to your closest store’

Shoppers in key demographic within range

Digital Display, search, retailer app

‘2 for 1 in-store today’

Shoppers entering store

POS 6s

Summary Strategies here typically involve identifying interest groups inferred from historic location data, and delivering a brand focused communication. For example, identifying a group of people whose location data indicates they regularly visit the gym and delivering a brand message about a sports drink. The communication is unlikely to be overtly sales oriented or explicit about the location in the messaging.

Typical Channels

DIGITAL DISPLAY

SOCIALMEDIA

ADDRESSABLE TV CRM

ExampleM&S wanted to reach a ‘foodie’ audience - people with a particular interest in food, who would respond well to the foodie messaging of their campaigns. In addition, they wanted to talk to foodies who shopped at their competitors - eg Waitrose. Areas such as Borough Market were geo fenced, as well as competitor stores. Smartphone users who were seen in these locations in the 30 days prior to the campaign were targeted.

Past Places

4

The consumer view Awareness of location tracking tech such as the GPS on a mobile is now very high, with over 9 in 10 people claiming to know about it, and around half of them being unconcerned about its presence. But despite this top line awareness much of the time people do not realise how it is being used on a day to day basis, by either the device itself, the tech companies they turn to, or the brands they buy into. This lack of more detailed understanding makes many people uncomfortable about the concept of their location

data being collected, though this is less of an issue for men, under 34s and city dwellers. A slightly di� erent story emerges though, when we explore location data from more of a practical application angle. For this quadrant in particular, the examples we tested received much more positive reception. For many people, this was the most acceptable form of location data application, getting the right balance of cool / helpful whilst avoiding being too intrusive or irritating.

Strategic principles • The reduced emphasis on location

within the message content, makes this a useful route for brands with no physical presence in the community (e.g. FMCG)

• Least likely to feel intrusive or creepy as an approach, so ideal for those brands with audiences who are sensitive to how their location data is used.

• Whilst the location signals used to identify individuals can be very precise e.g. a past visit to a restaurant or shop, ensure the messaging itself errs more towards serendipity, rather than being too “aware” in tone – keep any location references very broad.

Future Developments We will increasingly see historic location data be used as a vehicle for enhancing other media channels. For instance, mobile data sets will further automate planning and buying of OOH (out-of-home) based on ‘real-time’ movement patterns of a brands target audience. This will allow brands to run OOH campaigns that are optimised throughout the day based on the movements of their audience.

Additionally, we may see brands create addressable TV strategies whereby they serve di� erent messages to consumers based on their historic location behaviours. This would allow, for example, a shampoo brand to message regular gym goers di� erently to frequent fl yers, thus increasing the relevance of the message.

How comfortable are you with your mobile phone storing data about your location? (% agree)

LOCATION TOTAL

UNCOMFORTABLE

18 – 34

55+

BIG CITY

LONDON 48

44

16

36

27

36

37

56

44

48

COMFORTABLE

Source: Mindshare Location Matters • 1300 smart phone users

Location Matters

Community Engagement

5

Summary Activity here generally involves reaching a group of people from a particular geographical community. The intention is to communicate (implicitly or explicitly) that the brand is part of that community too and that therefore is for ‘people like me’. Using community media like local press and local radio also gives a tacit endorsement of the brand from the community.

Brands may also wish to form local partnerships with community groups or not-for-profits as another way to demonstrate they are good corporate citizens in the local community.

Typical Channels

PARTNERSHIPS EXPERIENTIAL LOCAL PRESS

LOCAL RADIO OOH

ExampleAmex wanted to support small, local businesses as a way of simultaneously demonstrating their customer rewards and recruiting more SME merchants. While broadcast comms (TV and national press) provided awareness of the overall concept, they ensured ‘on the ground’ media touchpoints on or near local high streets and instore gave the campaign a local community feel. Local areas were also called out in the copy (‘Balham. Let’s Shop Small’).

The consumer view With a focus around the geographical community, and away from the collection of the individual’s location data, this is a much easier quadrant for audiences to accept. Touchpoints are typically more familiar and community media resonates especially well with women and is accepted positively across all age groups. The examples we asked about were felt to be far

less intrusive than some of the more data driven scenarios we explored. Out of all the examples we tested, the ones that live in this quadrant were the least likely to be described as weird, intrusive or annoying – though there was more chance of them being thought of as irrelevant, versus some of the more data driven examples we compared them against.

Strategic principles • For brands with a physical presence

in a community, don’t remain on the margins – consumers now expect brands to be active participants making a positive local contribution. Explore local CSR partnerships for example.

• To increase a�nity with a national brand, tailor messaging and content specifically to the community, and use channels that have relevance to the location. Be cautious though

if there is no reason for the brand to be there – this should feel properly rooted, rather than a lip service exercise.

• Pitch messaging at the community level. Whilst localising content improves e�ectiveness through perceived relevance and personalisation, going too local can alienate, or begin to feel irrelevant, as it becomes too specific for the wider audience.

Future Developments Technologies such as AdSmart and other addressable TV solutions have opened up TV advertising to more local and regional advertisers. Additionally, this technology will give national brands the ability to adapt creative to be more locally relevant to the communities they are speaking to, through for example, incorporating local dialects and imagery.

We expect to see increased localisation of retail environments in response to community needs. Nike in Los Angeles are already using the insights and behaviour of their NikePlus members to create a new type of store, Nike Live. This store stocks products based on the behaviours, preferences and buying habits of the local community to o�er customers in that area the products they want.

Amex Let’s Shop Small

Location Matters

Summary For advertisers looking to drive sales from consumers in or around a physical location, Hyper-Local communications are very powerful. Opportunities here include reaching consumers with a deal suggestion when within range of a store, notifying loyal customers as they enter a store with personalised o� ers in an owned app or retargeting customers who have left a store in a given period.

Messages are typically very deal-orientated, personalised where possible, and designed to convert intent into action.

Typical Channels

DIGITAL DISPLAY SEARCH RETAILER APP

ExampleLike many car manufacturers, Mazda has a franchised dealership network around the country. Mazda and its 130 strong dealership shared one of the most competitive search space in the world, without a unifi ed PPC strategy. All franchisees accounts were centralised into one unifi ed search programme in order to implement a multi-domain, radius-targeted search strategy. This involved regional, local and postcode level tiers with copy adapted for the local dealership.

Hyper-Local

6

The consumer view Given the issues that many consumers have with brands using their location data, it’s no surprise that this quadrant contains some of the more polarising applications that we tested. Those examples that respected people’s boundaries and facilitated control were the most successful. Localised search ads were considered valuable. Similarly, a supermarket notifi cation

about deals triggered when you walk in store was nearly twice as likely to be described as being helpful when served via a (requested) app notifi cation, versus a similar example served via text. However, ads featuring your specifi c location, or appearing to be too knowledgeable about personal details, were much more likely to raise creepiness concerns.

Strategic principles • Develop a testing framework to

explore the ways in which an individual’s time-specifi c location data can be used as signals for their future intentions and actions. These can then be linked to performance marketing and lower funnel communications, for example;

― Retarget a location defi ned audience with another location specifi c ad. For example, evening o� ers on commuter routes for food retailers or delivery services or a drinks o� er

at Wetherspoons served to people leaving cinemas at 10pm

― Test hyperlocal search copy and refl ect hyper local terms in your on-page content to capitalise on the shift to a mobile fi rst environment and the rise in “near me” and “nearby” searches

• The more one to one nature of

the environment carries an implicit suggestion that communication is personalised - adding impact to any o� ers or promotional messaging.

Future Developments The opportunity to tailor messaging by combining location data with additional data sets is starting to become apparent. Brands will increasingly be able to alter digital messaging based on factors such as stock availability at

a specifi c location on a real-time basis. We are starting to see retailers test this in their owned channels (e.g. apps) and search to provide customers with real-time stock availability based on a consumer’s current location.

1ST ROMFORD MAZDA

2ND CRAYFORD MAZDA

1ST CRAYFORD MAZDA

2ND ROMFORD MAZDA

Awareness of GPS data on mobile (% agree)

Source: Mindshare Location Matters • 1300 smart phone users

AWARE OF GPS ON MOBILE AND NOT BOTHERED

AWARE OF GPS ON MOBILE AND

CONCERNED

NOT AWARE

4745

8

Location Matters

Directional

7

Summary Directional communications work best for advertisers with a widely relevant proposition (eg FMCG, quick service restaurants) looking to convert people within close proximity of their store or product distribution. The message is conversion focused and intended to make the path to purchase as straightforward as possible.

Typical Channels

POINT OFSALE OOH

DOORDROPS

ExampleUnilever wanted to make Hellmann’s BBQ range more relevant for its audiences across the key summer period. Point-of-sale OOH sites were bought outside supermarkets showcasing the Hellmann’s BBQ range and directing people in store. However using real-time store data, the copy was adapted to reflect which types of BBQ meat were most popular in that location at that time. This approach proved even more e�ective than in comparative stores where generic Hellmann’s BBQ copy ran.

The consumer view The broadcast nature of both the channels and the messaging within this quadrant meant that consumers were more relaxed about the scenarios we shared with them. The localised dimension of the data is added in through wider local market signals rather than being specific to them

as individuals, and this helped to overcome many of the issues that audiences had around intrusiveness, creepiness and messaging being too “aware”. In particular, the examples that we explored in this quadrant, were positively received by older age groups and suburban and rural locations.

Strategic principles • Location data isn’t just about the

GPS info available from someone’s mobile. Use local market signals such as weather or store level retail data to tailor digital OOH communication with a local spin.

• Match the channel and the message. Messaging about events which are widely relevant, such as store openings, are more expected in these broadcast environments.

Future Developments With the increased investment in the digital OOH (out-of-home) network nationally, greater opportunities exist for dynamically changing creative to be sensitive to local conditions. The combination of data sets such as weather or stock availability with location data will allow brands to adjust their directional messaging to be even more relevant to consumers’ current need state.

We will see growth in digital sites which use image recognition to profile the audience looking at the ad. This could employ facial recognition to work out if the viewer is male or female or a certain age - and provide a directional message to point of purchase. It could also involve the recognition of car license plates in tra�c and send directional messaging based on the vehicle type – for example car servicing or a new car.

Source: Mindshare Location Matters • 1300 smart phone users

Big brands should be supporting my local area (% agree)

TOTAL

59

18 – 34 35 – 54 55+ PARENTS

63 62

53

70

Location Matters

Human Insights

8

Handle with careWhen thought about in isolation, the usage of location data by brands and tech companies at first appears a sensitive boundary for many people. When considered in a more practical light e.g. locally adapted search, and when treated with respect and to add value to an interaction, its applications are positive.

People have a growing awareness about the amount of data that is being collected about them, and location data is one of the more sensitive sources for many – with only 1 in 5 people saying they are comfortable about the idea of brands making use of it.

However, the story is not as cut and dried as it first appears. Whilst location data usage, in theory, is unsettling, people are much more positive about its use in practical applications, where they can better understand how it might benefit them. Of the range of di�erent location based examples we tested, all but one of them were described as “cool” by our sample.

Respecting personal boundaries is important for this acceptance – it doesn’t do to demonstrate too much knowledge about the individual or be too intrusive in terms of channel choice. And the brand needs to have a viable reason to be using the location element in the first place, and ideally be one where there is a relationship already - for example, 43% found location based comms helpful if from a shop they use vs only 24% if there was no existing relationship. If these rules are followed consumers are much more likely to view brand communication in this space as helpful and relevant. And this acceptance is even higher for certain groups – younger audiences, those in cities - London in particular – and parents, are all more positive about the di�erent ways in which location data can be used by brands.

It is worth noting that there will be times that the message does not overtly reference the location which changes how the consumer perceives the experience - e.g. when using location to define targeting parameters - when this is the case, these factors are less of a consideration.

People have strong ties with their local area and there is an expectation that brands with local presence should be active contributors to that community.Community and place matter to people. Over half of our sample agreed that they have a strong sense of connection with where they live - a sentiment that was consistent across age groups, with the exception of the under 24s, and one that was the same whether they lived in the city or the countryside.

Similarly, two thirds of them agreed that they like spending lots of free time in their local area, a behaviour that ran even deeper for parents, reflecting the fact that they are raising children within that community. Some regional di�erences could also be seen. Scotland, for example, was fiercely positive about that sense of connection with where you live, with the North of England showing similar tendencies. Surprisingly Londoners – who were more likely to claim to have lived in lots of di�erent locations over the years, were one of the top regions to claim they are part of their local community. An approach to life of “Wherever I lay my hat, that’s my home” perhaps?

And there are real expectations of brands when it comes to these local communities. As public services get cut back, people are looking to brands which have a local presence to play a bigger role in their community, beyond employment. Overall, 6 in 10 people think that ‘big brands should be supporting my local area’, with even higher expectations amongst parents, city dwellers and those aged 25 to 54.

Community messaging in a local environment creates a ‘social proof’ e�ect. Community messaging in a local environment is a unique proposition. The broadcast nature of it is one dimension but when combined with the endorsement of a trusted local voice, something really powerful starts to happen - with the combined experience amplifying the sense that the message is meant for ‘people like me’.

This can work particularly e�ectively for national brands who have a local presence. Messages such as ‘Hello Leeds’, communicated using community based channels, increase not only the relevance of the message, but also the connection with the audience. We like to have the reassurance that others are doing the same as ourselves. By rooting communication in the local environment, brands can leverage this ‘herd’ e�ect.

Our research also showed that people actually prefer to hear more information led messages such as events, store openings and business recommendations via these public types of community media versus o�er-led communications in more one to one channels.

43% found location based comms helpful if from a shop they use vs only 24% if there was no existingrelationship.

Location Matters

Strategic Recommendations

9

Get involved in the local community.There’s a growing view amongst consumers that brands should make a bigger contribution to the local community. But not every brand has the licence to do this credibly.

Brands with a physical presence in the community (e.g. retailers, grocers, car dealerships, high street banks) who employ local people are best placed to form local partnerships with not-for-profits or community groups in a way that feels respectful and authentic.

For brands which are not so rooted in the immediate community (e.g. FMCG, food and drink, financial services) there needs to be a wider social purpose which can be adapted locally, otherwise a local partnership can seem forced (‘what do you know about this town?’) or worse, heavy handed. Where there is a wider issue that has local relevance – for example Amex’s Shop Small campaign to support small, local businesses, or Persil’s Dirt is Good campaign which involved local events to encourage kids’ outdoors play – this challenge can be successfully navigated.

Localise your messaging to the right level for your brand. Localising copy improves e�ectiveness through perceived relevance and the sense that the brand is ‘for people like me’.

Brands with a physical presence have greater licence to localise copy than those that don’t, as like local residents, they are stakeholders in the community too. For these types of brands pitching at the wider ‘community’ level and not making the copy hyper-localised (unless for directional messaging) is key. Making messaging too local can alienate (feels odd or creepy) or feel irrelevant to too many people.

As with community engagement activity, a brand message framed at the community level can provide valuable context for hyper-localised conversion messages. A retailer might follow up a ‘New store opening in Brighton’ OOH message with hyper-local digital activity o�ering 50% o� to people within 100m of the store.

For brands without a physical presence in the community it is generally harder to refer to place in messaging as they lack the local heritage and therefore better to focus on the core brand proposition itself.

Maximise the full range of location data sources.Naturally, brands should be using mobile location data as ‘intent’ signals for performance marketing. In the post-GDPR world this is likely to be of increasing quality. Particularly for brands with their own location in the community, this type of data should be used to identify and convert potential customers. It should also be used more widely to identify interest groups based on past location for brand advertising.

But, brands should expand the types of location data they are using to adapt communications locally. Weather data is perhaps the most established way of making communications more relevant through real time adaptation. Retailers should also be using localised data about buying trends or stock levels to refocus messaging on particular products to suit changing local circumstances and consumer needs.

Location Matters

Matters

AcknowledgementsHuge thanks to the following for their hard work in creating this report: Sophie Harding,Jeremy Pounder, Julia Ayling, Ric Santeugini, Amanda Harrison, Davina Rajoopillai, Neil Bruce and Charlotte Ince.

This book was produced by Mindshare Futures, edited and designed by the Marketing Team@ Mindshare UK. First Edition: 700 copies. Printed by LovePrint Inc. in London, United Kingdom. Digitally printed on Naturalis Matt Absolute White. 350gsm September 2018 © All rights reserved. Mindshare Media UK | www.mindshareworld.com

ContactsDavid WalshChief Business O�[email protected]