Location-Based Advertising: An In-Depth Guide for 2022

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One of the most crucial advertising tactics in the marketing industry nowadays is location-based marketing. Its foundation is location analytics, a subset of data analytics that uses information about physical places and human activity. GPS and opted-in data from mobile devices provide enormous volumes of geographic data that marketing and operations professionals may utilize to guide their business decisions and more effectively target and understand their consumers.

This article discusses location analysis, how businesses can use it, and why location-based advertising is imperative for keeping up with the competition. 

What is location analysis?

By examining audience demographics, psychographics, brand affinities, trade regions, pathing, and other crucial criteria, location analysis assists businesses in selecting the best site for establishing their new offices, retail outlets, or manufacturing facilities. The objective of location analysis is to accelerate business decision-making. 

Business location analysis typically includes five areas of interest.

location analysis

  • Trade area research examines the region that consistently sends customers to the business. It would also consider whether it is possible to reach the trading region from other locations.
  • Competitor analysis helps to understand the presence of your rivals within a given trade area. 
  • A traffic analysis considers pedestrian and vehicle traffic passing through a site. It can estimate the number of customers that pass through and suggest alternative sites. 
  • Site economics refers to the cost of an establishment and associated operational costs. 
  • A demographic analysis entails researching the total population (in numbers), age distribution, per capita income, degree of education, occupational structure, etc.

Analytics transforms data into valuable information by identifying and highlighting trends, patterns, and correlations in charts, graphs, and tables. Statistical reports utilized by several organizational divisions, including business intelligence, customer relationship management, resource management, and asset management, are the aim of location analytics. 

Organizations have recently begun connecting human mobility data to customer insights after realizing the advantages of doing so. Location analytics is based on thematic mapping, geographical analysis, and research into how people move across space and over time.

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How businesses use location analytics

Businesses spanning many verticals can use location analytics to improve their processes and decision-making. Real estate, retail, logistics, tourism, and restaurant sectors can all use location analytics to their advantage. 

Improving your return on investment (ROI)

Location analytics can provide accurate insight into business performance and potential in a timely manner. You can see where your limited budget would benefit from combining the right data (from store sales figures to customer service feedback) with highly accurate location information. 

Furthermore, using techniques like heat mapping, you can zero in on investment 'hotspots' at a glance, saving hours spent going through spreadsheets and tables.

Knowing your customer

A better understanding of your customers is critical for any business. A company that knows its customers well is more likely to attract and retain them in the long run. Location analytics assists marketers by providing information on the area's total population, age, average income, education, occupation, and brand affinities. 

It can also give marketers information about consumer behavior, such as purchase paths, dwell time, frequency of visits, and where audiences go after visiting a location. These insights are used to inform marketing and advertising strategy, improve messaging, and target the appropriate audiences.

Cost control

By overlaying business intelligence on top of location-based data, it is possible to visualize business performance at a glance, including how much money the company is spending. This isn't just for things like marketing, wages, or rent. You can delve into manufacturing data, logistics data, supply chain data, customer service records, store losses/breakages, and other areas to identify 'hotspots' of underperformance or inefficiency costing you money.

The map also makes it simple to identify correlations and patterns in the data at the national, regional, and local levels and down to specific stores to uncover previously unknown cost sources or triggers.

Competitor benchmarking

You can assess your competitors' campaign performance by observing foot traffic to their store or learning about their audience demographics, dwell time, and frequency of visits. Competitor insights are one of the most powerful benefits of human movement data. 

You can get data on any location by defining the boundaries of what you want to study on a map. This includes both your company and your competitors. While you can learn more about your own customers, having these insights on your competitors is also important. See how your visitors stack up against theirs or your location stacks up against theirs.

Customer loyalty

Geographical location is more than just a natural common denominator for traditional customer information, such as where customers live, what they buy, and where they buy it from. It also connects seemingly unrelated data sets like point-of-sale data, online activity, and customer complaint data. If you use a system that is entirely based on location-based data, you can integrate all of this information to create more comprehensive customer profiles.

What is location-based advertising, and how does it work?

Location-based marketing is a strategy that matches opted-in, privacy-compliant smartphone location data to points of interest such as restaurants, grocery stores, and shopping malls. Marketers then use this information to develop location-based audiences and analytics. Marketers create and reach out to their target audiences to provide them with more relevant advertising and content.

location based advertising

There are three core components to location-based marketing.

1. Geofencing

Geofencing is drawing a circle around a location or locations visited by an audience to serve them real-time ads and content.

Radii and polygons are two techniques for achieving this. A radius draws a circle around a location and assumes that anyone with a mobile device is a visitor. The issue with this is that it might detect bystanders instead of actual site visitors. Because they outline the physical structure of the point of interest, polygons, or drawing shapes that correspond to the building's footprint and parking, are more precise.

2. Geotargeting

Geotargeting is creating audiences based on previously visited real-world locations and points of interest.

Marketers use the locations most pertinent to their campaigns to create audiences and deliver ads and content.

location based marketing
3. Geoconquesting

Geoconquesting is the process by which marketers create audiences from visitors of competing locations to convert those customers into their own.

Ads are targeted when prospective customers are close to the locations of your rivals. When they go to a competitor's retail location, they will get push notifications or advertisements for your company's products. This is how many businesses entice customers to choose them over competitors by offering them discounts.

Marketers who use location-based audiences have more faith in the relevance of their audiences because these consumers have visited the stores, eaten at those restaurants, or attended the event, versus those who create their audiences from inferred interests based on website visits, likes, or follows on social media.

Beacon marketing and blueprint location marketing are two additional strategies that can be used. 

beacon marketing

The advantages of location-based advertising

There are plenty of benefits to adopting a location-based marketing strategy. 

Personalizing your messages increases the likelihood that many people will find them relevant and thus effective. Location-based customized messages follow the same principle. This practice allows you to better understand your customers and develop much more thoughtful marketing strategies.

You can target customers based on their location by enticing them with nearby offers and discounts. Not only that, but you can target customers based on socioeconomic geodata. Marketers, for example, can set up geofences around colleges, universities, and bars to target ads based on location.

Specific customer segments can receive localized messaging and advertisements based on their past location or search activity. This highly customized customer segmentation can improve ROI by limiting campaigns to customers with the highest likelihood of converting.

You can better understand your customers and serve them relevant and personalized ads about the things that matter to them most by using real-time location data. Because the advertisements contain information pertinent to them, it also helps increase customer engagement.

Some geotargeting mobile technologies even let you notify customers when they enter or leave a fixed area (geofence) or reach users in real time at a specific street or block. Many people would only see advertisements this way when about to convert, meaning advertisers could make the most of their budgets.

A closer relationship with your customers is another significant aspect of location-based advertising. By using location-based information, you can communicate with your customers more personally, fostering greater understanding and trust. By offering pertinent information, you can address their concerns and even fit in with your advertising location's particular "vibe."

Examples of location-based advertising

In 2015, Coca-Cola started to research the effectiveness of location-based advertising using beacons in a Norwegian cinema. 

As soon as patrons entered the theatre, they could redeem a beverage for free. Due to the campaign, 50% of users received free Coca-Cola, and 60% of these users kept using the app. Although there was no indication of monetary gain from the experiment, it amply demonstrated how beacon marketing could boost consumer engagement and compel them to engage with brands.

Alcohol brand Campari America has used location-based advertising to its advantage. Users between age 21 and 34 were targeted when approaching areas with a high concentration of bars or restaurants. Users who checked in at a location could become eligible for a discount on ride-sharing services provided by another company, Lyft. 

This helped Campari America build brand awareness when consumers spread the word amongst their friends on social media, allowing the brand to form deeper connections with them by attending to their needs.

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Starting with location-based advertising

Although it may be tempting to jump into implementing a location-based marketing campaign immediately, it is critical to do your homework. Research and develop a strategy before incorporating these tactics into your marketing efforts.

Step 1: Planning and researching

Before launching a location-based marketing campaign for your brand, there are several things to consider. To begin, explore using your customers' location data to reflect on how they move and act in the real world.

Use only accurate, precise and recent information for location-based marketing. The more recent, specific and granular the location data, the better the campaign is likely to perform.

Match geolocation data with demographic and behavioral traits to better understand your target audience's needs and interests. This will assist you in providing appropriate solutions and presenting them effectively.

Think about how your customers might profit from your offers and what they might regard as the most crucial aspect of them. Then, indicate the ideal time and location to target them, along with the perimeter of the targeted area. If you can access their search history and other behavioral information, use it to your advantage to create customized messages.

Choose the most appropriate channels for your campaign and the messaging that will work for each (based on the target audience). The result should be a seamless omnichannel customer experience that meets the target market's needs. 

Step 2: Creating the right strategy

Choose the location-based marketing strategy that suits you the best. The best use of geotargeting is in broad geographic areas. To ensure a positive customer experience, make sure you tailor your web content, promotions, and advertisements. Present pertinent and targeted advertisements to your specific segments. 

Geofencing and geo-conquesting can be used to promote your business in a way that is even more targeted. Geo-conquesting can assist you in luring clients away from your rivals. You can delight prospective customers with an individualized experience that might encourage them to switch to your brand.

Of course your strategy will depend on your budget, available channels, and resources at your disposal. 

Step 3: Personalizing messages and ads

It's hugely important to consider how to make the most impactful creative assets for your ads. These determine whether you successfully grab consumers' attention and turn them into devoted customers.

Remember that some formats perform better for particular business objectives, while others work better with specific channels.

Ensure the advertisement won't interfere with the user experience; less colorful but more effective creative is always preferable to intrusive ads.

And while personalization is important, don't get too personal with your ads to the point that consumers find it creepy or offensive. To offer the best experiences, try to balance personalization and privacy.

Step 4: Launching a location-based marketing campaign

After launch, you must continually optimize and manage your location-based advertising campaigns. 

Start by choosing the basic campaign settings, such as active time, traffic and device type.  Remember that location targeting performs best when combined with other techniques. The goal is to display ads only to the appropriate target audience. Still, the best practice is to test various targeting options and narrow your audience as you learn what's most effective at driving ROI for your business.

Get started with location-based advertising

Unacast can help companies launch their location-based advertising campaigns by providing the industry's most accurate location data. 

Book a meeting with Unacast to see how we can deliver dynamic demographic, location, and foot traffic data. Work with our team of data scientists to get the perfect view of the data for your business. If you're ready to level up your data game, speak to Unacast today and ask about a free data sample. 


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