Photo: Getty Images/Finn Hafemann
Can location-based marketing overcome its creepiness factor?
A global survey from Marigold (formerly CM Group) finds 67 percent of U.S. consumers think ads based on location data are “creepy” with only 31 percent comfortable sharing their location in real-time.
Ads based on location data overall were found to be the most “creepy” among the marketing practices explored, just ahead of ads related to something they talked about near a smart device (63 percent) and retargeting ads derived from third-party cookie tracking (61 percent).
Consumers have become accustomed to using location-based technologies when driving their cars using Google Maps or searching for nearby restaurants or stores with their GPS-enabled mobile phones. The technology also powers in-store navigation via apps from Home Depot, Lowe’s and Walmart.
Uber and Lyft last fall rolled out location- and time-targeted ads across car rooftops.
However, the promise of sending coupons to shoppers in aisles in real time as they pass by in-store displays or sending two-for-one happy hour appetizer alerts to drivers as they approach a restaurant haven’t lived up to the hype.
The opportunity is still being touted, however, with the average consumer spending four hours and 29 minutes daily on mobile devices, according to eMarketer. Also, mobile advertising in the U.S. reached $34 billion in 2022, the biggest share of the overall $77 billion digital market, according to BIA Advisory Services.
A RetailWire webinar from last August discussed how the complexity of implementing infrastructure and integrating systems has kept retailers from taking advantage of location-based technology.
Getting opt-in from consumers also remains an obstacle. Google found Chrome telemetry data showed browsers either ignored or dismissed permission prompts by an average of 85 percent and another nine percent blocked them. Only seven percent allowed permission.
Asif Khan, founder of the Location Based Marketing Association (LBMA) and CEO of GroundLevel Insights, recently told CMSWire, “It comes down to the app or company wanting the data to be very clear in articulating to the consumer why they want it and what they are going to do with it.”
- The Consumer Trends Index 2023 – Marigold
- Personal Data: What Will Consumers Share for, and What Goes Overboard? – MarketingCharts
- Uber Launches Dedicated Advertising Division To Serve The World’s Biggest Brands – Uber
- Are retailers missing opportunities to leverage location-powered experiences? – RetailWire
- Nearly a third of all US media time will be on mobile this year – Insider Intelligence/eMarketer
- Mobile Advertising Expected to Surpass Direct Mail for the First Time, in BIA’s 2022 U.S. Local Advertising Forecast; As Economy Grows and Overall Spending Reaches $161.5B – BIA Advisory Services
- Permissions request chip – Google
- Where Does Location Tech Fit in CX Roadmap? – CMSWire
Discussion Questions
DISCUSSION QUESTIONS: Will location-based marketing eventually overcome the consumer perception that it is a creepy technology? What assurances or incentives may be necessary to encourage consumers to share their locations in real-time?
Poll
Loading …BrainTrust
Jeff Sward
Founding Partner, Merchandising Metrics
DeAnn Campbell
Head of Retail Insights, AAG Consulting Group
I don’t think location-based marketing will stop being creepy anytime soon. Unfortunately, there are too many forces working against it including the proliferation of telephone- and email-based campaigns that are bombarding phones and inboxes. There’s also the ongoing fight against social engineering threats which rightfully keep consumers on edge as cybercriminals become more and more adept at stealing money and sensitive data. However brand loyal consumers may be more trusting so a strategy targeting loyal customers might be more successful than a broader, spray and pray marketing strategy.
Location-based marketing itself isn’t creepy, but some of the ways marketers use it is — and consumers will continue to push back. Given the personal nature of a mobile device which tracks our every move, there is a heightened sensitivity to privacy related to mobile tracking. The opt-out rates are telling — consumers are far more concerned about their mobile data and how it’s being used. Ultimately, it comes down to trust in a brand. If I’m a happy Starbucks customer then I might be OK with allowing Starbucks to track my location, but most brands don’t have the depth of relationship with the consumers that warrants this type of connection.
Remember when targeted ads first hit the scene? And personalized marketing before that? All hyper-targeted efforts were considered creepy at first, then we all got used to them. The same thing will happen here.
Does it even work? I mean, you are walking along a street and up pops an ad for the coffee shop nearby? And you say “wow, I was not thinking about coffee–let’s go in!”
I tell you what is creepy — the fact that our phones are “listening” to us, because you talk about some product and suddenly that product is displayed on an ad on a page in your browser.
Location-based marketing isn’t inherently creepy but some marketers are ruining it for everyone. Either way, location-based marketing is a brand-by-brand proposition. If individual brands engender trust, they will be rewarded with more access.
If marketing is helpful and relevant, it becomes much less creepy. Timing is important too — notifications that are too prompt make people feel like they are being tracked. Wait a beat and it becomes less like an ambush and more like a welcome trail of breadcrumbs to help them find their way to something good.
Marketers have been trying to leverage location-based marketing since Videocart was first tested in grocery stores in the 1980s. Learn the lesson — nobody wants to be marketed to while they are shopping.
Location based ads are indeed creepy. Shades of Big Brother. But they are also good reminders that we are being tracked everywhere we go, all the time. That’s not going to change whether or not we get targeted ads. I’m hoping for some refined opt-in/opt-out technology that is easier to use. There is something about being tracked that just doesn’t feel right, regardless of how I feel about the brand or retailer who is doing the tracking. Who else is tracking me? Why? How anonymized is all this data?
No because it IS creepy. I swear, we’ve only discussed things in our house (not online) that have shown up in TV ads the next day. This is just the beginning — wait until ChatGPT starts writing movies and books and following you around telling you about interesting places to go on your vacation. We probably won’t even care after a while. I do think an entire cottage industry is going to spring up educating us on how to avoid the robots. But that’ll be for the 10 percent of people trying to get off the grid — the rest of us? We will be oblivious.
It will be a tough mountain to climb, but the retail brands that will be successful at it will invest in understanding data ethics, putting a custom program in place, and communicating their values to the public. I can’t think of any retailer off the top of my head that does this, but there is a food and cosmetics scanner app, Yuka, that communicated their policy and values in the app on-boarding process. Right away in the app tour, I understood their goals and how to achieve mine.
I imagine I am targeted as often as everyone else. However it never occurred to me as being “creepy.” Frankly I have never really noticed it, much less reacted to it. Maybe I just don’t pay attention?
The creepiness factor disappears when brands are very clear in stating and delivering a truly valuable offer to consumers at the right point in time.
It is certainly sensitive issue, having every move or even keystroke tracked. It reminds me of the resistance some had to getting listed in the phone book’s white pages. I think over time, people will overcome this issue if they start to see benefits and as the value of promotions increases to get more people to opt in. It could well be that the top 20 percent are the early adopters, the middle 60 percent say “maybe I will think about it,” and bottom 20 percent say “no way.”
The “value exchange economy” has given rise to customers trade personal and preference data in return for various benefits, as high as 93% respondents are willing to trade data, according to Marigold survey. Location-based marketing is part of the omnichannel strategy” Meeting customers where they are.” Retailers and brands must understand their customers actual want & need and build a long-lasting & trustworthy relationship through a meaningful loyalty program. Vast majority of people do use Google Maps to get directions for driving, public transit, walking, ride sharing, cycling, flight, or finding nearby locations. Being perceived as a trusted partner is paramount for retail brands to become successful with data-driven marketing strategy.
There’s a big difference, creepiness-wise, between generalized location info, and targeting someone in a grocery aisle. I don’t see it happening and companies are probably better off spending their time on less intrusive ideas.
Whether location-based marketing becomes truly mainstream and transcends the creepiness factor depends on how it is executed. And, probably every time “Siri”, “Alexa”, or any other smart device interrupts a conversation inappropriately, we as people back away from any hint of tracking by marketing technology.
The Mall of the Americas recently launched MOA Insiders, a rewards program designed to reward customers for shopping and other activity at the mall. Early versions of location-based mall rewards programs risked unwanted interruption by technology. Now we see the “availability” of location-based rewards but the customer is put in control of making contact. In MOA Insiders, customers have to open an app and scan QR codes to participate in the program.
There are significant hurdles in execution to be addressed for sure.
America was founded on the freedom of choice and there is something about tracking, even after getting permission, that seems to encroach on our personal freedoms. No one wants their personal information to be used, regardless of the intent, by some clandestine organization. Big brother is watching, recording and using our personal data is not something that most Americans will embrace or ever get used to.
This has been a debate for many years — the personal vs creepiness balance.
Organisations have to convince consumers that the benefit of sharing their location outweighs the “creepiness.”
In many ways, the ability to toggle this on and off easily for a given organisation could be a massive boon — for example allowing you to turn on when on the way to pick up an order or while out shopping in the hope of attaining a relevant offer. Options like “share for 1 hour” or until the end of the day could well be an approach — but much of this depends on design of the retailer’s app making it really easy to do this.