What is Location-Based Marketing and Why Do You Need It?

February 22, 2021

Technology Trends

location based marketing

Location-based marketing allows companies to target consumers at a granular, more personalized level with online or offline messaging based on their physical location. Using location data, marketing teams are able to reach consumers based on selected qualifiers like proximity to a store, events happening in their region, and more. 

Location marketing has proven to be effective across customer lifecycles – from discovery and purchase to engagement and retention. When used properly, location-based marketing allows marketers to hone in on specific customer segments with targeted offers, while improving the customer experience for a population that increasingly values instant gratification. For example, location-based marketing may alert prospective customers that a product they have been thinking about buying is stocked in a nearby store, allowing them to pick it up right away. 

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What Types of Location-Based Marketing are Available Today?

location-based marketing

The growth of connected devices and IoT technologies over the past several years has driven a rise in location-based marketing. Today, it seems as though everything is connected to the internet. We have all been so accustomed to our phones, cars, watches, and even appliances being connected to the internet. These devices are often tracking their owner’s location, meaning there is an abundance of location and spatial data available. Insights derived from this data provide marketing teams with greater context into how to reach customers and improve their overall experience.

There are several different types of location-based marketing solutions marketers can use to  channel this location data into their marketing efforts: 


Based on a user’s location, geo-targeted marketing sends personalized messages. If a consumer has opted in to let an app access their location, they may get messages in the app or push notifications based on region or proximity to a store. 

Geotargeting works based on IP addresses. Every connected device has a unique IP address making them identifiable. From there, device IP addresses can be matched to country, postal code, etc. to determine where users are located. 

The key benefit of geo-targeting marketing is to increase customer experience through personalization. For example, marketers can target users based on the IP address of the device the search is conducted from to return information on coffee shops in the area.

Uber is another common example of geotargeting. When a user is traveling and touches down in a new city, uptown opening the app they will get a notification about available cars in that city.


Geofence marketing is proven to increase sales, engagement, and customer loyalty. Geofencing marketing is specific location-based advertisements that allow marketing teams to target their advertising and content delivery based on the targeted area. A “geofence” is the physical boundaries of a target location. It could be a specific city, a postal code, a county, or a kilometer range around a physical store location. It is also possible to configure multiple geofenced marketing channels for businesses with multiple locations. With geofencing marketing, marketers can resonate more strongly with the people living in those locations.

What makes Geofencing a valuable marketing tool?

In a geofencing marketing strategy, the marketing team develops ads and content tailored specifically to the consumers within the geofence. People living in Toronto have vastly different priorities and needs than people living in rural Saskatchewan, so developing content that appeals equally to both audiences would almost be pointless. 

Geofencing functions by targeting internet-capable devices, such as smartphones, within the specified geofenced area. When customers travel into these areas, they may receive alerts or notifications about your brand’s offers, limited-time promotions, and events where they can interact with your brand.

geo fencing technology essentially creates a virtual boundary that automatically targets consumers who cross the boundary into the geofenced area. Geofencing marketing is a powerful tool that allows marketing teams to deliver their brand’s messages to the right customers at the right times. 

In today’s marketplace, businesses already know they need to expand their digital footprint to separate them from their competitors. Casting too wide of a net, however, can backfire on your company if you aren’t careful about your marketing strategy. One way to ensure your net is where it should be is by leveraging Mapsted’s geolocation technology. 

Geofencing is the concept of targeting your online marketing efforts around a specific location. While most businesses operate online and sell to a wide range of customers across different locations, many still rely on their local consumer base to stay in business. If you’re developing a multichannel marketing strategy for your brands, consider the potential of geofencing marketing.

Lure customers without high acquisition cost

Geofencing marketing is an excellent strategy if you want to bring more local customers to your business. This method of marketing focuses on a specific location instead of trying to appeal to a wider audience online. 

Geofencing marketing can be implemented in many ways:

  • Companies that travel for marketing events and industry conferences can set up geofences around future stops to establish brand awareness in advance of their local appearances
  • Law firms and healthcare providers can geofence their advertising efforts to specific service areas 
  • Business owners could set up a geofence around their competitor’s location to entice them with a more attractive offer.
  • Local businesses can set up geofences in the area around their stores to target the closest potential customers

These are just a few examples of the possible applications for geofencing marketing that can have a positive impact on your business. However, much like any other new product or service for your business, we suggest doing your own research to determine the best location-based solutions for your business.

Geofencing is a recipe for success

The need to leverage geofencing cannot be overstated. Though it is still relatively new, the rate of successful companies that have achieved it is immeasurable. 

A study conducted by David Erickson shows that consumers love receiving location-specific offers right on their phones, due to their location relevance and interest. 

Benefits of geofencing mobile marketing you don’t want to miss: 

1. It Serves as an Ads Portal

This is obtained when potential customers are close to your store and you’re notified of their presence. Sending your new products to them, free giveaways, and discounts, will definitely get them to consider your store.

2. You can Create Precisely Targeted High-Quality Content More Easily

Producing high-quality content will always be imperative when trying to improve your marketing success. When you cast a very wide geographical net for your content, it is automatically less likely to resonate with so many different audiences, from so many different locations. Geofencing marketing encourages more precisely aimed content.

3. Geofencing Marketing is Cheap and Effective

If your marketing team isn’t using Mapsted’s location-based marketing solution, then prices may be higher. But, with Mapsted’s location-based marketing solutions, businesses don’t have to worry about spending money on additional marketing hardware such as Bluetooth beacons or Wi-Fi routers. 

4. Integrate your Offline Business into your Online Presence

With geofencing, you can notify passersby to look you up on social media for better customer engagement. Essentially, it serves as your gateway to your social media and internet identity.

5. It proves real-time analytics

Good marketing requires TWO ways to communicate between customers and marketers. Geofencing makes it a lot easier and more effective because it notifies you as soon as a customer enters your marketing region. 

6. Geofencing marketing allows for timely content delivery

Successful marketing teams use the best indoor positioning systems which are equipped with geofencing technology. It makes it easier to get the word out to the customers most likely to take advantage of limited-time offers at your brick-and-mortar store. 

7. A geofencing marketing strategy can enable your brand to deliver more personalized experiences to customers

The data gathered from a geofencing marketing campaign can help your marketing team develop content and promotions that align more closely with your targeted customers’ preferences, needs, goals, and interests. 


Beacons are connected devices that use Bluetooth or WiFi to connect with predetermined applications that are operating within range of the beacon. Beacons work well to target existing customers within a small geographic area.

Beaconing works by sending a signal to your device that prompts a server to send content to your device. This could be a push notification, email, etc. For example, say a sports stadium encourages attendees to download their app for ticketing, concessions, etc. The venue would set up beacons to recognize when a device with that application installed is in range. 

Unlike most hyperlocal marketing solutions, users have to opt-in and have Bluetooth on in order for them to take advantage of this. However, this medium of location-based targeting does give you a more direct communication channel with customers.

Organizations can track users indoors in a more precise manner. This not only allows for more specific targeting but helps marketers get a more complete understanding of customer behavior. Also, users don’t need to be online in order to receive these notifications.

Mobile Targeting

mobile targeting

Mobile targeting occurs when marketers target consumers with ads on their mobile devices. Because consumers typically want to avoid advertising, marketers aim to make their ads context-specific, which can be based on time, device, or location.

Mobile targeting works when you create segments in your mobile ad platform that define who you want to target and what qualifications you want to target them by (when they enter a certain area or are in proximity of your store). 

This form of location-based mobile marketing allows marketers to target users directly on their devices for a more personalized connection. Marketers often see greater returns on ad spending using a more targeted approach.

An example of mobile targeting is already visible on social media. Social media ads that target based on location data can help encourage visits to a store, restaurant, or event nearby.


Geo-conquesting uses location data to divert potential customers away from the competition. For example, car dealerships might create a boundary around a competitor’s lot. When a target consumer comes within that boundary, they will receive offers encouraging visits to the other dealer.

Geo-conquesting works by using GPS technology to target users in the proximity of your competition. Companies can win market share and new customers by encouraging users they know are already shopping for a product in the space to purchase from them over a competitor.

Burger King is the perfect example of this. They used geo-conquesting to divert McDonald’s customers back to their own restaurants. How? By simply asking consumers to download the Burger King app. When hungry customers came within 600 feet of Mcdonald’s, the Burger King app sent a promotion for a 1-cent whopper and navigated customers to their nearest franchise. 

Benefits of Location-Based Marketing 

Location based marketing

1. Improve Revenue with Relevant and Personalized Marketing Strategies

Businesses often strive to make their marketing and advertising campaigns as appealing as possible, yet the stats say otherwise. According to a study on mobile marketing, 40% of customers who receive messages from businesses feel that communication was neither useful nor relevant. This is where location-based marketing can be a game-changer.

Location marketing amplifies the marketing game by leveraging location data provided by customers to ensure they are only being sent relevant information at all times. Google Local Inventory Ads might be the most well-known example of location-based marketing in e-commerce-but there are other possibilities. 

For example, a customer visits a cafe and receives a notification with an exciting offer. The cafe owner can also make use of dynamic QR Codes that can be created using an online QR Code generator in no time, to credit extra discounts, say, 15% off on their favorite later post-scanning. 

It is much more likely that the customer will consider such an offer that is not just relevant, but also timely and offers them an incentive. By ensuring that these two features are included in your campaigns, location-based marketing leads to amplified customer engagement, boosting sales to your business. 

2. Increase Immediate Foot Traffic

Location-based marketing can drive foot traffic for local businesses such as retail stores or food services, by informing users in their market of proximity and enticing them with an offer.

3. Create a Better User Experience 

By targeting customers when they are likely to need your services most, you can provide them with a better user experience.

As with all marketing investments, evaluate your customer base and impactful external factors to understand how these location-based marketing tactics will affect ROI, before committing ad spending.

Frequently Asked Questions

Q1. What is the perfect example of location-based marketing?

Ans. Location-based marketing entails anticipating the user’s location to serve personalized and relevant results. The AI uses available data to match results that are relevant to the context. A user searching for a café on a search engine will see results closest to their physical location.

Q2. What advantages do location-based marketing offer?

Ans. Users benefit from decluttered results from location-based marketing. It restricts their options to relevant results based on their physical location, allowing users to make quick decisions rather than repeating search queries or digging deeper into results.

Q3. What are location-based marketing types?

Ans. The four known types of location marketing are:

  • Proximity marketing
  • Geofencing
  • Geoconquesting
  • Geotargeting
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