Imagine you own a cafÃ© and can reward your most loyal patrons with an e-coupon the moment they walk through your doors. Geo-targeted marketing technology is a new but rapidly evolving option for entrepreneurial businesses to connect with the ubiquitous yet often elusive online audience.
Brian Wong is the co-founder and CEO of Kiip, a San Francisco-based network for advertisers to reach consumers through mobile apps and games, with coupons or loyalty rewards for businesses in their immediate area. Kiip’s banners might appear in a mobile game at the moment a player completes a game level or on a fitness app when a runner logs a particular number of miles.
Kiip’s engagement rate for banners is a remarkable 18% to 22%. Wong says the reason is the strategy of well-timed rewards, connecting consumers with locally available brands when these consumers are happy and paying attention.
Social media giant Foursquare, whose app allows users to check in online when they’re visiting particular locations and become “mayor” when they visit often, now offers rewards to frequent visitors through merchant partnerships. Considering Foursquare has deals with more than 750,000 merchants and 20 million users, it’s well positioned to deliver relevant, location-based coupons to its users.
For smaller businesses wanting in on the action, cost isn’t necessarily a barrier. Kiip’s fees are based on the number of users who take a business up on its offer. When a user signs up for a reward, Kiip charges 90¢ to $3 per engagement. As long as the reward leads to additional purchases, increased loyalty or new customers, the rate could make sense for companies with smaller marketing budgets.
Users need to check into a location through Facebook, Twitter, Foursquare or an app before local merchants can find them and offer coupons or rewards. “Marketers can push text messages to consumers within a specific geographical area, but mobile is 100% opt in,” says Sandra Gudat, president and CEO of Lakewood, Colo.-based Customer Communications Group Inc.
Heading down this road also requires some technical expertise. “Companies would need to hire an agency or text-messaging platform provider to enable geo-location via text messaging,” advises Gudat, or you could invest in developing your own app and use its push-messaging capabilities.