Case Study of Location-based marketing and advertising

1.    Two different approaches to capturing consumer interest are described in this case. How do the Placecast and Adlocal approaches differ?

Placecast approaches to capturing consumer interest using O2 system. O2 custermors opt into the system by providing their age, gender and interest. When customers are near an outlet that matches their profile, they receive an SMS message for money off or other special offers. The service is based on a technology called “geofencing”. Targeted marketing reduces the likelihood of relevant marketing messages being lost in “junk mail” that is, customers get texts that they know are probably relevant. According to research carried out by placecast on shopalerts users, most customers opened the alerts immediately and 65 percent made a purchace as a resykt if receiving the text (interestingly, not always a purchase mentioned in the text). O2 had to resolve several issues with this type of marketing: opt in and opt out,  age (not available to customer younger than age 16), data sharing, frequency (one message per day) and device (works on any mobile phone)

Adlocal (now part of yahoo Japan) has the largest share of Japan’s location-based advertising market (valued at US$1b) and such technology can make sure that the advertising that user receives is based not necessarily on who they are but where there are. Advertisers create their own advertisement using a wizard and then specify the desired locations and dates to display them (for special promotions, discount, etc).

2.       Do you think that targeted advertising is better than a blanket approach? What is the difference for the advertiser? For the consumer?

Yes it is better, targeted advertising at the right consumer at the right time when they are in the right location to make a purchase. When consumers are near an outlet that matches their profile, they can do the transaction immediately.

 

3.       The information from the comScore survey did not differentiate between age groups, only country. Do you think there are differences in behaviour among different age groups that would maked location-based marketing better for one group than another?

I agree with the information from the comscore suvey that there is no differential between age groups but only country.

4.       Think of business in your area that might benefit from joining the O2 scheme. What could they offer?

They could offer frequency of messages with the scheme limite to one per day and devices that O2 scheme works on any mobile phone. It is not necessary to download an app (i.e., a smartphone is not require) and it does not effect the device’s battery life.