Believe the Hype: The Pragmatic Value of Location-Based Analytics, Audiences, and Attribution

After 25 years of framing technologies by level of maturity and adoption, the Gartner Hype Cycle has finally placed location intelligence for marketing where it belongs — in the trough of disillusionment. Sounds like a lousy place to be, but it’s actually the opposite. Why? The trough of disillusionment is the stage right before the slope of enlightenment. Let me back up and explain.

If you’ve never heard of the Gartner Hype Cycle, you’re in luck. This article teaches you how to use it as a tool to stay ahead of your competition. The Hype Cycle, introduced in 1995 as a way to gauge the commercial usefulness of a given technology, has five phases:

  1. Technology Trigger: Think of this as a potential technology breakthrough. Early proofs-of-concept generate publicity and lots of questions. No usable product exists in this phase, and commercial viability is far, far away. This is where flying cars and smart dust lives. 
  2. Peak of Inflated Expectations — Prototypes produce a handful of success stories, but they’re spotty and accompanied by many failures. Early adopters take action to ferret out use cases and find value. Home to blockchain and autonomous mobile robots. 
  3. Trough of Disillusionment — Users are digging in and experimenting in this phase. Interest and enthusiasm wane as some implementations fail to deliver lasting value. The best vendors continue to bring on new customers because they innovate and improve. Location data lives here. So does the smart home.
  4. Slope of Enlightenment —In this phase, benefits of the technology crystallize and become widely understood. Products continue to improve, and market leaders emerge.
  5. Plateau of Productivity — Mainstream adoption is in full swing. Use cases are widely proven. The technology is being adopted even by laggards in this phase. Think marketing automation, speech recognition, and 3D printing.

Gartner puts location intelligence for marketing in that third phase because ad agencies and brands are experimenting heavily with location data, sometimes seeing a return but too often not. Marketers are not seeing a consistent and reliable ROI from their implementations of location data, in part because vendors tend to overstate its real value.

With the substantial privacy requirements of CCPA and location services changes introduced with iOS 13, digital strategists are looking much harder at what location data can and cannot do. This will inevitably lead to improved execution and better ROI (aka the slope of enlightenment). But before the marketing community gets to that point, there’s more experimenting and scrutinizing to be done.

In fact, the ideal time to add a technology to the marketing mix is when it’s in the trough of disillusionment. Counterintuitive as this may seem, it’s the phase when the savvy user is most likely to achieve competitive advantage since the technology is not yet widely adopted. Once a technology hits enlightenment and the plateau of productivity, everyone is using it. Employing it to achieve differentiation, therefore, becomes more arduous. So, this is precisely the time to evaluate solutions and select the one that best suits your needs. 

This begs the question: What are some of the ways location data and location-based marketing are being leveraged most effectively?

The most expedient way to ensure ROI from location data is by geotargeting the people who have visited your brick-and-mortar retail locations. Marketers can encourage repeat purchases and greater loyalty by advertising to the people who are most likely to come to their stores — those who have already been. While the repeat purchase rate will vary depending on industry, number of locations, and other factors, a good range to fall within is 20-40%. Location data is the means by which you can get a baseline and improve on this metric.

Another strong way to use location data is for geoconquesting. Marketers can use location data to identify shoppers who visit their competitors’ locations and target them with deals and special offers. If you’re a digital marketer for, say, KFC, you’re going to want to advertise to everyone who eats at Popeye’s, Zaxby’s, Bojangles, Church’s, Raising Cane’s, and Chick-Fil-A. Growing market share in competitive categories is among the most compelling use cases for location data.

With nearly 90% of marketers using location data in campaigns, one might expect the technology to already be on the plateau of productivity. But in reality, location data is in its adolescence and will continue to mature. Now is the time for digital marketers to develop best practices and repeatability.

Dan Dillon is the vice president of marketing at Reveal Mobile, a provider of location-based analytics, audiences and attribution software. During his 15+ year career as a marketing executive, he has led every aspect of marketing — from traditional to digital and inbound to outbound. Dan and Reveal Mobile are based in Raleigh, NC.

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