Contextual marketing, Location Intelligence

IGNITING CUSTOMER ENGAGEMENT

CONTEXTUAL MARKETING 2014: The Power of Location Intelligence Data

Bill Borrelle SVP, Brand Strategy and Integrated Marketing Communications

Pitney Bowes Inc.

October 27, 2014

ROAD MAP FOR “LOCATION INTELLIGENCE 101”

!• The Evolution of “Contextual Marketing” !

• The Emergence of Location Data !

• 3 Primary Applications of Location Data in Marketing !

• Hyper-Targeted Messages and Offers to Consumers

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THE AGE OF THE LEFT BRAIN, IN MARKETING

MARKETING REQUIRES ACTIVE AND PRODUCTIVE RIGHT BRAINS AND LEFT BRAINS

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For our creativity, imagination and intuition

Right

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Using our gut to make decisions


Right

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Right

Left

For logic, analysis and computation

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Right

Left

For logic, analysis and computation

Using data to make decisions

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THE EVOLUTION OF “CONTEXTUAL MARKETING”

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Direct Marketing is inherently contextual – there’s always some context to your message.

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Direct Marketing is inherently contextual – there’s always some context to your message.

If not, there should be.

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HARVARD BUSINESS REVIEW, 2000

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“Companies that practice contextual marketing should be guided by the following imperative:

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“Companies that practice contextual marketing should be guided by the following imperative:

Don’t try to bring the customer to a website, bring the message directly to the

customer at the point of need.

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2014 DEFINITION

Contextual Marketing is a form of targeted messaging where the content of

the message is directly relevant to…

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2014 DEFINITION

Contextual Marketing is a form of targeted messaging where the content of

the message is directly relevant to…

the content of the web page the user is viewing.

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CONTEXTUAL PRINT ADVERTISING

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ILLUSTRATIVE EXAMPLE

CONTEXTUAL PRINT ADVERTISING

… directly relevant to the magazine title

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CONTEXTUAL RELATIONSHIP MARKETING

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CONTEXTUAL RELATIONSHIP MARKETING

… directly relevant to customer’s individual relationship

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CONTEXTUAL ONLINE ADVERTISING

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CONTEXTUAL ONLINE ADVERTISING

… directly relevant to online content

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CONTEXTUAL SEM ADVERTISING

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CONTEXTUAL SEM ADVERTISING

… directly relevant to search terms

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BEHAVIORALLY CONTEXTUAL ONLINE ADVERTISING

9:00am

9:15am

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BEHAVIORALLY CONTEXTUAL ONLINE ADVERTISING

9:00am

9:15am

… directly relevant to online behavior

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CONTEXTUAL SOCIAL MEDIA ADVERTISING

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CONTEXTUAL SOCIAL MEDIA ADVERTISING

… directly relevant to social conversations

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CONTEXTUAL MESSAGING TO PROGRAMMING

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CONTEXTUAL MESSAGING TO PROGRAMMING

... directly relevant to programming

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What if the marketing message is contextual to your customer’s location?

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CITY/ZIP

Local Offers

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CITY/ZIP

Local Offers

MALL

Proximity offers

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CITY/ZIP

Local Offers

MALL

Proximity offers

NEIGHBORHOODS

Proximity offers

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CITY/ZIP

Local Offers

MALL

Proximity offers

NEIGHBORHOODS

Proximity offers

STORE

In store promotions /auto checkin

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LOCATION-BASED MESSAGING

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... directly relevant to your customer’s location

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WHAT DOES LOCATION-BASED MARKETING CREATE?

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RELEVANCE

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RESPONSE

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REVENUE

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RESULTS

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LOCATION, LOCATION, LOCATION: THE EMERGENCE OF LOCATION DATA

LOCATION, LOCATION, LOCATION

Direct Marketers understand the value of location.

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HOME LOCATION = VALUABLE DEMOGRAPHICS

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HOME LOCATION = IMPACTFUL DELIVERY CHANNEL

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LOCATION 2014

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LOCATION 2014

Why has location-based marketing emerged now?

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LOCATION 2014

Why has location-based marketing emerged now?

What has changed?

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1. SMARTPHONE PENETRATION

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CELL PHONE TRIANGULATION / GPS

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CELL PHONE TRIANGULATION / GPS

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Coordinate -105.248599, 40.054337

Parcel Boundaries

Points of Interest

World Boundaries

In-Building Maps

Building Footprints

Base Map

Thematic Layers Data within the Firewall

2. AVAILABILITY OF LAYERS OF LOCATION DATA

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There’s location.

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There’s location.

And then there’s location intelligence.

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3. CONSUMERS OPTING IN TO SHARE LOCATION

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3. CONSUMERS OPTING IN TO SHARE LOCATION

74% of consumers with smartphones use location-

based services

Source: Pew Research Internet Project, 9/2013

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APP PROLIFERATION

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TRANSPARENCY AND THE POWER TO CHOOSE

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TRANSPARENCY AND THE POWER TO CHOOSE

When we give our customers, with fulltransparency, the option to choose to

share their location information inexchange for better service or a price

advantage, the majority will say, ‘YES.’

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WHERE MOBILE USERS ARE WHEN THEY GO ONLINE

UNSHIFTED SHIFTED

IN STORES (WHILE SHOPPING) 41% 78%

RESTAURANT/COFFEE SHOP 37% 73%

WHILE TRAVELING FOR BUSINESS OR LEISURE (AIRPORT, HOTEL)

37% 72%

Source: Forrester Research: “The Mobile Mindshift Index”

Where do you use your phone to access the internet?

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3 PRIMARY APPLICATIONS OF LOCATION DATA IN MARKETING

3 PRIMARY APPLICATIONS OF LOCATION DATA IN MARKETING

1. Using location to present hyper-targeted messages and offers to consumers

2. Building psychographic and demographic profiles

3. Aggregate and store population location data for market research and future campaigns

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1. USING LOCATION TO PRESENT HYPER-TARGETED MESSAGES AND OFFERS TO CONSUMERS

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HOW IT WORKS: PUSH AND PULL

• O/B marketing

• Cross a boundary• Customer inquiry

• Location data provides solution

PUSH PULL

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2. BUILDING PSYCHOGRAPHIC AND DEMOGRAPHIC PROFILES

• Location sharing presents unique insight into customers

• Location data can reveal interesting habits and patterns in consumer behavior

• We can create a master database of consumer behavior, all unlocked by a consumer’s

location-based activities

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32 yr old, middle class single male. Rents a two bedroom townhome in a urban professional neighborhood in Boulder, CO. Uses public transportation and spends lunch hours at the gym. Frequents nightlife hotspots on Wednesdays. Enjoys ethnic foods. Visits mountains on weekends. Air travel 20% of the time. Outdoor, active lifestyle pursuits & interests.

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THE RESULT: VALUABLE BEHAVIOR DATA IN REAL TIME

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3. AGGREGATE AND STORE POPULATION LOCATION DATA FOR MARKET RESEARCH AND FUTURE CAMPAIGNS

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• Profile mass audience

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• Build regional profiles

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• Build regional profiles

• % of customers who _______

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WOW!

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HOW?

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LOCATION INTELLIGENCE 101

GEOGRAPHIC INFORMATION SYSTEM (GIS)A computerized data management system used to capture, store, and manage, retrieve, analyze, and display spatial information.

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GEOGRAPHIC INFORMATION SYSTEM (GIS)

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GEOCODINGThe mapping of a named location (such as an address) to specific latitude and longitude coordinates.

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POI GEOCODING PRECISION – USING MULTIPLE DATA SOURCES TO IMPROVE THE QUALITY

Low precision Menards store location

Precise Menard store location by combining two extra geocoding data sources and social data verification

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THE RISK OF GETTING IT WRONG

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REVERSE GEOCODINGPinpointing a location from a signal from a GPS-enabled device (smartphone).

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PINPOINT A USER AT STORE OR MALL LEVEL

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Traditional: You are within the target radius of Starbucks

Improved Solution: You are: In Macy’s parking lot You are now an attractive target for Starbucks

6 lane highway 6 lane highway

GEOFENCINGA location-based mobile service that lets marketers send messages to smartphone users when they enter a defined geographic area, such as a shopping mall or a store.

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CREATE GEO-FENCE

DETECT USER CROSSING THE FENCE

GEOFENCING SERVICE

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CREATE GEO-FENCE

DETECT USER CROSSING THE FENCE

GEOFENCING SERVICE

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INDOOR AND VENUE GEOFENCING

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BOUNDARY-BASED GEOFENCE CAN PROVIDE ADVANCED GEOFENCE SOLUTIONS

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RADIUS-BASED MARKET SOLUTIONS

Has problems of: • “cross river” • “false alarm”


BOUNDARY-BASED GEOFENCE

• Store boundary • Mall boundary • Neighborhood boundary

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TARGET AREA-BASED GEOFENCE

Considering factors of: • Road network & traffic • Retail trade area modeling • Consumer demo. & social data

BOUNDARY-BASED GEOFENCE

• Store boundary • Mall boundary • Neighborhood boundary

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A radius doesn’t account for barriers and is too general to provide specific value. It can provide for a frustrating experience.

“RADIUS” ≠ OPTIMAL CONSUMER EXPERIENCE

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LOCATION RELEVANT TRADE AREA

TRADITIONAL: You are near: Gap, Macy’s, Nordstrom….

IMPROVED SOLUTION: You are: in Macy’s parking lot

and near: Nordstrom,Gap

Trade Area Plotting – an irregular shape around a location, that provides areas of interest to a particular person or situation

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LOCATION-BASED SERVICES (LBS)Location-Based Services are services offered through a mobile phone and take into account the device’s geographical location.

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A NOTE ON “DISTANCE”There are different ways of figuring out the distance between two points, with the most basic being the “straight line” (also known as Euclidean) distance. However, there are potentially many different types of distance between two points.

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“STRAIGHT LINE” VS. “REAL LIFE”

Location on a map Two locations and distance as the crow flies

Proper distance with directions

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HYPER-TARGETED MESSAGES AND OFFERS TO CONSUMERS

WHAT IT’S NOT

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HOW IT WORKS

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HOW IT WORKS

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HOW IT WORKS

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HOW IT WORKS

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HOW IT WORKS

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HOW IT WORKS

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HOW IT WORKS

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HOW IT WORKS

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WHO’S DOING IT?

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FINANCIAL SERVICES: EXAMPLES

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• If a consumer walks into a Century 21 office, the app detects the store category

“realtor” and app will display home loans mortgage information



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• If a consumer walks into a Mall, the app detects that and displays a list of stores that

will give a discount if the consumer using the bank’s debit card there





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• If a consumer parks his/her car in the parking lot of CVS, the app detects that and

display items in his/her shopping lists that he/she can buy at a discount with the

bank’s credit card

• If a consumer walks into a Mall, the app detects that and displays a list of stores that

will give a discount if the consumer using the bank’s debit card there




GETTING STARTED

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GETTING STARTED

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Ask yourself, for your business situation:

GETTING STARTED

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Does location matter?

GETTING STARTED

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Does location matter?

How can you add value to your customer relationship with location data?

LESTER’S VIEW ONLOCATION INTELLIGENCE

19 DIRECT MARKETING PRINCIPLES

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HIGHLY RELEVANT TO LOCATION-BASED MARKETING

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1. Communicate with Each Customer or Prospect as an Audience of One

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2. Be Accessible to Your Customers, Through All Channels

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2. Be Accessible to Your Customers, Through All Channels

3. You are What You Know – Collect Data that can Become Customer Knowledge

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KEY TAKEAWAYS

KEY TAKEAWAYS

1. There’s location, and there’s location intelligence. !

2. When we give our customers, with full transparency, the option to choose to share their location information in exchange for better service or a price advantage, the majority will say, ‘YES.’ !

3. Location data is awesome

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“DATA IS AWESOME”

THANK YOU

CONTACT INFORMATION

BILL BORRELLE SVP, Brand Strategy and Integrated Marketing Communications

Pitney Bowes Inc.

!EMAIL [email protected]

!TWITTER @BillBorrelle

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mailto:[email protected]

Business

Contextual marketing, Location Intelligence