SXSW 2010: Location-based Marketing and Advertising: Targeting the Mobile Consumer

Navteq and their parent company Nokia believe that LBS or Location Based Services are going to be a $7 billion dollar industry by 2013. This is due to an increase of mobile connected devices and their ability to receive targeted advertisements when they are near a specific location.

Navteq currently has 80 people globally in their sales force, working with mobile operators as well as smaller application developers to help sell the data that they collect about locations.  They warehouse this information by deploying “data collection trucks” which have high definition cameras mounted on the rooftop and drive most all of the major cities roads .  These cameras take photos and collect other data such as elevation as they drive through the streets.  Company spokesman and presenter Shawn Gunn said future unknown applications will leverage this.  To seed such innovation, Navteq has a location based challenge that they run annually and several augmented reality projects are frequently presented from that.

When asked how Navteq plans to tap into virtual reality they stated that a 3D advertisement may be more compelling than a traditional text or flash ad.  Today advertisements are re focused on being near a retail location and receiving an offer for said location.

For example, the Jack in the Box chain tested this theory by using the mobile check-in application Loopt to send special coupon offers for curly fries and paid a $20 CPM for displaying the advertisement. Users were not specifically looking for an offer or searching for french fries when using the Loopt app, but the click through rate to redeem the offer was deemed a success.

More location based advertising examples come from the AAA application where merchant partners are pushed to members of the service. Additionally, the Kozy app allows users to present a coupon code that appears on the screen of their smartphone to a merchant at a checkout. Progressive insurance is another service which is using the Navteq service, specifically a by presenting users a “click to call ad” within an application that uses the Navteq location service.

Most traditional online advertising CPMs are 1 to 10 dollars with a 1% click through rate.  With Navteq location data they are able to show a more relevant advertisement and they typically see a 2% click through rate due to increased relevancy to the end user being advertised to.

The future of marketing depends on demographic along with profile data, and location is paramount to this type of data.  With that, developers must walk a fine line of privacy and use the location aware content creatively with an advertisement around it.

Dave Mathews @ggdm is an inventor, broadcaster and consultant who has helped such companies as RadioShack, Sling Media and boxee. You can find more of his content at www.davemathews.com.