1. For Interactive Marketing Professionals April 12, 2012 | Updated: July 3, 2012
Under The Hood Of Mobile Marketing: Location-
Based Marketing
Making Marketing Content Relevant To Where People Are
by Anthony Mullen
with David Truog and James McDavid
Why Read This Report
As marketers step up their mobile marketing efforts, Forrester clients are asking more and more questions
about it, and one of the most important facets of the opportunity is location-based marketing. This short
question-and-answer report highlights the opportunity — which includes but goes beyond mobile — and
why it matters for interactive marketers, cites examples of how location-based marketing has been used to
date, describes how the key components work and who the major players are, and recommends what you
should do about it.
Questions
1. What is location-based marketing (LBM)?
2. Why should I care about LBM?
3. How have marketers used LBM in campaigns to date?
4. How do consumer technologies enable LBM?
5. How can LBM campaigns know what’s in a consumer’s vicinity?
6. Which vendors and services enable LBM?
7. How should marketers get started testing LBM?
8. How will LBM evolve over the next 24 to 36 months?
Location-Based marketing: What Interactive Marketers Need To Know
Forrester believes that the three key principles for mobile marketing success are simplicity, immediacy,
and context.1 And the most important component of context for marketing today is location. Welcome to
location-based marketing.
1. What is location-based marketing (LBM)?
Forrester defines location-based marketing as:
Real-time marketing interactions that combine precise knowledge about where a customer is now with
detailed information about what’s nearby.
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2. For Interactive Marketing Professionals
Under The Hood Of Mobile Marketing: Location-Based Marketing 2
2. Why should I care about LBM?
LBM lets interactive marketers engage consumers more effectively and profitably because knowing
where a person is and what they’re near lets you customize your interactions with them to make
them more relevant and actionable.
3. How have marketers used LBM in campaigns to date?
Marketers have started using LBM successfully in a variety of ways. The most widespread uses have
been for location-targeted mobile search, but some marketers are pushing the envelope — for example:
■ Mini amped up consumers’ attention to a new car model with a location-based game. Mini
launched its new Countryman car with a campaign called “Getaway” in which iPhone users
in Stockholm were invited to hunt for a virtual Mini that had been “hidden” somewhere in the
city. Once any participant found and claimed the virtual car, it could be snatched away by any
other player within 50 meters of the player who first found it, and then from that second person,
and so on. The first participant to manage to keep the car for seven days received a real Mini
Countryman car.
■ Hotel Tonight launched a new hotel-booking app through NFC and QR tags in signage.
The Hotel Tonight app lets travelers with an iPhone or Android phone find and book nearby
hotels that have unsold inventory they’re willing to discount starting at noon on the day of the
booking. Amobee, the agency that Hotel Tonight hired to create the app, launched the app by
publicizing it via RMG Networks’ digital out-of-home video screens, each of which was outfitted
with a Blue Bite mTag — a placard that combines both a near field communication (NFC) tag
and a QR code (for the NFC-deprived).2 The RMG Networks screens were placed in eight
major US airports and hundreds of busy café locations across the US. Consumers alerted to the
campaign via RMG’s signage used their phones to interact with the mTag to download the Hotel
Tonight app.3
■ AT&T enabled brands to send offers to consumers near their retail locations. AT&T provides
marketers with a service called ShopAlerts that lets them extend offers to shoppers with AT&T
mobile phones within geofences — specific geographical perimeters the marketer specifies, such
as within a certain radius of any of their retail locations. Consumers who opt in to the service
receive coupons, rewards, or other offers from brands that have signed on with AT&T for the
service, including HP, JetBlue, Kmart, Nature’s Recipe, and SC Johnson.
4. How do consumer technologies enable LBM?
To market to consumers in real time based on where they are, you need to get that information from
the devices they use. And an increasing number of them are location-aware based on a variety of
sources. In fact, although location-awareness has spread through mobile devices, it now is available
in many devices that are not in fact mobile.
© 2012, Forrester Research, Inc. Reproduction Prohibited April 12, 2012 | Updated: July 3, 2012

3. For Interactive Marketing Professionals
Under The Hood Of Mobile Marketing: Location-Based Marketing 3
For many, the source is GPS, which is more and more commonly built in to consumer electronics
such as smartphones, car navigation systems, still and video cameras, and even some wristwatches.
Some devices that use Wi-Fi determine their location by measuring the relative strength of multiple
nearby Wi-Fi signals, reporting those to an online service that has a record of each signal’s source
location, and triangulates between them to report back to the device its location.
Newer technologies like static NFC tags or QR codes attached to signage or store shelves, for example,
enable much greater precision and therefore more relevant messaging. High precision in retail
locations is possible using technologies for measuring, tracking, and analyzing consumers’ locations
and movements from vendors such as Euclid Dynamics, Shopkick, PointInside, and BeeMedia.
Check-ins via geosocial services like foursquare, Gowalla (now part of Facebook), and Scvngr may
be less precise, since consumers can check in to a location they’re near but not actually in However,
a check-in does indicate not only proximity but also awareness and interest — which can be just as
relevant or more so, for marketing purposes.
Last but not least, the rough location of a static device like a desktop computer, a connected TV, or
a gaming console can usually be derived from its IP address, though some restrictions apply to how
marketers may use the information.
5. How can LBM campaigns know what’s in a consumer’s vicinity?
Knowing a consumer’s latitude and longitude is all fine and good, so you can compare it to a list of
your retail locations. But knowing more — like local demographics, purchasing patterns, weather, and
social behavior — helps you make interactions more relevant. Where can you get that information?
From big data vendors like Infochimps, whose “Geo APIs” aggregate data from dozens of feeds
including American Community Survey, foursquare, Wikipedia, Zillow, and even weather sources.
6. Which vendors and services enable LBM?
The leading campaign management vendors — like Aprimo, IBM, Oracle, and SAS — offer limited
support for location-centric campaigns with capability mostly provided via third-party integrations.
Most of the major enterprise web analytics tools are working on richer location-based views of
performance. A few lead the pack, such as Adobe (Omniture), which has a good pedigree in mobile,
from creative to deployment, and its popular counterpart, WebTrends.
However, the majority of location-centric campaign solutions are coming from a crop of innovative
smaller vendors that have sprung up, offering marketers a mix of campaign management, analytics,
and data aggregation. We expect the bigger players to play catch-up in the next 12 to 24 months, but
for now the only — and therefore best — solutions come from the upstart innovators, which include:
© 2012, Forrester Research, Inc. Reproduction Prohibited April 12, 2012 | Updated: July 3, 2012

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Under The Hood Of Mobile Marketing: Location-Based Marketing 4
■ Maps: Accurate, well-designed maps are the foundation on which effective LBM rests. Key
players in this space include Google, Apple, Esri, and Navteq.
■ Geofencing tools: These let interactive marketers map out the physical areas where they wish to
know about potential customers’ presence, such as near their retail locations. They include tools
from Google Maps, Location Labs, Esri, and Geoloqi.
■ Location-based social networks: These services enable check-ins and presence sensing, used
in tandem with social graphs. They include foursquare, Loopt (Green Dot), Urbanspoon,
BrightKite, Google Latitude, and Scvngr. Other social networks and services with location data
include Gowalla (now part of Facebook) and Flickr.
■ Tools for static uses of 2D bar codes and tags: Campaigns based on static tags whose exact
location is known often work in partnership with out-of-home media networks. The most
significant players in this space include Proxama, BlueBite, Tapit, and Microsoft Tag.
■ Geodata: These services provide metadata focused around locations such as point-of-interest
(POI) and area demographics. Vendors include InfoChimps, Yellow Pages Group (YellowApi),
Simplegeo (Urban Airship), Factual, Quova (Neustar IP Intelligence), Esri, and Skyhook.
■ Location-centric loyalty solutions: Development solutions are provided by companies such as
Shopkick and Topguest while consumer-centric offers include Living Social and Voucher Cloud.
■ Location analytics: GeoIQ, Geodelic with WebTrends Mobile, Titanium Geo (FortiusOne and
Appcelerator), Geoloqi, VenueLabs, and Nearbuy.
■ Mixed solutions providing campaign, analytics, and other location features: GeoToko,
MomentFeed, GoodEatsFor.Me, and PlacePunch.
7. How should marketers get started testing LBM?
In 2012 you should experiment with the upstarts in the location space by conducting pilots. But stay
married to your enterprise campaign management and analytics providers, because they’ll support
LBM too, and in a more integrated way.4 Forrester recommends that marketers interested in LBM:
■ Ensure presence of your brand’s locations and offers within the popular geosocial services like
foursquare and Gowalla.5
■ Address privacy concerns, the major hurdle for consumers adopting LBS, by presenting a clear
policy and value exchange.6
■ Run trials before undertaking any major integration with your customer relationship
management (CRM) and marketing management systems.
© 2012, Forrester Research, Inc. Reproduction Prohibited April 12, 2012 | Updated: July 3, 2012

5. For Interactive Marketing Professionals
Under The Hood Of Mobile Marketing: Location-Based Marketing 5
■ Build check-ins into your reward programs and offer dynamic local offers to customers in-store
with well-targeted mobile landing pages.7
■ Compare the data you gather about customers’ locations over time against their CRM records at
all touchpoints in the life cycle to analyze their behavior and predict what offers they’re likely to
respond to.
■ Work with your developers — whether at an agency or in-house — to make sure they reduce the
complexity of integrating with commercial location-based services like the foursquare API by
tapping aggregators like Infochimps if you’re building a custom platform, or choosing a location
campaign management provider with built-in API integrations.
8. How will LBM evolve over the next 24 to 36 months?
Forrester believes that campaign management and analytics tools will rush to plug their gaps in LBM.
Facebook and Google will increase integration with Gowalla and Latitude, respectively, to provide a
more coherent service that will make it hard for smaller players like foursquare to compete. They’ll
also increasingly include location about every event in the timeline instead of limiting it to check-ins.
The most exciting campaigns in 2012 will use LBM in novel and engaging ways.
Companies Interviewed For This Report Revolution Analytics
Proxama SapientNitro
Endnotes
1
For a detailed breakdown of the key principles of mobile marketing see the February 7, 2012, “Mobile
Marketing: Three Principles For Success” report.
2
For more detail about how to initiate NFC campaigns see the February 28, 2012, “Trial NFC To Connect
the Real World with Mobile” report.
3
The campaign saw more than 15,000 unique mobile engagements in the first six weeks alone.
4
When choosing among the LBM upstarts, you should favor vendors that enable you to export the data
you’ll accumulate — and in a form that can be ingested by your existing analytics tools.
5
For more information on the opportunities with geosocial services see the December 6, 2011, “Marketing
Via Geosocial Apps: Why And How” report.
6
For more detail on the changing privacy legislation landscape see the January 13, 2012, “Privacy Laws Force
Rich Dialogue With Customers” report.
7
For an explanation of some of the opportunities opened by location-based commerce see the February 15,
2011, “Location-Based Commerce: An Evolution In Mobile Shopping” report.
Forrester Research, Inc. (Nasdaq: FORR) is an independent research company that provides pragmatic and forward-thinking advice to global leaders in business and technology.
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