Marketers to Target Audiences Carefully with Location-​Based Marketing

One of the most exciting new promotional angles from a marketer’s perspective, mobile check-​ins, could backfire if merchants aren’t careful about how they use it. Marketers competing for consumer business by offering prizes rely heavily on the use of mobile phones. While certain consumer groups have accepted this marketing method, many others aren’t so willing to sign up. Instead, they’re signaling they want to limit the amount of private information they share with marketers.

For now, industry leader Foursquare Labs Inc. is looking to raise another $20-$40 million in venture funding. That level of cash would allow the company to compete more effectively with newer firms like Gowalla and Shopkick. The company says it has 8 million users. Foursquare has also introduced a merchant program to allow marketers to offer discounts to local consumers. All of this activity indicates a growing market.

But many consumers are not interested in giving up their location even in exchange for loyalty points, discounts or other giveaways. The latest information from The Nielsen Company shows the hesitancy to share location is somewhat linked to gender and age. By gender, here are the percentages of consumers who are concerned about giving out that information:

  • Female 59%
  • Male 52%

There is also an interesting mix of attitudes about sharing location-​based data when it comes to age. Consumers most concerned about protecting privacy are generally older, but not always.

  • 55+ years old: 63% (number concerned about protecting privacy)
  • 45–54: 61%
  • 35–44: 56%
  • 25–34: 50%
  • 18–24: 52%
  • 13–17: 55%

Nielsen analysts say that consumers will grow more comfortable with location-​based apps and predict that marketers will be able to earn consumer trust. That may be true but the data clearly shows that over half of consumers in the youngest age groups are not ready to check-​in with their locations just yet. If those attitudes do not change, marketers may have a hard time making this promotional strategy really take off.

[Sources: Ante, Spencer. Foursquare Seeks Funds. Online​.wsj​.com. 23 Apr. 2011. Web. 4 May 2011; Privacy Please! Blog​.nielsen​.com. 21 Apr. 2011. Web. 4 May 2011] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.