Target the right place: Are people really in the places where they checked-in?

As a strategy planner, when you are tracking the locations of your consumers and thinking about creative strategies, they may be “flash moving” to somewhere else. Immersed in IMC thinking since I first enrolled in Medill, I am always curious about changes happened in marketing, and recently I have discovered two articles that might enlighten your ideas about location-based marketing.

Besides physical address and GPS data, the knowledge of consumer’s location is based on active consumer behaviors. However, the article  “Geographic Drift: Understanding Location in Social” published on 140proof recently revealed a phenomenon called “geographic drift”. It means that people check-in at a place yet they are not observed there. For example, people who are in Indiana may state they’re in a nearby metropolis, Chicago. Why do people cheat on this? Commuting is one factor for people travelling to places nearby. Stating that they are in a larger city makes it easier to self-identify and increases credibility. But if their location information serves them in a good way, they don’t need to lie about it. The article then explained that you could turn to social sites for help. Examine their profiles on Facebook, look at their check-ins on Foursquare, refer to Twitter GPS information and even analyze their IP addresses. Be careful: geographic drift may happen intentionally or just because of technical errors.

Source: blog.140proof.com

Another article “Don’t Let Geographic Drift Steal Your Marketing Budget” (written by Kimberlee Morrison) cited the facts described in the first article and sent out an alert to you in terms of making marketing budget. This article distinguishes people’s motivation to state a different place and factors that impact geographic drift. Also, it offered a suggestion for you to conquer the problem. According to the article, IBM has created an algorithm that compares geo-tagged and untagged tweets and analyzes metrics, such as hashtags and content about location information; the algorithm has been proved to be effective. In this way, location data becomes more readily and credible.  

After reviewing the two articles, I suggest three actionable items for you to consider before you make any marketing strategies that aim at targeting your distanced customers.  

o   Re-evaluate your budget on location-based marketing

Even though marketing strategies using geo-fence and LBS (Location-Based Service) have gone well so far, location remains a complex concept to utilize. Its costs on talent resource and analytics are quite important to consider.

o   Observe overall behaviors of your consumer in social

Social media provides abundant information about your consumers. They create more credible profiles on LinkedIn for jobs while posting “latergram” photos about Coachella on Instagram.

o   Go deeper, read between lines

People use metaphors. People sometimes are tricky even when speaking within 140-character tweets. Consumers have concerns and reasons for that but you can read their minds.

Being accurate in capturing changes of consumer behavior will add much value to your marketing strategies. The three action items urge you to rethink the relationship of input and output in location-based marketing and offer you opportunities to learn more about your consumers.

Shefei Shi (Faye) is currently a graduate student in Integrated Marketing Communications at Medill, Northwestern University. With a background in Information Management, she is interested in Internet and digital marketing and analytics. She has previously worked for a technology company in a PR agency. Follow her on Twitter @camelliafaye.

High? Low? Last Minute Pricing in Mobile Age

Traditional pricing models in hotel, airline, theatre, or sport industries tend to charge high price on rooms or seats for last minute purchasers. In the eyes of managers, last minute purchasers have rigid demand on the service, and are limited in choices in accessible range, so they have a high willing to pay. So collecting high revenue per unit from these last minute purchasers is critically important to ensure the overall cash flow of the company.

However, this model is being challenged today. The mobile Internet technology is changing the landscape of information acquisition process for these last minutes purchasers. Now through mobile sites or apps on smart phones, people can easily search across many different hotels, airlines, and agencies, compare prices, check out photos and consult reviews before finalizing deals. In past, they had to “walk up” to front desks or ticket windows and inquire about rates or prices in a small range in area.

In new situations, more competitors are brought in at each single case of consumer, and the status of consumer is tremendously changed. Cooperating with traveling website or app operators, many hotels and theatres started to offer mobile-only low rates to attract these last minute purchaser. They recognize that these same-day or last minute reservations provide an opportunity to fill rooms and seats that they know will otherwise go unsold, and so they are willing to offer significant discounts of up to 50 percent off the rates available through other channels to consumers accessing information on mobile devices. For example, Barney Hartford, the CEO of Orbitz, mentioned that a great four-star resort property in Scottsdale, Ariz. provided an additional discount for mobile users as part of their "Mobile Steals" offering, bringing the rate down from $129 to $83 per night.

So, this is the truth: when information asymmetry is broken by new technology, traditional pricing model can no longer bring more revenue. In fact, it makes you leave money on the table.

Terrence Ye is a graduate student in the Northwestern Medill Master of Integrated Marketing Communications program and is specializing in consumer insight from big data. Terrence will be graduating in December 2012. He can be reached on twitter using the handle @terrenceye