Research places value of location-based marketing at $6.2bn
.GSM operators can offer data services to local market
A recent survey by Pyramid Research, a telecom research arm of Light Reading Communications Network, US, has valued global location-based marketing services at $6.2 billion (about N942.4 billion) in 2015.
The research says the figure is equivalent to almost 35 percent of total mobile advertising revenue, and more than 60 percent of total location-based services revenue.
In 2008, the location-based advert market, according to the research findings, was worth just $86 million, representing 10 percent of the total mobile advertising opportunity. In 2010, this had boomed to reach $588 million, equivalent to 18.5 percent of all mobile advertising. How does location-based marketing work? It is similar to Google Maps, where a traveller can acquaint himself with locations and venues within his environment wherever he is. Marketers ordinarily are keying into this platform to expose their businesses, increase average order value and loyalty.
For instance, millions of users turn to Foursquare Network everyday to help them explore their world. For brands, Foursquare offers a unique way to stay engaged with their followers, no matter where they are in the world.
Analysts say businesses can announce specials or promotions through these apps, so when users “check in” they receive notifications of nearby deals. “The different components of mobile advertising (including search, display and messaging) are all growing,” Jan ten Sythoff, Analyst at Large for Pyramid was quoted as saying, “however, local search will be the most important driver of location-based advertising revenues. Not only are navigation applications moving to a search-funded model, but there are also a wide range of other companies looking to capitalise on the growth of local search, including start-ups.
Following many years of high expectations, Pyramid Research says the location-based services market is finally coming of age, noting that the “growing adoption of GPS devices is the key driver, helping a whole host of different applications and services to grow.” For mobile operators, this is an opportunity to drive new revenue streams, it says, but it is also a threat because it means access to location information is no longer their monopoly. Operators need to become more active in the location space by driving their own-branded navigation and local search applications on devices they distribute, maximising smart-phone sales and bundling people-finding services with packages targeting specific segments. The report provides a detailed overview of the current status and size of the location-based services market, taking a specific look at the positioning of the mobile operators within the value chain and how they can leverage their assets to take a stake in this growing opportunity.
Over the years, brand owners have been searching for unique and the best approach to engage consumers. Charles Igbinidu, CEO of TPT International, says location-based marketing has become another platform for marketers, which GSM operators can tap into. Recently in Nigeria, Tnsrms, a foremost research firm, launched Mobile Life product where it was revealed that “the future of digital is mobile.” Mobile phones have become integrated into the everyday lives of many Nigerians, though the level of usage depends on individual’s nature of business but its ownership and general use is unaffected by income or occupation.
Mobile phone applications, depending on category, can now serve many purposes such as voice call, browsing, data services, payment services, video, games, pictures and music. The research states further that mobile phone is the multipurpose device for emerging market consumers. It further reveals that the future of mobile phones is critical and low cost smartphone is a potential game changer. Aggrey Maposa, CEO, TNS-RMS West Africa, notes that mobile phones are increasingly becoming the primary device for internet access and communication, particularly in emerging markets where entertainment and multimedia features are a key requirement for engaging with consumers.
