Proximity Marketing and Advertising: The Technology and Tactics

As soon as I walk into my local Kroger (supermarket) chain, I look down at my phone and the app alerts me where I can either pop up my Kroger Savings barcode for checking out or I can open the app to search and find items in the aisles. When I visit a Verizon store, my app alerts me with a link to check in before I even get out of the car.

These are two great examples of enhancing a user experience based on hyperlocal triggers. The industry is known as Proximity Marketing.

The proximity marketing industry is expected to grow to $52.46 billion USD by 2022.

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What is Proximity Marketing?

Proximity marketing is any system that utilizes location technologies to directly communicate with customers via their portable devices. Proximity marketing can incorporate advertising offers, marketing messages, customer support, and scheduling, or a host of other engagement strategies between a mobile phone user and the location they’re within close distance of.

Uses of proximity marketing include the distribution of media at concerts, information, gaming, and social applications, retail check-ins, payment gateways, and local advertising.

Proximity marketing isn’t one single technology, it can actually be implemented utilizing a number of different methods. And it’s not limited to smartphone usage. Modern laptops that are GPS-enabled can also be targeted through some proximity technologies.

• NFC – The location of the phone may be determined by near-field communications (NFC) enabled on the phone connecting to an RFID chip on a product or media. NFC is the technology deployed for Apple Pay and other payment technologies but doesn’t have to be limited to payments. Museums and monuments, for instance, can install NFC devices to provide tour information. Retail outlets can deploy NFC on shelves for product information. There’s a ton of marketing opportunity with NFC technology.
• Geofencing – As you move with your phone, your cellular connection is managed between towers. Text message marketing systems can utilize your location to push text messages to only those devices that are within a specific region. This is known as SMS Geofencing. It’s not a precise technology, but it can be useful to ensure your message is only sent to the target audience you need at the time you want.
• Bluetooth – Retail locations can utilize beacons that can connect to your smartphone. Typically there’s a mobile application that enables the technology and permission is requested. You can push content through Bluetooth, serve local websites from WiFi, utilize the beacon as an Internet access point, act as a Captive portal, offer interactive services, and operate with no Internet connection.
• RFID – There are various technologies that make use of radio waves to identify objects or people. RFID works by storing a serial number in the device that identifies an item or person. This information is embedded in a microchip that is attached to an antenna. This is called an RFID tag. The chip transmits the ID information to a reader.
• Proximity ID – These are proximity cards or contactless ID cards. These cards use an embedded antenna to communicate with a remote receiver within a few inches. Proximity cards are read-only devices and are mainly used as security cards for door access. These cards can hold a limited amount of information.

Companies who wish to develop these platforms utilize mobile applications that are tied, with permission, to the geographic location of the mobile device. When the mobile app gets within a specific geographic location, then Bluetooth or NFC technology can pinpoint the location where messages can be triggered.

Proximity Marketing Doesn’t Always Require Expensive Apps and Geocentric Technology

If you’d like to take advantage of proximity marketing without all the technology… you can!

• QR Codes – You can display signage at a specific location with a QR code on it. When a visitor uses their phone to scan the QR code, you know exactly where they’re located, can deliver a relevant marketing message, and observe their behavior.
• Wifi Hotspot – You can offer a free wifi hotspot. If you’ve ever logged into an airline connection or even a Starbucks, you’ve witnessed dynamic marketing content that’s pushed directly to the user via a web browser.
• Mobile Browser Detection – Incorporate geolocation in your company website to detect people using a Mobile Browser at your location. You can then trigger a popup or utilize dynamic content to target that individual – whether or not they’re on your Wifi. The only downside to this is that the user will be asked for permission first.

Choice Loans has developed this infographic as an overview of Proximity Marketing for small and medium-sized enterprises (SMEs):