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Proximity Marketing and Advertising: The Technology, Types, 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 leave 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 projected to grow significantly in the coming years. According to Market Research Future, the industry was valued at $65.2 billion USD in 2022 and is expected to grow from $87.4 billion USD in 2023 to $360.5 billion by 2030, exhibiting a compound annual growth rate (CAGR) of 22.44% during the forecast period.

Market Research Future

This growth is attributed to the increasing adoption of smartphones, advancements in proximity marketing technologies, and the growing demand for personalized marketing strategies

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 can extend to the distribution of media at concerts, providing or gathering information, gaming, and social applications, retail check-ins, payment gateways, and local advertising.

Types of Proximity Marketing

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

Types of Proximity Marketing

  • Beacon Technology: Utilizes Bluetooth Low Energy (BLE) signals to send targeted advertisements and smartphone notifications within a specific area, enhancing personalized shopping experiences.
  • Geofencing: Involves creating a virtual perimeter for a real-world area to send push notifications, text messages, or alerts when a device enters or exits this area, commonly used in retail to attract nearby customers.
  • Near Field Communication (NFC): Enables two devices to communicate within a few centimeters, used for interactive ads, product information, and instant coupon delivery upon tapping an NFC tag.
  • QR Codes: Quick Response Codes scanned by mobile devices to direct users to specific webpages, videos, or downloads, used on product packaging, posters, and displays for promotional content.
  • RFID (Radio-Frequency Identification): Uses electromagnetic fields to identify and track tags attached to objects, enhancing customer engagement through personalized shopping experiences and interactive marketing campaigns.
  • Wi-Fi-Based Marketing: Offers free Wi-Fi access in exchange for user registration or check-ins, allowing businesses to send promotional messages, collect data, and track foot traffic patterns, effective in malls, restaurants, and public spaces.

Each proximity marketing type provides unique opportunities for engaging with customers in a contextually relevant way, leveraging technology to drive sales and enhance customer loyalty.

Each proximity marketing type provides unique opportunities for engaging with customers in a contextually relevant way, leveraging technology to drive sales and enhance customer loyalty.

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

Non-Traditional Proximity Marketing

There are multiple non-traditional ways to incorporate proximity marketing, many that don’t require a major investment in technology:

  • Augmented Reality (AR): Offers an interactive experience of a real-world environment where the objects that reside in the real world are enhanced by computer-generated perceptual information. Marketers can use AR to create immersive experiences, allowing customers to visualize products in a real-world context, such as trying on clothes virtually or seeing how furniture would look in their home.
  • 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.
  • QR Codes – You can display signage with a QR code at a specific location. When visitors use their phones to scan the QR code, you know exactly where they’re located, can deliver a relevant marketing message, and observe their behavior.
  • Smart Posters: These are posters embedded with NFC chips or QR codes that users can scan with their smartphones to access additional content, such as videos, websites, or special offers. Smart posters can be placed strategically, offering a convenient way for customers to engage with the brand’s digital content.
  • Voice Proximity Marketing: Using smart speakers and voice assistants to deliver promotional content or information. Businesses can develop skills or actions for platforms like Amazon Alexa or Google Assistant, providing users with interactive brand experiences through voice commands.
  • Wi-fi 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 pushed directly to the user via a web browser.

These technologies complement the traditional proximity marketing tools by offering innovative ways to create engaging and memorable customer experiences, further enhancing the effectiveness of marketing strategies in reaching and influencing target audiences.

Examples of Proximity Marketing

Proximity marketing offers innovative ways for businesses across various industries to enhance customer engagement, personalize experiences, and improve operational efficiency by delivering targeted content and services based on the physical location of their customers.

  • Education: Schools and universities can use beacon technology to send notifications about upcoming events, deadlines, or emergencies directly to students’ smartphones as they move around campus.
  • Entertainment: Cinemas and theaters can deploy beacon technology to offer visitors special deals on upcoming shows or exclusive content related to the movie or play they are about to watch as they enter the venue.
  • Finance: Banks can use geofencing to send personalized offers or important information to customers when they are near a branch, such as loan offers or investment advice sessions.
  • Healthcare: Hospitals and clinics can utilize proximity marketing to guide patients through the facility with wayfinding information sent to their smartphones, reducing missed appointments and improving patient experience.
  • Hospitality: Hotels can use NFC or RFID technology to enable guests to use their smartphones as room keys or to access personalized services and experiences during their stay.
  • Real Estate: Open houses can feature smart posters with QR codes, allowing prospective buyers to quickly access property details, virtual tours, or contact information for the real estate agent as they visit different locations.
  • Retail: Grocery stores can use mobile apps to pop up a digital loyalty card on a customer’s smartphone as they enter the store, and tabletop stickers in restaurants can display a menu or offer the ability to order and pay directly from the table using QR codes.
  • Sports Venues: Stadiums can employ geofencing to engage fans with exclusive content, merchandise offers, or seat upgrades as they enter or move around the venue.
  • Transportation: Airports can use beacon technology to provide passengers with navigation assistance, updates on flight statuses, or special offers in duty-free shops as they move through different airport sections.

Proximity Marketing Infographic

This infographic has an overview of Proximity Marketing for small and medium-sized enterprises (SMEs):

What is Proximity Marketing
Source: Choice Loans

Douglas Karr

Douglas Karr is CMO of OpenINSIGHTS and the founder of the Martech Zone. Douglas has helped dozens of successful MarTech startups, has assisted in the due diligence of over $5 bil in Martech acquisitions and investments, and continues to assist companies in implementing and automating their sales and marketing strategies. Douglas is an internationally recognized digital transformation and MarTech expert and speaker. Douglas is also a published author of a Dummie's guide and a business leadership book.

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