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What is Proximity Marketing and How Does It Work?

There has never been a better time to use location-based technologies in your advertising and marketing efforts, your audience is ‘on the move’!

There are nearly 5 billion mobile phone users around the world, of which more than 3 billion users are smartphone users.

Proximity marketing is a very effective marketing strategy that can be beneficial to most companies, regardless of which sector they operate.

This guide from Fluid Ads will explain what mobile proximity marketing is, who uses it, and what the benefits are.

Plus, we’ll tell you the most important solutions for proximity marketing, address key questions and provide examples of successful proximity marketing strategies.

If you want to learn more about proximity marketing, keep reading.

What is Proximity Marketing?

Proximity Marketing is a form of location based advertising in which companies and marketers advertise to people within a predetermined proximity.

Using the geographic location of potential customers to market goods and services is an example of proximity marketing. This is typically accomplished through digital marketing platforms such as Facebook or Fluid Ads who include proximity marketing options as part of their targeting capability.

The term “hyper-local marketing” can also be used to refer to “proximity-based marketing.”

Because it is such a highly targeted form of marketing, it enables companies to advertise their promotions to discrete customer groups and custom audiences: 

  • audiences who are attending events 
  • audiences who live nearby 
  • audiences who are near to their competitor’s premises

For example, marketers can choose to only display their ads to people within a certain neighbourhood, sports stadium, conference centre or store.

Using proximity marketing as a targeting option revolutionises  personalisation, serving messaging from a brand in a unique way, that will feel hyper-relevant to the person receiving the ad 

Who Uses Proximity Marketing?

Many different companies engage in location-based marketing activities.

Mobile proximity marketing is a form of marketing that is used by restaurants and fast-food outlets to display specials and attract customers who are walking by. They can also provide existing customers with advertisements and coupon offers to encourage them to return, thereby increasing the amount of repeat business they do.

In the field of real estate, realtors can show advertisements to people who are in the market for new homes, rentals, or office space depending on the location and behaviour of the potential buyers or tenants.

Charitable organisations can use proximity advertising to solicit monetary contributions from residents of specific areas or cities.

In the travel industry, companies use proximity advertising to display details about upcoming events, deals, and rewards related to particular destinations, car hire firms, accommodations, or local attractions. This information can be displayed to a customer’s mobile device.

Different kinds of solutions for proximity marketing

Here are the most common solutions that are available to companies who wish to use proximity marketing as part of their marketing strategy.

Marketing via Bluetooth-based proximity sensors

The use of battery-operated proximity marketing beacons is essential to the success of Bluetooth proximity marketing, which is also known as beacon marketing.

This type of marketing is typically implemented in commercial establishments. Bluetooth is used by proximity marketing beacons to transmit signals to nearby mobile devices over short distances.

Customers who have a company’s mobile app installed on their mobile device and Bluetooth enabled can be presented with promotions and special offers when they are in the proximity of marketing beacons.

Wi-Fi Proximity Communication Marketing

Customers are very interested in having access to free Wi-Fi. It encourages them to remain in the store for longer and may even cause them to spend more money. However, these are not the only benefits of this.

You can use Wi-Fi proximity marketing if you provide customers with free Wi-Fi inside of your establishment.

It is a great opportunity to display a promotion as soon as a customer’s Bluetooth enabled mobile device successfully connects to your network upon entering the store. You also have the option of making offers to them as they are about to leave. In addition, you have the option of requiring first-time visitors to provide an email address in exchange for connectivity. In the future, this means you’ll also be able to reach them via email marketing.

Proximity Marketing Using RFID and NFC

Both radio-frequency identification (RFID) and near-field communication (NFC) are examples of technologies that can be integrated into mobile phones and used to assist businesses in expanding their customer base.

To make use of RFID or NFC proximity marketing, you will need to affix minuscule transmitters to the items that you have available for purchase. Many retail establishments, for instance, incorporate these transmitters into their intelligent barcodes.

These items can provide information to smartphones when scanned. A Wi-Fi connection is not necessary for this to work When the user of the smartphone is close to the object, a wireless exchange of data occurs between the object and the smartphone.

Proximity marketing devices make it possible for you to provide your customers with interactive shopping, marketing, and payment experiences. In addition, you can gain insights into the customer behaviour, and product sales.

Marketing Utilising Global Positioning System Data

There is a connection between geo-targeting and geo-marketing and GPS-based proximity advertising. This specific subset of location-based marketing makes use of location data to specifically target people in certain geographic areas.

For instance, stores that are part of the same retail chain may choose to advertise winter coats or bikinis depending on the region in which they are situated. The use of GPS technology can also assist in the delineation of a geographical region within which a targeted marketing campaign can be carried out.

There is one thing that all of these different solutions for proximity marketing have in common. They make it possible for you to send targeted promotions to your customers at the locations where they are (or will soon be) doing business.

Geofencing 

Geofencing marketing is arguably the most effective way to utilise location based marketing as part of a marketing strategy. Geofencing involves drawing a virtual Geofence on a map and allows companies to target people who enter the area; you can even continue to display ads to people up to 30 days after they leave the geofence. 

Advantages to Utilising Proximity Marketing

Let’s summarise the benefits of location-based marketing:

  • You can personalise the experience of the customer based on their past, present, or future behaviour based on their location. If you have a mobile app, utilising proximity advertising to deliver information and offers to users can increase engagement with your app driving up DAU and WAU metrics..
  • You can pull previous customers back to store, especially those who are already nearby, or lure your competitors’ customers to your store 
  • Hyper-local tactics activate only your target audience which improves conversion rates (CR) and is extremely cost-effective. Proximity advertising assists businesses in building better relationships with their customers – personal, relevant marketing messages demonstrate to the customer that the brand understands their needs

How Effective Is Marketing Done in Close Proximity?

Proximity advertising has great potential to help you reach more customers on a local level and increase both foot traffic and revenue. Chat to the Fluid Ads team about developing a strategy for proximity advertising including our game-changing.

Geofencing tactics, which we talk about below.. 

The Main Benefits of Geofencing

Why are marketers so excited about geofencing, and how can it help your marketing efforts? 

Better Targeting

Geofencing gives you the ability to hyper-target prospects, you are targeting customers where they are, not where you want them to be! You’re able to reach people at the right time, in the right place, and engage them with ads that are relevant and timely.

Money Well Spent

When your ads are hyper-targeted and sent at the right time and place, you’re creating opportunity on a local level. With geofencing, you spend your marketing budget on prospects who are most likely to take action and therefore these campaigns tend to perform more strongly than standard display campaigns, increasing your ROI.

Better Information Gathering

Once geofencing is set up, you’ll have access to a lot of useful data, such as: 

  • which brick-and-mortar stores are doing better 
  • which target group is more engaged 
  • traffic patterns (when people are in or near your locations) 
  • how long people stay 
  • how effective your messages are

By combining this information with online activity, purchase information, and web browsing habits, you can enhance the user’s experience, increase engagement, and better understand user behaviour. This same data can also be used to send customised follow-up messages to people who have been to certain places before.

Customised Service For Customers

Geofencing allows you to create very personal customer experiences which are even more powerful and impactful. You can use the demographics of a particular region to make your brand super relevant. 

If a popular local sports team is doing well this year, you could use that information to make some custom promotions (like giving away one free coffee every time the Panthers win!).

Advantages Over Competitors  

When deciding where to put your virtual fence, you should think about where your customers are likely to be, as you can serve your ads to competitors’ customers.

Many big brands are big fans and have used this tactic successfully. Why? Because geofencing can help you poach customers away from your competitors.

Dunkin Donuts was known for using geofencing to steal customers from its rivals. It did this by setting up geofences around other coffee shops in the area and sending targeted advertisements to those prospects. Of the 36% of people who clicked on the offer (a coupon), 18% saved the coupon and 3.6% went back to use it.

If you would like to learn more or set this type of marketing up for your business, get in touch with Fluid Ads today. 

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