LBS and Contextual Marketing


LBS and Contextual Marketing

By Paula Bernier, Executive Editor, IP Communications Magazines  |  July 01, 2011

This article originally appeared in the JULY issue of INTERNET TELEPHONY

It’s a tricky situation. At the same time that wireless technology and over-the-top applications are creating a wealth of new possibilities for location-based and contextual marketing, many consumers are hyper-aware of the Big Brother effect new communications technologies can engender, and are increasingly frustrated with the barrage of telemarketers and pop-up ads competing for their attentions.

Just look at the brain damage Apple (News - Alert) and Google incurred after reports surfaced this spring about how the iPhone collects and stores for up to a year customer location data, even when the location feature is not activated by the user. (Similar claims have been made against Google (News - Alert) and devices based on its Android mobile phone operating systems. And both companies in early May faced federal lawmakers in an attempt to address such concerns, which reports indicate have led to the introduction of at least four online privacy bills this legislation session.)

Still, for marketers, being able to target not only the best prospects, but the ones best positioned to act on their marketing messages, can be an invaluable key to unlock new branding and sales opportunities. And marketers can always have systems that enable customers to make the decision as to whether their location is available to whom.

“Customers should all be told of the anti-privacy concerns,” says Jeff Kagan, industry analyst. “They should also be told of the benefits. Then the customer can decide. If they decide to participate they can opt-in and sign-up. The rest would not be part of this system.

“The reason companies don't want to do this is it gives them a much smaller list of customers to market to. And it is all about marketing,” Kagan adds. “The bigger the list the more profitable for the companies.”

Of course, not all communications marketing tools rely on location tracking anyway.

Cullen Davidson, director of product management at Globys, talks about how telecommunications service providers can leverage their treasure trove of customer information to offer special packages and g messages for select customer groups. Globys, VeriSign (News - Alert) spinoff that got its start in the electronic bill payment and presentment space, offers tools and consulting services that provide service providers with insight into customer behavior and enables them to do that targeted marketing so they can win and retain high margin customers, and grow ARPU.

Davidson says that overall the customer experience and customer satisfaction levels related to telecommunications services, including wireless, are pretty low. He attributes that in part to the fact that these types of companies tend to have huge numbers of customers with a wide variety of service turn up dates, contract windows, service plans, usage behaviors and geographies. That’s an enormous range of activity for a company to track and respond to, Davidson adds, saying that Globys can help service providers with that.

Right, but how is that any different than the telco data mining efforts we’ve been hearing about for about two decades, you may ask. Davidson explains that while data mining tends to be manually intensive – requiring data gathering using advanced algorithms following by human research of those results – what Globys delivers is an automated system that allows marketers to figure out how and when best to communicate with customers so they will result in a bigger spend.

For example, a telco could offer a customer unlimited texting when that subscriber is just about to go over his or her plan's allotted amount of texts. Globys can work with a wireless service provider to get a better return on prepaid customers. It can do that by helping communicate to customers that their service window is nearly closed, yet they have a set number of minutes or bit left to use in a limited time. The telco can they suggest how the customer might use those bits, but visiting a new website, for example, and that could help drive more use by that customer and more traffic on the select site in the future, Davidson says.

“The concept of contextual marketing has expanded beyond online search to mobile and with the right tools, this represents a major transformation in how marketers engage with consumers,” says Duane Edwards, co-founder and senior vice president of product management of Globys, which earlier this year launched, a site dedicated to educating the entire mobile ecosystem – carriers, brands, app developers, handset manufactures – on the opportunities that contextual marketing presents. “The mobile experience is filled with contexts like relative location, time of day, what an individual is interested in, and how their social network influences their purchase and usage behaviors. Those who tap into all of these contexts to deliver a personally relevant experience will have much higher success rates than those who continue to aim blindly.”

Davidson explains that the goal of contextual marketing is not to deliver advertising or push people to spend more money by spamming them, the goal is to improve the customer’s experience relative to their telecom and data communications services. He adds that Globys isn’t tracking where customers are; rather, everything is completely done internally and within an automated and secure system.

Edited by Rich Steeves


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