With expectations that this will be the year mobile and location-based advertising finally takes off, publishers have an opportunity to exploit their local market relationships and claw back business from global e-commerce.

“Publishers are in a unique position,” says Claire Mula, managing director of Singapore-based Sprooki. “They have always been aggregators of location-based content and advertising, and are reinventing themselves for retail and other highly localised sectors.”

Location-based mobile technology lends itself to segments including cars, jobs, houses, personals and directories. “In this way they can continue to position themselves as locally relevant and act as the ‘local hero’,” says Mula, who worked in digital strategy and product development roles during a three-year stint with Fairfax Media.

“Location-based targeting is intuitive and directories have been built on the principle for decades,” she says. “Where would you rather eat tonight? The best restaurant in the world or the best restaurant on your street?”

Launched in 2011 as a mobile platform to enable physical retailers – such as stores, malls and ‘store in store’ concepts – Sprooki’s system encompasses proximity marketing, mobile shopping and data analytics. It attracted more than SG$1 million (A$880,000) in start-up finance after launching a concept service with shopping mall 313@somerset in Singapore’s Orchard Road – delivering 35,000 offers and double-digit mobile conversion – and has since expanded to Australia, Taiwan and the Philippines.

But the technology’s potential varies from country to country. Asia’s retail sector is growing, with retailers less affected by the deep impact the internet has had in the US and Australia. “In these markets, mobile including LBM is as high or even higher on retailers’ ‘bucket lists’ than ecommerce or selling online,” she says.

The focus on ‘mobile-first’ markets in the Asia Pacific – mainly capital cities such as Jakarta, Manila, Singapore and Kuala Lumpur – reflects the high concentration of retailers and connected shoppers in a hyperlocal area. “In the Philippines and Malaysia, only one in four have a smartphone, but the density is there as most capital cities.”

By contrast, retailers in Australia have been focussed on growing their online channels, and are only now moving to a more ‘total retail’ approach with mobile. “So it’s moving more slowly than the US and Asia, with few good ‘fit for purpose’ examples using location extensively for messaging, navigation and campaign targeting,” she says.

Among publishers, News Corp Australia has made a somewhat tentative start, rolling out its GPS-based LocalShoppa app in Sydney’s Northern Beaches late last year via the Manly Daily suburban brand, with offers and campaigns from nearby retailers. Online, its ‘face’ has been former NRL star turned cafe owner Ryan Girdler, who has been using the technology to offer customers ‘buy-one, get-one-free’ deals on his frozen yogurt, smoothies and signature coffee. The app works on iPhone and Android devices to deliver ‘what you really want, where you are’ within a 25 kilometres radius, and is a finalist in INMA’s 2014 awards.

In Asia, Mula says she works with publishers such as Singapore Press Holdings and its Asia One Network to enable Sprooki’s clients to cross-publish their campaigns directly into the Straits Times publisher’s advertising network – extending reach and growing alternative revenue streams for SPH. Its location-based SDK can also extend a publishers’ classified and directory services with say, a property app for hyperlocal messaging, open houses and sales… or incentives to test drive a new car in motors apps.

Mula says that, as a ‘mobile first’ market with a highly traditional retail sector, India is also on marketers’ radar. “The problem is that the proliferation of smart devices is still below ten per cent, so location-based solutions tend to focus on less sophisticated GPS/wifi location detection and more on messaging technologies such as SMS.

UK-based mobile publishing consultant Mark Challinor believes that now most publishers have a mobile offering, location will be key in driving new revenues.

Current mainstream digital ads are not working well for consumers, advertisers or publishers, despite massive recent change. “Readers can be turned off, especially by mobile ads which are irrelevant and intrusive, leading to ad blocking,” he says. In an INMA post, he suggests the advertising industry needs to change from a ‘pure selling’ culture to one which ‘helps the journey’ to purchase.

Location’s potential is reflected in research including last year’s Verve Mobile findings that mobile campaigns which leveraged location were twice as effective as those which didn’t. All location-based strategies did better than the industry average of 0.4 per cent click-through, with geo-aware campaigns averaging one per cent.

“Imagine the power publishers have to target offers, subscriptions and news to the particular environment their customers currently occupy,” he says. “You must not abuse the relationship and trust, but if your efforts are of value and relevant … bingo!”

The Verve report cited a campaign in which fashion retailer H&M created excitement around a new underwear line and scored a CTR of 2.3 per cent with geo-fenced store locations, dynamic expandable ads, and ‘tap-to-map’ and social media.
“The data can also be coupled with audience segmentation to reach only the users marketers want,” says Challinor. “With third-party data, location-based campaigns can reach users based on demographic or transactional histories.”
“The more exact the location, the more valuable it is.”

Several options can pinpoint a shopper, taking distance into account in pitching deals which are just attractive enough to turn a customer’s head, or turn around their car. That issue was among subjects canvassed at a meeting of the Location Based Marketing Association’s Singapore chapter, at which Mula was one of the participants, last November. While it might take a 70 per cent discount to get someone to come in to a store in Jurong from Changi, 15 per cent could be enough if they were nearby, she suggested.

Google head of performance products James Tan believes “anyone within a kilometre of a store” can be urged in with the right offer, which needs to be tailored to the product: “It might be hundreds of dollars to get a consumer to sign for health insurance, while a restaurant meal might only be worth cents or low dollars,” he says.

Marketers are only scratching the surface of what is possible. “By including location in detection, messaging, incentives, payments and intelligence tools, brands and marketers can understand the influence and value of location better… as well as its impact on margins,” Claire Mula says.

While GPS, cell tower triangulation and wifi – or a combination of all three – have been the most affordable and accessible, there’s a trade off between accuracy and device battery life while outdoors and in transit. And GPS can fail indoors: “It’s not great for wayfinding in shopping malls, airports or exhibition venues,” she says. “In a five floor shopping mall, GPS can only detect longitude and latitude, not which floor a device is on.”

Server-side technologies which intercept the device as it searches for available wifi or 3G mobile networks have been used for location detection and wayfinding, but were expensive to implement and may fail with the timely, location-triggered messaging required by a mobile app.

Enter Bluetooth 4 which despite its relatively low power, enables very small beacons which can lead shoppers around a store, pushing offers and extra information via their mobile phones. “They can be in sequential order, time-triggered and – if you know the identity of the shopper – related to rewards programmes,” Alex Burke, Asia Pacific chief executive of Sydney-based Tigerspike told attendees at the LMBA event.

Whether or not Apple’s iBeacon – now included in its iOS7 mobile operating system – is the gamechanger some say, Mula says it has made location detection indoors more affordable and accessible. “A perceived drawback is that both the user’s location and Bluetooth preferences need to be allowed or ‘on’ for it to work, but developers are finding ways to incorporate this into settings.”

Sprooki has a first iBeacon deployment with telecommunications giant SingTel in 313@somerset – and Mula says the majority of app users have had location turned on. “While Android typically shares location with developers through its operating system, Apple had not until iBeacon,” she says. As a result, marketers in the region had been reluctant to invest in relatively expensive solutions for only a portion of their customer base.”

As the technology advances and industry becomes more educated on the power of location data, Mark Challinor says the expectations of advertisers and their consumers are also expanding.

“Publishers are in a difficult position,” he says, citing Kleiner Perkins research showing the disconnect between eyeballs and mobile advertising revenues. It showed that while print achieves only six per cent of the media eyeballs (and falling) it wins 23 per cent of advertising revenues; mobile gets 12 per cent of eyeballs but only three per cent of advertising revenues.

“There’s much to do still,” he says. “All of this points to the need for a huge change in the future advertising landscape. Location can start to offer more creative, more powerful, more relevant and more revenue-generating mobile ads, and publishers need to make a start on it.”

Moving the needle
Beyond location– Layering time of day, previous content and site/app usage and profile with location results boosts response and conversion rates in retail, as Sprooki and other platforms such as Google and Placecast have found. “LBM will become even more sophisticated and intelligent,” says Claire Mula.

Privacy and regulation– With increasing messaging volumes, staying relevant and having an ‘opt in’ strategy – such as via a branded app – becomes important. “Australia has had some regulation for years, but now southeast Asia markets such as Singapore and Malaysia have also implemented policy.”

Redefining location– “The days of the ‘check in’ have been overtaken and the challenge is for mass-scale location detection to ‘move the needle’ for many sectors,” Mula says. “Next generation technologies such as proximity payments and wearable devices like Google Glass will provide even greater value for consumers to share their location data.”***

Despite high adoption in developed Asian markets, there is room for growth across the whole region, according to Nielsen penetration research last year. Although at 15 per cent, the Philippines has the lowest penetration – followed by India and Indonesia – residents of metro Manila have an average of 4.6 connected devices (including laptops, tablets, desktop PCs, smart TVs, and smartphones). In Malaysia 47 per cent of consumers have multiple handsets.

Expanding and evolving use of connected devices will present “vast opportunities” to engage with consumers, Nielsen’s telecom and technology practice director in Southeast Asia, North Asia and Pacific Sagar Phadke says. “Mobile-commerce is already a developed habit” in Japan and Korea and he predicts other markets will follow.