Location-based marketing helps companies target the right person with the right ad at the right time. To really understand the strength and power of location-based marketing, it’s important to know about its origins.

Here’s your guide to the past, present, and future of location-based marketing to help you understand where the industry has been and where we’re going.

Where It Started

Only a few years ago, the best location-based marketing had to offer was designated market areas (DMA). Each of the 210 DMAs in the United States focuses on broad sections of the country. For more populated areas, like San Diego, the DMA is fairly focused and covers the main city and the nearby suburbs. However, in some areas, like the Salt Lake City DMA, it covers the entire state of Utah, some of northeastern Nevada, and even some of southwestern Wyoming.

In some areas, DMAs worked great. A small company or business could advertise to their local DMA and know they were targeting the right audience.

However, other DMAs didn’t work as well. If a person in Green River, Wyoming, saw an ad about a company in St. George, Utah, they’d have to drive for about six and a half hours—one way—to get to the store location.

DMAs, while functional for larger brands, didn’t provide enough ROI to be feasible for smaller, local companies.

Where It's At Now

Advertisers saw that there were better options for location-based marketing and created two new ways of narrowing down areas: zip code targeting and geofencing.

ZIP Code Targeting

First came zip code targeting. On average, a five-digit zip code contains about 10,000 people. Compared to the wide-sweeping DMAs, this was a major step forward for local and smaller businesses. For example, local restaurants were finally able to target audiences surrounding their business and see a measurable increase in customers.

Additionally, companies could start researching the demographics of each zip code. This research helps businesses find and target specific audiences for their brand. While there are more targeting capabilities with targeting zip codes, location-based marketing is still limited.

Geofencing

Geofencing is the most recent addition in location-based marketing, helping it become even more precise for targeting specific regions. Geofencing allows businesses to create their own boundaries when advertising. For the first time, companies can create boundaries for their ad campaigns that are as broad as entire DMA regions or as small as a city block.

This gives every company access to the benefits of location-based marketing. No matter whether you’re a large brand or a small family-run business, you can create and design ad campaigns with your specific customers and clients.

The effectiveness of location-based marketing also increased with geofencing. Because there is much more control over who you are targeting, it helps ensure your advertising budget isn’t wasted on the wrong target.

Where It's Going

If we’re already targeting with geofencing and able to draw our own boundaries and lines around target audiences, how much more local can we get? The truth is, we can go even further.

Instead of just targeting city blocks and small geographic areas, it’s going to be possible to use location-based marketing at the household level. It will be possible to target individual addresses.

This opens a whole new door for opportunities in marketing. If you have customers who are part of your company’s loyalty program, you can target their addresses directly with information about your brand, new deals, and new products. This removes the guesswork of getting your ad campaign to your target audience, helping you to get the right message to the right people at the right time.

Be Part of the Future with Agility

At Agility we stay on the cutting edge of location-based marketing. We can help you increase the ROI of your advertising budget by targeting your audience directly.

The Agility Platform puts the power at your fingertips to create and modify the boundaries of your ad campaign yourself. Schedule your demo to learn more about the effectiveness of location-based marketing.