Proximity: The 5th ‘P’ of Marketing

The marketing mantra for decades has been some variation of promote the right product, in the right place, at the right price, at the right time — the "4 Ps of Marketing." However, with the rapid growth of hyperlocal mobile advertising in 2014, brands and retailers added a 5^th "P": proximity.

As 75 percent of retail users notice mobile ads, and 21 percent of smartphone and tablet users click on these ads, smart retailers are using hyperlocal mobile advertising to ease and guide shoppers’ path to purchase. Moreover, with shopper foot traffic to brick-and-mortar stores experiencing a downward trend, it's these location-aware mobile ads that are driving shoppers back into physical stores.

Proximity Marketing Drives Shopper Action
With the rise of programmatic advertising — i.e., the automated buying and selling of mobile ads via real-time bidding to match ads to an audience's location — guiding shopper behavior in the real world has never been easier or more affordable. Any retailer can easily purchase mobile ad units across any publisher, website or mobile app, in real time.

Traditionally, brands have purchased and pushed mobile display ads to raise brand awareness. Today, armed with detailed inventory, pricing and location information, proximity ads go beyond awareness and drive shopper action, typically guiding a shopper to the nearest brick-and-mortar store. For instance, a proximity mobile ad can contain a brand logo, the retailer where the brand can be found, the retailer's address and a small map with the retailer's location, which all together ease the shopper's path to purchase.

Proximity Targeting Maximizes Revenue
While broader outreach via programmatic advertising has proven effective, proximity targeting takes programmatic to the next level by pinpointing shoppers who are most likely and able to impulsively take action. Consumers can be targeted by "practical impulse factors" such as road logistics, historical shopper flow patterns, location of competitive stores, and distances shoppers will travel; or they can be targeted by "audience and contextual factors" such as rural vs. suburban, residential, commercial, and household demographics. Any real-time factor can be used to drive impulse shopper behavior.

Aligned with proximity targeting, dynamic ad triggers or proximity triggers can also be initiated to generate more foot traffic in physical stores. Examples of triggers include the following:

• new inventory in-store (e.g., a new product or collection arrives)
• new prices in-store (e.g., a sale on paired products)
• transactions in-store (e.g., sales below forecast, generate more foot traffic)
• environmental factors (e.g., pollen counts or snow, allergy meds or shovels offers).

Furthermore, to maximize revenue while minimizing discounts, shoppers can be sent different promotions based on the effort required for them to visit one of your stores. For instance, if a shopper is near the store, they may receive a 10 percent discount offer; if a shopper is further from the store, they may get a 30 percent discount offer. These ads can be dynamically adjusted to ensure the retailer has the optimal ratio of foot traffic to on-duty staff.

Beacons Put Proximity Marketing Into Overdrive
In-store beacons will further accelerate proximity marketing and contextual messaging opportunities. Beacon-triggered messages are personal by their very nature, as shoppers choose to download a designated app onto their phone through which they receive them. These aren't pop-up or push notifications without any context, but instead are highly personalized, location-aware and app-specific messages — a way for brands to target shoppers where, when and how they want to be targeted, down to the aisle.

With beacons and any proximity marketing ads, accurate product inventory is crucial to making retailers’ promotions work. Without visibility into a retailer's inventory, a brand is more likely to send messages containing out-of-date information and out-of-stock items, resulting in shopper frustration and perhaps even prompting the shopper to delete an app, which can impact all future communication.

As brands and retailers continue to strive to meet customer expectations by bridging the online and offline experiences, proximity marketing will play a huge role in this effort. The fifth "P" of marketing delivers a true win-win because it enables shoppers to be reached where, when and how they want to be reached and drives much-needed foot traffic (and purchases) to brick-and-mortar stores.

Jeremy Geiger is the CEO of Retailigence, a hyperlocal marketing platform providing customer application usage data to retailers and brands.