Location-based advertising utilises the data from an individual’s mobile device to serve personalised advertising, relevant to that area. This has become more viable as more smartphone users are allowing apps to track their location and the accuracy of the data being collected improves.

A good example of location-based advertising is a campaign by Starbucks which was run at the end of 2014: by tracking users’ locations in London, the company was able to send push notifications with personalised discounts for the customer’s most purchased drink when they were near Starbucks cafes. Measuring the uplift in store visits, Starbucks claims that recipients of a location-based ad, were almost 100% more likely to enter a cafe.

For brands and retailers that operate bricks-and-mortar outlets, the benefits of location-based advertising are clear to see. The first and most obvious is an increased level of personalisation, allowing marketers to create targeted and more relevant ads. One way to make an ad more relevant with location data is to adjust the ad’s copy to match the dialect of the recipient’s location. Another study by the IAB revealed that 46% of people who blocked ads said that they did so because they found them mostly irrelevant. This illustrates that today’s consumers are fed up of being pummelled with general advertising that doesn’t match their interests, demonstrating how important targeting is.

Another strength of location-based advertising is that it’s delivered in real time, allowing marketers to reach consumers at the specific moment when they are most likely to spend. For example, a discount received by a customer when they are within walking distance of a shop has more value than if they had received the same discount hundreds of miles away from the nearest branch.

Location-based marketing does however come with some challenges. It’s getting easier as the technology improves, but it can still be difficult to deliver the right ad to the right person at the right time. Additionally, because of its reliance on accurate data, any incorrect information stands out, not only lessening the impact of the Ad but also possibly causing the recipient to disengage from the ad completely.

Although people are more accepting of the numerous ways in which they are tracked on their smartphones, some still find ads that know their interests and location invasive and off-putting. It’s worth carefully considering whether or not location-based advertising is suitable for your target audience.

Whilst location-based advertising isn’t suitable for every brand or audience, it can be an extremely effective method of serving highly targeted ads to your customers. If you haven’t considered it yet, it might be worth investigating, as 2016 could be the year that location-based advertising comes of age.