Locaid CEO, Rip Gerber, recently sat down with Derek Johnson, founder & CEO of Tatango  to talk about the explosion of mobile marketing over the last couple of years. Tatango is an interesting company in the SMS marketing space. I’ve been speaking with  Derek and his company for a few months now and have been impressed with their early market traction with location-based SMS campaigns.

During the conversation Derek asked me to pull on the experiences Rip has had as CEO of Locaid in location-enabling SMS marketing campaigns for our customers including the recent geofence pilot we ran with Alliance Data.

The full Tatango blog and Rip's answers can be found here - Top 10 Most Commonly Asked Location Based Mobile Marketing Questions.

#1 What is mobile geofencing?

Mobile geofencing, which is sometimes called Geotargeting, is a location-based service (LBS) where layers of location intelligence allow a brand to make decisions or take some action based on a geographical area of an SMS subscriber. Mobile geofencing isn’t a new technology either, and as our society becomes increasingly mobile, developers and brands are realizing the added value that mobile geofencing can bring to their SMS marketing campaigns.

#2 What’s an example of an SMS campaign using geofencing?

Creating a geofence for an SMS campaign will allow a brand to tailor SMS promotions to an SMS susbcriber’s real-time location, increasing SMS marketing open rates and SMS redemption rates. For example, Locaid recently powered the technology behind a location-aware SMS marketing campaign for Easton Mall, in partnership with Alliance Data.

The SMS campaign was targeted at cardholders of select branded credit programs, which ran from Black Friday to New Year’s Eve in 2012. The SMS geofence was created around Easton Mall in Ohio and was designed to trigger an SMS text promotion to SMS subscribers when they were within a predetermined proximity of the mall.

The SMS promotion encouraged SMS subscribers to use their store-branded credit cards for a chance to win a shopping spree at one of the participating retailers. Following the pilot SMS program:

• 39% of SMS subscribers said that the location-based mobile marketing campaign influenced their purchase decisions.
• 37% of SMS subscribers said the SMS promotions influenced them to visit a specific brand within the mall.
• 68% of SMS subscribers indicated they would sign up for future location-based SMS promotions.
• Card holders that received the location-aware mobile marketing messages spent on average 24% more in a shopping trip than the average card holder that didn’t receive the location-aware SMS promotions.

#3 How do you determine where SMS subscribers are located?

As I said earlier, a mobile geofence is a layer of intelligence that allows you to make decisions or take some action based on a geographical area. A mobile geofence can circle anything, or any area, such as a retail store, a stadium, or even a neighborhood. Locaid uses a Network-based Geofence, which uses carrier-grade location data to determine where SMS subscribers are located. You can see an example of this below, where this SMS subscriber is 22 miles outside of the geofence that Starbucks had setup for their Mountain View store location.

#4 Do customers have to opt-in first to receive location based SMS messages from a brand?

Yes. The number one rule for location-based marketing is that you need permission to locate a mobile device. Permission can be obtained in multiple ways, from customers replying to a text message confirming they want to share their location with a brand (see below for an example), to customers giving permission within a web opt-in form that captures their mobile phone numbers.

#5 Once opted-in, is this technology always tracking SMS subscriber locations?

Not with network-based geofencing– it’s simply not required. The correct way to use a geofence for an SMS campaign is to use it as an additional data point for your SMS subscribers in order to send locally-targeted, relevant content. This will then increase SMS redemption rates, and thus the return on investment on any SMS campaign. For example, with location-aware SMS marketing, restaurants only need to look up the location of their SMS subscribers once a day around happy hour if they’re interested in sending SMS promotions to increase traffic during happy hour, as they would only focus on sending promotions to those subscribers within the geofence during that specific time.

#6 How accurate is the SMS subscribers location?

Locaid advocates the use of network-based mobile marketing geofences that uses carrier-grade location data to pinpoint the location of an SMS subscriber.

Accuracy depends on a number of factors, including whether the SMS subscribers’ wireless carrier supports the use of A-GPS location capabilities, which are extremely accurate in outdoor environments, to less accurate options for mobile phones that use G-CID, Cell ID and Enhanced Cell IDs, which will produce a mobile geofence location accuracy ranging from one to five city blocks, or 100 – 5,000 meters.

Other considerations that affect location accuracy of an SMS subscriber include the wireless carrier network technology, including GSM, UMTS, CDMA, HSPA, and LTE deployments, in addition to the topography of the area, such as if the SMS subscriber is in a dense urban, suburban or rural area.

#7 How big or small can the geofence around a business be?

A geofence for an SMS campaign can be as big or as small as the business wants. The size of the geofence depends on the SMS campaign requirements and the expected accuracy of the underlying location method that will be used i.e. A-GPS VS G-CID, which we discussed above. A business can also create multiple SMS geofences, which would be useful if they had multiple locations. 

#8 Can we create an SMS geofence based on a city, state or a zip code?

Yes. The best use case here is for online gambling where location data is a key requirement for any wage-taking gaming app, or mobile lottery. Obtaining approvals from regulatory agencies and gaming testing labs require that a users physical location within a state or territory with legalized online gambling be verified to allow bets to be placed. GPS location can be easily spoofed, and wifi or geoIP are insufficient to provide validated location beyond country level. Network location accuracy, reach and un-spoofability make it a requirement for authenticated, verified location compliance.

#9 Does this technology work on all mobile phones, carriers, and all plans?

With network-based Geofencing you can reach 100% of your SMS subscribers regardless of mobile phone type, carrier or plan. Locaid has the widest reach in the industry and can locate over 400 million mobile phones across the US and Canada through our unrivalled relationships with the tier 1 and 2 wireless carriers. The best part is that adding location based targeting to an SMS campaign doesn’t cost SMS subscribers any additional money, as the only costs are to the brand sending the SMS messages. 

#10 How much does it cost to add this type of capability to an SMS campaign?

The costs for adding a network-based geofence to an existing SMS campaign depends on how often a brand wants to lookup the location of their SMS subscribers, so pricing can vary. It’s also very easy to increase or decrease how often an SMS subscriber is located, which can be adjusted based off the results a brand experiences. The best part is that this type of technology can be implemented on existing SMS campaigns with only a minimal amount of work.