Location-based mobile advertising enters a new era

Location-based mobile advertising. There’s been a lot of talk, but not a lot of action with only a few brands taking advantage of the tool to drive footfall into their stores.

But if a new experiment from North Face takes off we could see a significant uplift in the practice.

The outdoor apparel retailer is to send mobile users text messages whenever users are near a store – the first time the brand has targeted customers depending on their physical location.

The tech involves ‘geo-fencing’, which draws a virtual perimeter around a particular location, and is being managed by Placecast, a location-based mobile ad company in San Francisco.

In urban areas, the fences are up to half a mile around stores, and in suburban areas they are up to a mile around stores. When a mobile user enters the geo-fenced area they receive a text message is sent -  but only if they have opted in to receive messages.

Placecast uses the phone’s GPS signal and location data provided by carriers to companies to determine the location of users.

For now, according to the New York Times, the North Face will send texts about promotions, like a free water bottle with a purchase, and new arrivals, because the company’s gear is heavily seasonal.

A text message might say, for example, “TNF: The new spring running apparel has hit the stores! Check it out @ TNF Downtown Seattle.”

But as things develop, the retailer plans to eventually send branded texts when people arrive at a hiking trail or mountain to alert them about weather conditions or logistics for a ski competition.

According to Forrester Research advertisers are projected to spend $561 million on mobile this year and $1.3 billion by 2014. And location-based marketing will play a major role.

North Face’s experiment has set a new benchmark for mobile advertisers and others brands are jumping on board with five more companies working with Placecast on similar campaigns.

Our lives may never be the same again. So next time you leave a gig and receive a message from a local restaurant, you’ll know why.