By Keat Foong, Executive Editor
The growing use of smartphones among all segments of the population paves the way for the emergence of a form of marketing that is still brand-new in the apartment industry: “geomarketing” (or “location-based marketing”). This term refers to marketing that is based on the target viewer’s geographical location. In a broader sense, geomarketing is one form of “mobile marketing,” and some say it will become prevalent in the industry very quickly. In fact, according to CMO of 44Doors Tim Hayden, “everyone in the apartment industry will be grappling with mobile marketing within the next 18 months.”
The forecasted rise of the use of geomarketing in the apartment industry is driven by the radical increase in the use of smartphones across the nation. Smartphone use in the U.S. now accounts for 40 percent of all phone users, according to Nielsen in its latest report. And the use of smartphones is forecasted by experts to surpass that of feature phones by 2015. According to Nielsen, as of Jan. 12, 48 percent of all mobile phone users now have smartphones. This is an increase of 36 percent over 2011, preceded by an increase of 23 percent in 2010.
“The ubiquity and universalism of mobile devices will force everyone in the marketing world to learn how to reach out to and message consumers on the go,” said Hayden. “This is a bigger game changer than either the Internet or social media. It will change the rules of how we as consumers buy products and how businesses reach us.”
To underscore the sweeping changes that are occurring, Hayden notes that because of the relative affordability of data plans, many Hispanics and African Americans are now foregoing desktops and laptops altogether in favor of smartphones. At the end of the year, he noted, smartphone plans combining both phone and Internet services may cost less to these consumers than maintaining those services separately on both a desktop/laptop and a mobile phone.
Geomarketing takes advantage of the fact that not only is the smartphone in the pocket of the target customer 24/7, but that it can also track the location of the consumer at any point in time. Businesses are still figuring out new methods to market to the audience via QR codes, short-urls, text, email or mobile webs given the geographic tracking ability and mobile features of the smartphone.
Mike Whaling, president of 30 Lines, thinks geomarketing definitely has applications in the apartment industry. Other industries are already using geomarketing in various ways, which may or may not be transferable to multi-housing use. Whaling says that one form of geomarketing, “geofencing,” involves sending the target audience a text message or email when it comes within a certain geographical range, for example, one mile of the apartment property.
In the retail industry, for example, shoppers walking into a mall may be sent a text message saying “Come to the Gap for 20 percent discount.” Conceivably, visitors to apartment search guides can sign up to receive text messages when they come within range of a property in the company’s portfolio. The text message can invite them to set up an appointment to tour the property.
Another geomarketing vehicle that is becoming popular involves location-based services such as foursquare or localmind. Facebook and Google offer similar capabilities. There are two ways in which these services can be used, notes Whaling. In return for incentives, apartment residents can be encouraged to check into the property to let their friends know they are there. “This is a way to get your residents to put your name out there on your behalf,” says Whaling. “They are also saying, ‘These locations are okay because I am checking in.’”
Whaling recommends another method through which location-based services can be used by apartment companies: setting up a business page on Foursquare. Residents who sign up on the company’s page will be sent “tips” on their smartphones about local stores and businesses they visit. “If I follow a brand page and go to the restaurant, I will receive a notification that the company has left a tip, ‘try this special drink or talk to the bartender, you will not regret it’. It is a way to put the name of the community out there and an interesting way to become a resource for people in the neighborhood,” explains Whaling.
Finally, Whaling says, advertising that is tailored to the geographic location of the viewer and that takes advantage of mobile phones is an important form of geomarketing. These types of advertisements may include a QR code. When the code is scanned into a smartphone, the viewer will be connected to a mobile website that will be customized according to the viewer’s location. Whaling thinks there are rich opportunities for the apartment sector presented by this form of advertising.
“The user standing, for example, at a bus stop can scan a QR code and be directed to a website containing information specific to an apartment community down the street. The marketing message can be ‘Hey, you know you are only steps away from your next apartment.’ The message can be really compelling,” says Whaling.
As far as expenses are concerned, Whaling says mobile marketing is reasonably low-cost. To create and manage QR codes is very affordable, and to sign into location-based services such as Foursquare is, of course, free. Eric Brown, president of Urbane Apartments, who has employed mobile marketing among other cutting-edge and creative marketing ventures, agrees.
Brown knows many local bartenders, and Urbane Apartments has left tips informing bar customers to greet the bartender and mention the apartment community’s name. “We don’t know completely how effective these tools are, but many of them do not cost anything,” says Brown. “And at the least we get the name of the apartment in front of people. The more people talk about you, the greater the chances you are front and center when they need an apartment.”
One point to take note of when employing mobile marketing is that some smartphone users may not like an inundation of unsolicited marketing messages. “It is very important to remember that people do not want to receive a lot of marketing messages on the phone unless they ask for it,” notes Whaling. Thus, mobile marketing often begins with an “opt in” by the user. On the company’s advertisement, website or email, they can, for example, return a text message, scan a QR code or download an app that gives permission for the apartment company to track their GPS location.
44Doors’ Hayden says that outdoor advertisements—banners, billboards, display ads—have been transformed by the development of the smartphone into “mobile touchpoints.” These geomarketing touchpoints can be thought of as “intercepts” that should be taken advantage of in a very abbreviated and to-the-point manner, Hayden advises. “People do not have as much time on their mobile devices. They are sitting in a coffee shop or bus stop, so you have to be very quick in the information you deliver to them and ask from them,” he notes.
Rather than force the viewer to wait for a video to upload when they arrive at the website, advises Hayden, the viewer should be asked quick questions such as “what part of town do they live in, when do they plan to move, would they like to tour the property? Capture their email address and immediately respond to them via email.” The time that viewers spend using their handheld devices on the website is also an opportunity for the company to ask for their GPS location, adds Hayden.
In his first use of a QR code, Brown did direct viewers to a video—albeit not one regarding the community. Rather, it was an entertaining video for new move-ins that spoofs the hassles of moving, offers the resident a free pizza and directs them to call the pizza franchise with which Urbane Apartments has partnered. “Anytime you use a QR code, there has to be a surprise at the end,” says Brown. “You’re asking someone to take 30 or 40 seconds of their life to look at something.”
The QR code and video were created in-house at no cost to Urbane. The QR code was contained inside of a pizza box which contained paper plates and napkins and was placed on top of the stove. In a win-win arrangement, Urbane has an agreement with the pizza company to share in revenues after the 40th call from the community each month. Residents who watch the video and call the pizza company (through a dedicated home number) are more likely to enter the store’s phone number into their cellphones and call them in the future when they need to order pizzas, noted Brown.
As Brown and Hayden agree, geomarketing is merely one additional marketing tool for the apartment owner, but it can greatly expand the apartment company’s marketing reach. According to Hayden, “It’s not just a trend or a fad. It’s here to stay.”