The next time you walk by your favourite store, you may get some kind of message from it, running down its latest deals. Or you might get an ad from its competitor across the street, or from other brands in the same industry.

So what’s prompting this kind of advertising? The name of the game is location-based marketing, which targets consumers based on their whereabouts through their smartphones, as long as they’ve opted into sharing their location. While this hasn’t become a huge trend in Canada as of yet, it’s on its way, and EQ Works has been one of the first companies in the Great White North to tap into more advanced location-based data.

Based in Toronto, EQ Works is a digital marketing agency that helps other companies with their media buying. The company is the first in Canada to partner with Factual Inc., a U.S.-based startup that has supplied location data to the likes of Bing, Yelp, and Groupon and has served as a cornerstone for a broad swath of location-dependent entertainment, restaurant and hotel apps.

Announced earlier this month, EQ Works plans to tap into Factual’s location-based targeting prowess, says David Katz, EQ Works’ executive vice-president of corporate development.

“I describe it really as a shift from mobile 1.0 to mobile 2.0. For quite a while now, we’ve been doing location-based targeting in terms of geo-fencing, or drawing polygons around businesses and locations,” he says.

That was all good, but EQ Works was having trouble scaling out the number of locations to target. For example, before now, if a business approached EQ Works for help in serving ads in one location, that was no trouble. But to serve ads to mobile users at all of their competitors’ locations in Canada or the U.S., or to target mobile users who are likely to visit a specific type of store – that was a different story.

“As marketers wanted to take all these great tactics that they’re used to from the offline world, and bring them to mobile and online, there were very few companies that could provide that kind of data,” Katz says, adding it used to take his company days to build a list of exact locations for targeting purposes.

And while he and his team noticed that Apple’s iBeacons were starting to make headlines, the option was less alluring to them as they didn’t want to be dependent on consumers downloading apps and accessing Wi-Fi to get access to their locations.

That’s where Factual came in. For EQ Works, Factual represented an attractive opportunity due to the sheer number and range of locations it has on file. Within its Global Places database, the startup has stored data on more than 65 million local businesses, plus points of interest, located in about 50 countries. So what used to take EQ Works days is now done in just seconds, Katz says.

Factual is mostly focused on the U.S. and China, with data on just two million locations and businesses here in Canada. But that’s still a good number, especially as it enables marketers to target audiences by highly customized ways of segmenting, says Vikas Gupta, director of marketing and operations at Factual.

For example, Factual can segment audiences based on their behaviour, taking categories like travellers and narrowing people down into segments like business travellers, leisure travellers, frequent travellers, and so on. From there, advertisers can target those segments based on typical consumption patterns, while adding in geographic segments like cities, postal codes, and so on, Gupta says.

“Once you add in that element, there are thousands of possible segments that really, as a marketer, you can pick and choose combinations of those segments, so the number of permutations gets into the billions, if not higher,” he says.

Being able to reach such narrow subsets of people is a huge boon for marketers. However, Katz concedes there will always be consumers who are wary of sharing their location with marketers and brands, and who are intent on guarding their privacy.

But as location-based targeting becomes more commonplace, consumers may embrace it, depending on how marketers execute on their campaigns, he says.

“Permission isn’t just permission at the outset,” Katz says. “It’s important to provide consumers with an opportunity to opt out, and I know Factual does that, as we do … But does it feel a little too Big Brother for them? I think it really depends on the trust between the app and the consumer.”

For example, if a user wants to find restaurants nearby, it would make sense to share location data with an app. But if a user is just installing a calculator app, it shouldn’t demand that kind of information, he adds.

Ultimately, he expects an increasing number of Canadian marketers to start exploring the possibilities of targeting by location. Among EQ Works’ clients, there’s already been some interest in using Factual’s location data to power their campaigns.

“For us, it was a matter of getting data we can use at scale today, that didn’t require barriers,” Katz says. “ [Location-based targeting] is a rapidly growing market, and more and more CMOs and agencies and businesses have indicated they plan to incorporate mobile into their budgets … We think there’s a lot of room for growth.”

Correction: A previous version of this post indicated Factual works with Yahoo. It does not work with Yahoo. We regret the error.

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