LOCATION-BASED ADS MAY BE ‘CREEPY’

It seems logical from a marketer’s viewpoint. If you’ve managed to plant a “cookie” on a customer or prospective customer’s smartphone, why not serve up a relevant ad when the GPS feature of their phone shows that they are in the proximity of your store. After all, that’s one way that a bricks-and-mortar store can have an advantage over an online-only retailer. The problem, though, is that consumers don’t want marketers to know everything about them and some people say they are “creeped out” by location-based ads on their smartphones.

Privacy was the number one reason for not wanting to allow smartphone tracking by marketers, cited by 51% of the respondents in a survey by PunchTab. 13% cited “too many messages” and 8% irrelevant messages as why they didn’t want to be tracked. The overwhelming majority of people say no to having their phone s tracked by marketers—but 27% say they are likely to allow tracking if they get the right benefits from it.

Of the 27% who said they’d be open to tracking, 88% said the best benefit would be coupons or special offers from the merchant. 72% liked the idea of being able to shorten their checkout time; 69% welcomed alerts telling them that products they like are on sale; 58% wanted to get updates on their points or rewards in the merchant’s loyalty program; and 57% figured it would help to have data on the most appealing offers.

There are definite gender differences. Among women, millennials are the most receptive (34%) to tracking. But among men it was a much older demo, 50-65, who were most likely to allow tracking (28%), followed closely by those 34-49 years of age (26%).

As for which type of retailer the willing respondents might allow to track their smartphones, superstores were viewed positively by 84%, followed closely by department stores at 78% and grocery stores at 74%. Men were more receptive than women to being tracked by home improvement stores and sports stores.

Apart from the 27% who are already willing to allow some tracking, what would it take to convert the others? PunchTab found that of the 50% of respondents who were opposed to tracking, only 12% were likely to try it if they got a $25 coupon from the merchant for allowing tracking. That was the highest coupon value mentioned in the survey. The 23% of all respondents who were “on the fence” about tracking were more persuadable. The percentage willing to try tracking increase as the coupon value went up, eventually including half of them.

PunchTab, whose business is helping build customer loyalty, surveyed 1,153 U.S. smartphone owners. The survey was conducted in April of this year.