How Do Smartphones Broadcast Marketing Data?

You don't need us to tell you that smartphone usage has skyrocketed. This is a fact of modern life. You use your device every day—to communicate, to entertain, to navigate your way around town. Maybe you're even reading this article from your smartphone of choice. But when’s the last time you took a minute to analyze the chunk of aerospace-grade aluminum in your palm?

Because of their ubiquity, it's easy to forget how complex these compact machines truly are. Beneath their shatter-resistant glass touchscreens are the components that smartphones use to process and store massive amounts of information. In addition to a central processing unit and gigabytes of storage are chips dedicated to specialized functions. One of these is the Assisted GPS chip that allows devices to register location and orientation to high levels of accuracy.

The smartphone knows where it is at all times. Because of this, location has become a function of a business model— or, something of a currency. For example, location-specific information (including ads) can be served to users the second they enter a geofence. In his book Radical Technologies, author Adam Greenfield credits smartphones as "the first maps in human history that follow our movements and tell us where we are in real time."

Smartphones have unlimited potential. But with nefarious parties at the helm, they can border on too much power. In the marketing world, this is often because people don't understand the tools at their disposal. So, let's take a step back and look at fundamentals—including how smartphones broadcast and generate data.

How do smartphones broadcast marketing data?

Your smartphone is essentially a small radio. In its most basic form, it transmits radio signals to base stations that interpret them and send them back out into the world. Radio antennas make this transmission of data possible. Your smartphone has antennae that send and receive radio waves on cellular and WiFi networks. It has a Bluetooth antenna that enables short-range communication. And it has near-field communication antennae that allow interactions such as making payments.

This modulation of radio waves has evolved into a complex ecosystem. This is where things get interesting for marketers. Increased connectivity has enabled brands to target audiences based on current or recent locations. This can then be used to track daily routines, shopping habits, and restaurant preferences. And it allows marketers to deliver more personalized ads based on real-time data.

How do smartphones generate location data?

So, how do marketers get this data in the first place? Location data is collected in many ways, but it first needs a signal. We’ve already reviewed how GPS and Wi-Fi networks provide accurate location signals. Similar to these networks, beacons are small, wireless devices that send data between devices. Beacon marketing uses these small transmitters to send signals to smartphones via Bluetooth.

Regardless of the signal, devices also need an identifier to understand movement. Each individual smartphone or tablet has a device ID. This unique string of numbers and letters is stored on devices and used by marketers to track and identify specific users. User IDs uncover and organize behavior using identifiers such as geographic region. From there, marketers can test engagement based on creative, ad optimization, and more to improve the quality of ads.

How does location-based marketing work?

We've reviewed how smartphones broadcast and track location data. To bring it all home, let's review how marketers make the most of this technology. Perhaps you remember the buzz surrounding location-based marketing a few years ago. This is the concept of targeting customers with personalized campaigns based on proximity.

Location-based marketing allows brands to target consumers based on physical location. As we’ve outlined, mobile location technology—including GPS, WiFi, and beacons—enables marketers to serve up relevant ads. Ever see a promo for a detox green smoothie the minute you walk by a Tropical Smoothie? That's location-based marketing. It also continues to be an effective tool. In fact, nearly nine in 10 marketers said location-based marketing resulted in higher sales in 2019.

Location-based marketing can provide important insights into customer behavior. It can gauge customer behavior based on online and offline actions, demographics, interests, and more. It can help companies sell and promote contextual offers and discounts. And it can retarget existing customers to build brand loyalty.

Let's face it. All this tracking ability can be a little creepy in the wrong hands. If you've turned on the news recently, it's clear that the ethics behind data collection policies are being scrutinized. Growing concerns over data privacy have led to regulatory legislation, including the GDPR in the European Union and the California Consumer Privacy Act (CCPA) in the United States.

Without diving too deep, it's important that marketers assess their current data collection strategies. Ensuring compliance is essential these days. At the very least, marketers must understand how audiences are created—and how consumer privacy is protected. No matter how you cull location marketing data, it's important that your consumers know they've opted-in. Striving for transparency can only help build brand loyalty. Because as we start another chapter in data privacy regulations, it'll pay off to be in good standing with your customers.

Learn how to make the most of your marketing data.