Location-based advertising

Location-based advertising (LBA) is a new form of advertising that integrates mobile advertising with location-based services. The technology is used to pinpoint consumers location and provide location-specific advertisements on their mobile devices.

According to Bruner and Kumar (2007), "LBA refers to marketer-controlled information specially tailored for the place where users access an advertising medium" (p. 2).

There are two types of location-based services in general, i.e. push and pull.

The push approach is a more versatile approach and is divided into two types. A not requested service (opt-out) is the more common approach amongst the two approaches, as this allows advertisers to target users until the users do not want the ads to be sent to them. By contrast, using the opt-in approach the users can determine what type of advertisements or promotional material they can receive from the advertisers. The advertisers have to abide by certain legal regulations set in place and respect users' choices.

In contrast, using the LBA pull approach, users can directly search for information by entering certain keywords. The users look for specific information and not the other way around. For example, a traveler visiting New York could use a local search application such as WHERE on her device to find the nearest local Chinese restaurant in Manhattan. After she selects one of the restaurants, for instance, a map is provided as well as an offer of a free appetizer good for the next hour. (Steiniger, Neun, and Edwards, 2006, p. 5)

Location-based advertising is closely related to mobile advertising, which is divided into four types:

For push-based LBA, users must opt-into the company’s LBA program; this would most likely be done via the seller's website or at the store. Then users would be requested to provide their personal information, such as mobile phone number, first name, and other related information. After the data are all submitted, the company would then send a text message requesting users to confirm the LBA subscription. Once these steps have been completed, the company can now use location-based technology to provide their customers with geographically based offers and incentives.

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