Pokémon Go, augmented reality and the future of local marketing

Yesterday, as I was walking back from lunch, a middle-aged businessman stopped in front of me and took a picture of a dumpster with his smartphone — or at least that’s how it must have appeared to those uninitiated into the world of Pokémon Go. But I knew better, for at that moment, I happened to be playing the game myself. The businessman finished capturing his Pokémon, looked up at me and smiled sheepishly before scurrying off in pursuit of his next digital quarry. That’s when it occurred to me: The world of local marketing has fundamentally changed.

For those of you who have yet to play the game (and as such, still have some semblance of control over your life), let me give you a brief rundown of the magical app that has kids, teenagers and adults alike lurking in nearby parks after midnight just to catch a few extra Pokémon.

The freemium game uses your phone’s GPS and camera to turn the real world into a digitally augmented world teeming with wild Pokémon. To get started, you’ll need a smartphone and a good pair of walking shoes, because you’re going to have to leg some miles. After downloading the app, players (called “trainers”), wander aimlessly through urban jungle and countryside alike in search of little digital monsters known as Pokémon.

You use the map on your smartphone to navigate, and as soon as you feel your phone buzz, look alive, because a Pokémon or a location of interest is nearby. If you corner a Pokémon (or should I say, if you walk toward them), the screen on your smartphone, with the help of your phone’s camera, will seemingly project the digital creature onto the physical world. Move the camera on your phone side to side, and the creature will remain fixed to a given spot. Then, in a quasi-Fruit-Ninja move, you proceed to flick Poké Balls at the creature on your screen to capture it.

Now, here’s where it gets interesting — at least from a local marketing standpoint. The game includes places called PokéStops (where users can stock up on accessories and tools needed in-game) and Gyms (places where users go to train their captured Pokémon and fight them against other players). These virtual locations are paired with actual real-world landmarks. These real-world landmarks could be anything — a graffiti mural on a wall, a large tree in a park or the friendly confines of your local McDonald’s. See what I’m getting at?

Right now, if your store happens to be one of the lucky locations that has a PokéStop or Gym nearby, you’ve undoubtedly noticed a surge in foot traffic as Pokémon Go players wander in. Although the game is still being rolled out globally (It’s expected to hit Japan today), the app already boasts over 30 million downloads and more active users than Twitter. Oh, and I should mention that the game hasn’t even been out for a month.

As the popularity of Pokémon Go and augmented reality continues to soar, marketers are dying to get their hands on the popular app for advertising purposes. Fortunately, Niantic, the company that developed the game along with Nintendo, has already announced it intends to do just that through “sponsored locations.” Soon, brands will be able to make their own business locations PokéStops and Gyms, ushering in hordes of gamers to actual physical locations. To become one of these sponsored locations, no doubt brands will pay handsomely.

So what’s a local marketer to do? We’re still in the early stages of augmented reality going mainstream, but here’s what you should be on the lookout for in the near future.

Access to data

Up until this point, getting users to share their data with you has been about as easy as getting them to pay you free money — which, essentially, is exactly what we’re asking them to do. But along comes Pokémon Go, and lo and behold, gamification has blown the doors wide open to user data sharing in a way that no amount of a brand asking “pretty please” has so far produced.

Granted, there has been a pushback on Niantic’s unprecedented access to user data, but I’m willing to wager that if Niantic drew a digital line in the sand and said, “Share your location data or else,” more than a few users would be willing to cross that line and give up some of their privacy in order to catch ’em all.

Branded PokéStops and Gyms

The most immediate marketing opportunity will be for brands to purchase Gyms and PokéStops. So if you’re currently playing the game, don’t be surprised if you start seeing things like McDonald’s McGym and the 7-Eleven PokéStop. Branded locations in the game might be the key to driving hungry customers to your restaurant or cross-country travelers to your gas station.

However, sources at Niantic have said that branded content is also in the works for Pokémon items. Users would need to travel to promoted locations to receive unique in-game content, hopefully making a few purchases while they’re at it.

However, an even more exciting marketing opportunity might be lurking just around the corner, and if it comes to fruition, might usher in a whole new domain of PPC: lures.

Lures: time and location constraints

Pokémon has a feature that allows users to drop a “lure” module at a given PokéStop. The lure makes Pokémon spawn at a much faster rate than normal for half an hour. The result: Pokémon trainers come running.

As of right now, it’s not very expensive for a business to purchase one of these lures and set it off right outside their front door. But don’t be surprised if these lures start becoming more expensive, at least for businesses. Likewise, don’t be surprised if you start seeing a varying degree of strength for these lures, their power and reach increasing by the rate at which you pay.

But there’s a potential problem. If every business purchases a PokéStop, and all of them set off lures outside their shops, it effectively negates the value of a PokéStop, because consumers wouldn’t need to concentrate in any given area to get their Pokémon fix. You can be quite certain that Niantic won’t let this problem happen.

Which brings us to uncharted territory: You soon might see bidding for lures for a given geofence, but more importantly, for a given period of time.

Here’s how that might play out. Let’s say a restaurant wants to lure hungry Pokémon users to their location at lunchtime, so they’re looking to purchase a lure from noon to 12:30. Unfortunately, the restaurant across the street has the same good idea. With PPC, these restaurants would be competing against each other to serve ads for a given area, but in general, they’re bidding on ads in related search categories.

Not so with lures. In order for a lure to be effective, there needs to be only a handful of lures within a given area. As such, the competition for lures won’t be between just these two restaurants, but between all businesses of all types who want the lure for a given period of time — all within the same vicinity. And so, a new type of bidding war begins.

At this point, location and time bidding for lures is all hypothetical. But it’s easy to see how the budding industry of augmented reality could quickly head in that direction, and not even just for Pokémon Go, but with all subsequent games it spawns.

Virtual billboards: ownership of the virtual space overlapping the real world

At this moment, it’s hard to imagine a world in which augmented reality takes off beyond the realm of video games. But once augmented reality becomes truly ubiquitous, brands will figure out how to start making virtual billboards. And then all bets are off.

Let’s say you’re a restaurant brand that wants to steal customers away from your biggest competitor across the street. As such, you drop a 20-foot cheeseburger right outside the front door of your competitor’s location — in augmented reality, of course — complete with a 20-percent-off coupon for your own restaurant. Now, when a customer with an augmented reality app walks up to your competitor’s restaurant, they feel a buzz in their pocket, pull out their phone and quickly make a beeline across the street to buy from you.

If this seems far-fetched, it’s not. Yelp already has something similar to this with Monocle, which allows you to read the star rating reviews and the distance to nearby locations, completely unobstructed by whatever physical barriers lie in your path.

And so, just like that, we’ve entered an entirely new world of location ethics in which we’ll need to figure out who owns the rights to the virtual space that overlaps the physical world.

Geoprecision: The key to unlocking augmented reality

What should local marketers be doing to prepare for the augmented world to come? The number one thing I recommend is that brands ensure that their geolocations are precise. I’m not just talking addresses here; I’m talking about precise geocoordinates down to the last foot.

The difference between dropping a lure inside your department store or in your parking lot might be a few feet, but because customers are coming to a given location to play a game, not purchase from your store, a few feet might mean the difference between a sale and a lost customer. Therefore, it’s critical that local marketers remove as many barriers to conversion as possible, and that all starts with geoprecision.

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