Location-based marketing is still largely misunderstood. The vast majority of applications trigger an ad or campaign based on the position of the blue dot on your phone, without much in the way of context, segmentation, or an understanding of the actual retail or travel location you’re visiting.
Today, a location-based marketing startup, HYP3R, has announced $17 million in funding, with participation from Structure Capital, Rokk3r Fuel, Thayer Ventures, Silicon Valley Bank, and other strategic investors, including Day One Ventures.
So what is HYP3R, and how does it work?
“HYP3R is being used by advertising partners and brand marketers to reach new and retain existing customers,” CEO and cofounder Carlos Garcia told me. “First, we enable companies to reach their highest-value customers with marketing opportunities that are welcomed by consumers. This is done by leveraging location data from hotels and retail locations around the globe. Second, we make it very easy for brands to connect with shoppers and guests while they are on location — reaching out to them, building relationships with them, and sharing content from brand ambassadors. Research shows that customers are much more likely to purchase from brands that engage with them through social channels than those that don’t.”
While that sounds like the traditional use of location-based marketing, HYP3R has other tricks up its sleeve. Where it becomes particularly useful is when the platform provides users with data on where existing customers may be migrating to competitive businesses. And it can be help identify a company‘s highest-value consumers.
“We have been able to help companies like Marriott International, 24 Hour Fitness, and Brookfield Properties identify brand advocates and better understand the makeup of their customers,” Garcia said. “We have also been able to link revenue to social activity at company venues. Most importantly, however, we have helped organizations double their marketing efficiency by lowering the cost of reaching and acquiring new high-value customers. HYP3R facilitates this by identifying people most likely to welcome specific opportunities.”
Earlier this year, HYP3R graduated from Salesforce Accelerate and was named one of the World’s Most Innovative Companies by Fast Company. That link with the world’s most incumbent CRM — still a $120 billion a year industry — is essential.
“Location is the next frontier of the marketing cloud,” Garcia said. “Up to now, location has been a fairly primitive tool in a marketer’s toolkit. But companies with physical locations have an advantage over digital-only disruptors. That’s because consumers’ interests have shifted from accumulating things to seeking out exceptional experiences. As a result, location plays an increasingly important role.”
Unlike other geofencing platforms that focus on retail businesses, HYP3R extends to travel industry locations and even moving targets. The platform geofences hotels, casinos, cruise ships, airports, fitness clubs, stadiums, and shopping destinations across the globe.
So what’s next for the company?
“HYP3R is building a global network of locations to reach the highest-value consumers in the world,” Garcia said. “The more locations we can geofence, the better we’ll be able to help our partner companies identify consumer interests and match them with location-based opportunities. In travel, for example, we can already use location data to help our partner companies know how many of their guests are also visiting competitors and which travelers prefer luxury.”
Pairing location and geofence data with consumer intent delivers significant upside for marketers.
“We look at evidence of behavior,” Garcia said. “Aside from purchase data, location data provides the strongest predictor of future behavior. Also, HYP3R surfaces behavioral trends in different industries to help companies know what people care most about. This enables brands to tailor offers so they are welcomed by consumers.”