In our hyper-connected digital world, an omnichannel marketing approach helps brands bridge the gap between online and offline consumer behavior. But driving an effective multi-touchpoint strategy has its unique challenges – and oftentimes, our strategies are only as effective as what we know about our customers.

In particular, customer location data has emerged over the last decade as a wealth of information for marketers, providing a digital footprint of where customers are spending time and how they interact with brands – both online and offline. From offline attribution to geo-targeting, location data can help marketers understand the bigger picture of the customer journey. But while location-based marketing can be a powerful strategy for marketers, it can also be a bit of a black box.

Here we dive into what location-based marketing is, how it works and what marketers need to consider, from privacy to targeting, to make it consumer-friendly and effective.

In short, location-based marketing is targeting audiences based on where they are or have recently been.

“This can range from targeting users who live in particular zip codes, to targeting devices that tend to visit particular locations such as coffee shops, auto dealers, etc.,” said Frost Prioleau, CEO and co-founder of location marketing agency Simpli.fi.

Location data can reveal a trove of information about a customer’s daily travel routines (such as commutes), recurring shopping habits (like grocery shopping or gas station stops), restaurant preferences, and even online-to-storefront purchasing behavior. The data allows for more personalized targeting for the products and services customers might care about and enables more efficient ad targeting and budget allocation for marketers.