Location-based marketing offers the opportunity for marketers to cut through the daily bombardment that consumers are subjected to, delivering communications straight into the pocket of their customers as they quite literally walk past.

The increasing spread of ever more intelligent smartphone handsets, combined with the continuing development of apps powered by geolocation technology from companies like O2 and Navteq, is crucial to this developing trend, providing a whole new angle of relevance for marketers and brands. 

According to Javelin Strategy and Research, 94% of purchases occur at brick and mortar locations. One of the leading providers of mapping and location services, Navteq, believes that this trend has the potential to transform mobile marketing.  

“Hyper-local mobile advertising can target consumers in a non-intrusive way when they are near a merchant’s location and then guide them to the front door,” says the organization. “This effectively transforms mobile into a direct response channel for retail, restaurants, cinemas, petrol stations, and any business that benefits from getting consumers in the door.”

Savvy marketers are now using location-based technology to reach potential customers in the immediate vicinity; business listings on services like Foursquare, Gowalla, Loopt, Brightkite, and Google Places are set to become crucial weapons in the mobile marketing arsenal.

Josh Williams, CEO and founder, Gowalla believes we’re only just beginning to see glimpses of what location-based marketing will look like for a new generation of people on the go. “We’re talking about far more than location-aware coupons and discounts. We’re talking about connecting with customers on the spot and providing them with real value in real time,” he says.

“The brands that will lead the pack will be the ones that proactively explore ways to use these services in new and creative ways. There has never been a more exciting time for a brand to personally engage with their fans.”

O2’s new location marketing service ‘You Are Here’ uses ‘geo-fencing’ technology developed by Californian-based company Placecast. Shaun Gregory, Managing Director of O2 Media, believes location is adding a new dimension to mobile marketing. “It’s taking the richness of the medium and delivering something unique that customers really want,” he says. “I think it will be game changing for the future of mobile marketing.”

Mobile operators have long been savvy to the level of user demographic data they can collect. Combine this with a new opportunity to collect detailed information on peoples’ movements and purchasing habits, and the picture becomes that much richer.

“Once your phone knows where the person is via an opt-in service,” said Google chief Eric Schmidt at the recent Mobile World Congress in Barcelona, “then a business model where a phone can alert you to a buying opportunity should revolutionise business.”

Josh Williams, CEO and founder, Gowalla will be joining other industry leaders at the Social Media World Forum Europe 2011 in London on 29-30 March, discussing the latest developments in location-based marketing. See the full agenda here.