Microsoft may bring location-based marketing to Office 365

It's still early days for location-based marketing, but recent integrations and acquisitions by Microsoft indicate it has LBM on its roadmap.

Over the past few years, software providers have made "systems of intelligence" one of their key priorities. The premise of this intelligence is to aggregate data from a variety of systems, enabling applications to learn from context to build on this aggregated knowledge. By augmenting internal company data from CRM, ERP and service systems with external information, companies can improve operations, better serve customers and innovate more easily.

While the industry is just embarking on this journey with artificial intelligence, companies like Microsoft have pursued systems of intelligence with zeal. Microsoft's recent acquisition of LinkedIn for $26 billion, as well as its integration of Office 365 with Microsoft Dynamics CRM, demonstrates its intentions. Microsoft is hard at work to integrate internal systems of data and to augment that data with external sources of information.

In recent months, an unconfirmed rumor has circulated that Microsoft is extending its roadmap further, working on an offering that combines Office 365 with location-based marketing (LBM). This service would enable Microsoft to deliver targeted marketing and/or ads to customers that would tailor messaging and advertising to their profiles and preferences. Microsoft declined to comment for this article.

To date, Office 365 doesn't have much interaction with location-based services, but a more concerted LBM strategy makes sense given its recent moves. Today, Office 365 uses location in so far as it uses the network "location" to prevent a user from accessing a service based on his location on the network. But that's a far cry from location-based marketing (or location-based services), which uses the mobile device's GPS coordinates or proximity to a beacon to determine the recipient's location in order to serve relevant and timely promotions, offers or ads.

Location-based marketing brings systems of intelligence to the next level in terms of being able to target customers in real time regardless of the communication channel -- mobile, web, social, physical store -- they use. While LBM can pinpoint customers' preferences, it also poses concerns about data privacy and the risks of tone-deaf, intrusive marketing. Microsoft's foray would have to address both sides of LBM to be effective and truly exploit the potential of combining Office 365 with LinkedIn, Dynamics and other services.

Microsoft Office 365's mobile play

Today, Microsoft Office 365 is a suite of subscription-based productivity applications based on the popular Microsoft Office suite. Microsoft provides Office 365 apps for various platforms; the apps are installed directly on the user's desktop or laptop computer, mobile device and so on.

Microsoft encourages users to be connected to the internet at least once every 39 days to maintain features. Microsoft lets the same user install Office 365 on multiple devices such as a laptop and smartphone, for example, without incurring additional licensing costs. By contrast, most other vendors' location-based services tend to focus on mobile devices -- particularly smartphones -- rather than laptops. Today, users can download basic Microsoft Office mobile apps for free and get additional features when those apps are connected to Office 365.

Potential opportunities

Microsoft's Office 365 location-based marketing strategy could play out in different ways.

  • Combining the user experience with the marketing platform. Microsoft could exploit its unrivaled ability among marketing platforms to deliver user experiences via productivity apps like Office 365 in concert with its Microsoft Dynamics CRM/marketing platform. Newer offerings like Skype for Business provide additional features that other marketing platform vendors lack.
  • Bing, LinkedIn and Microsoft Dynamics. Microsoft Office 365 could use its mobile and desktop apps to capture location data for distribution to Bing and LinkedIn advertising or for Microsoft Dynamics CRM, the customer database, which could then deliver targeted messages. Microsoft would need to gain end-user permission for this, of course.
  • What to market. Microsoft could use Office 365's location-based data to market an array of items, from office products to services for business travelers (e.g., coupons as you pass Starbucks). And, of course, Microsoft Office 365 is used by small businesses as well as families (think consumers) to whom Microsoft and its corporate customers could market as well.

Assessing Microsoft's opportunity

Location-based services could help Microsoft to catch up to other omnichannel marketing automation platforms, such as Oracle, Salesforce and SAP. The addition of LinkedIn could add exciting new possibilities that are yet to be determined. And few other marketing platforms can boast Microsoft's deep penetration with end users.

And yet, Microsoft would still need to encourage users to share their location data. They might be willing to share their location data in exchange for free access to premium Office 365 features. Still, Jesus Shelby, a solutions architect at services firm eGroup who has migrated thousands of users to Office 365, does not believe that Microsoft will combine Office 365 with location-based marketing. Shelby said that, today, Microsoft makes a point of not using data gathered from users to market back to them.

Beyond the potential user privacy concerns, Microsoft would need to build out substantial robust location-based marketing capabilities to compete with other omnichannel marketing platform vendors. But this could be a start.

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