What is location-based marketing?

Location-based services like Foursquare, Gowalla, and Facebook Places have started creating a lot of buzz about a concept called “location-based marketing.”

What is location-based marketing? Just another social media buzzword or something that has the potential to change the way businesses interact with their consumers?

Here’s a definition from one of the top mobile marketing gurus:

Rental-Based Marketing: A social media marketing strategy that targets mobile check-in services, such as Foursquare or Gowalla, to deliver deals, promotions, coupons, discounts, or special offers to customers in real time on their mobile devices.

At its core, this strategy sits at the intersection of social media marketing and mobile marketing. Also known as “LBM,” location-based marketing is creating a way for businesses to literally put value in the palm of their customers’ hands.

Customers can “check in” to a store on their mobile device to unlock special promotions and offers. This takes the often bland concept of “social media” and creates a way for businesses to quantify exactly how their Facebook or Twitter presence generates revenue. Social networks become a tool to drive real traffic to restaurants and retail stores.

LBM is an easy-to-use, low-cost marketing strategy for small businesses and restaurants that uses cutting-edge mobile marketing strategies to transform customer engagement from a small business perspective.

This is exactly why LBM has so much potential and has been making such a buzz on marketing circles sites lately: it’s finally a way for brick-and-mortar businesses to generate tangible revenue with social media.