With the amount of energy brands place on location-based advertising for so many years, it would be tempting to think that the practice has truly arrived.
Of course, advertising targeted at location is now commonplace. There is barely an ad-buying platform that doesn’t offer geographical buying. But delivering truly location-sensitive ads to mobile devices is about much more than location.
Location targeted ads only know that a man is standing in New York City’s Times Square. A locally targeted ad however, knows that a man is standing in Times Square in the rain at 6:00am—clearly a much different story.
Brands that are only using location to entice consumers are really only tuning in for a fraction of the story. It is local data that has the power to radically change what we mean when we talk about targeted advertising.
1. Time is critical to space
Two dimensions are better than one. When it comes to delivering location-dependent ads, the whole context of what a consumer is doing at a place in time, and why, is as crucial as simply understanding where he or she is. Your location targeting can be as pinpointed as you like but without understanding reasons for consumers being there, a campaign can fall on its face.
For instance, why would a store run an ad targeting passersby if that store is closed at particular hours? Buying this inventory adds up to wasted spend. Better to fully understand what may have drawn a consumer to a location in the first place.
2. Reach your rivals’ customers
If you marched in to your competitor’s store and enticed shoppers away with special offers, the manager would likely throw you out. But refined location-based ads empower brands to reach, virtually, inside every business on Main Street. If advertisers can target people entering their own store, why not elsewhere?
We have already seen brands bid on rivals’ keywords in online advertising. Now we are beginning to see advertisers do the same in the real world, with great effect. A special coupon or offer shown to shoppers just at the point of purchase can change their minds and move them in your direction.
3. Location is about knowledge
If you knew what was happening at a particular location, you would be far better armed to deliver location-based messages. Sure, if you knew where the local gyms are, you could target consumers who are into fitness right now. But if you knew when there was a yoga class happening inside, you could more specifically sell mats or stability balls to a more defined niche.
Now, with so many data cues all around us, the industry is on the cusp of being able to understand holistic context. Consider the National Football League and the opportunities to target hungry sports fans at the stadium. This past season saw a 50 percent lift in engagement for fast food ads when they targeted people hanging around sports venues on the day of a game.
4. Kick off greater granularity
The ongoing Rugby World Cup tournament in England has embarrassed many brands that delivered ads supporting the England team to social media users in countries of tournament rivals. Targeting interests using keywords like “rugby” is a basic faux pas when location affords more crucial refinement.
But the possibilities for sporting teams are greater. How do teams like the New York Mets and the New York Yankees target consumers when fans of two very different tribes occupy the same city? A smart creative would inject first-party data about neighborhood fan distribution into their mobile targeting.
Go one better—reach people who have already self-identified with your brand. By retargeting consumers who have previously brought their phone to Citi Field during a baseball game, the Mets can easily reach back to their most loyal base.
5. Take the weather with you
What’s one aspect of location that shapes how consumers go about their day? Weather can play a surprising role in how brands interact with consumers.
For the past few years, advertisers have been able to buy ads in weather-related sites and apps based on the prevailing conditions where a user happens to be. So why not apply this data to in-app ad targeting? For example, over this past summer we noticed an increase in engagement with cosmetics ads when temperature reached above 80 °F. Now that we’re approaching the winter, the same brands using dynamic and adaptive creatives can find out in real time where it’s raining, and automatically serve an ad for waterproof mascara.
Where in the world?
Even though roughly two out of every three American adults own a smartphone, brands are only barely tapping into the real power of mobile advertising.
After all, most big advertising technology platforms support only ZIP code-level targeting and crude geofencing. Even Facebook only gives advertisers the ability to target within a 1 kilometer radius of a particular place. It’s no wonder that for big providers, mobile is still a small percentage of overall revenue—they invest in engineering efforts where the money is, on the desktop.
However, projections show that most ad spend will increasingly go to mobile. eMarketer forecasts indicate that mobile ad spend will reach $100 billion next year, which will make up for more than 50% of total digital advertising spend. If the industry does not catch up, marketers will miss the true potential of this wondrous technology.