Location, location, location

Location, location, location

Location-based targeting is not only about identifying the ‘where’ – increasingly, it’s also about the ‘what’ and ‘why’.

You’re walking by a store and an advert offering you a personalised special offer pings up on your smartphone. You move on towards your favourite coffee shop and up pops a message offering a deal on your regular caffeine and pastry fix. Later, you’re in a bar when a two-for-one on a hip new drink appears onscreen.

Location-based advertising technology is becoming increasingly important to marketers as it becomes more sophisticated. In its latest report on the sector, Berg Insight forecasted that the total value of real-time mobile location-based advertising market worldwide would grow to €10.7bn by 2018, up from €1.2bn in 2013. By 2018, Berg estimates that location-based advertising will account for 38.6% of all mobile advertising and marketing spend. This is up from around 14.5% in 2013, and will represent around 7% of all digital advertising spend, or 2% of total global ad spend across all media.

Clearly, knowing precisely where customers are, and what they’re up to, is big business. Smart mobile devices capable of generating precise location data, growing acceptance of location-based services among consumers, and the increasing deployment of real-time big data analytical tools, are driving the market for highly targeted advertising. And marrying the customer’s location with a contextual understanding of their behaviour offers huge opportunities for savvy marketers.

By using precise location-based data to add context and relevance to mobile advertising messages, research shows that marketers can increase mobile ad performance by two to three times, according to the Mobile Marketing Association’s (MMA) Cross Media Effectiveness Study (SMoX). Also, BIA/Kelsey reports that hyper-geo targeted advertising has an 80% higher click-through rate than standard designated market area (DMA) targeting on mobile.

“Real-time location data from mobile devices provides marketers with a new indicator of intent and identity in the physical world,” says Monica Ho, Head of Marketing Infrastructure at location-based marketing services specialist xAd (and board member of the MMA). “By understanding the places people go and large-scale patterns in device data and movement, marketers and advertisers can accurately predict where people will go and what they will do next.

“At xAd, we have access to 300 billion mobile ad requests each month from 300 million mobile users. Each day, we are seeing hundreds of millions of visits to business location. With these location insights, marketers can reach and influence a person at the moments of greatest intent and receptiveness.”

Keeping it relevant

Relevance is, of course, fundamental to successful campaigns. That has underpinned the development of increasingly sophisticated location-based advertising platforms that use ‘big data’ to analyse the consumer’s behaviour – including recently visited locations, online activity and use of apps – to provide a richer context and more precise audience targeting. Companies such as xAd, Place IQ and Near (formerly AdNear) are offering the capability to consolidate huge volumes of structured and unstructured data and fine-tune this intelligence for profiling and audience building, delivering the tools for highly targeted marketing campaigns.

“We’ve seen a trend towards marketers wanting to leverage that location-based data in two ways – both at a ‘short-loop’ and ‘long-loop’ level,” says Jason Nathan, group managing director for data at customer science company dunnhumby. “‘Short-loop’ is to get, at a very specific moment in time, the coordinates of where someone is and target them accordingly, whereas the ‘long-loop’ is about understanding the patterns that come out of where someone is at certain times of the day and week – building up a pattern-based profile of the consumer.”

The longer-loop approach offers the opportunity to target individuals with a high level of accuracy, based on their lifestyle and behaviour. This enables marketers to tailor messages that may have greater influence on consumers’ buying decisions. The latest platforms can process these huge amounts of data to effectively create a profile of users based on real-time data analysis to understand the ‘what’ and ‘why’ as well as the ‘where’ – and target messages more appropriately. As Michael Boland, chief analyst and vice president of content at BIA/Kelsey, has commented: “It adds another dimension to not only where [consumers are] standing but also who they are.”

Raising the profile

As well as developing this on an individual, human level, marketers can also effectively create wider analytical profiles from these individual patterns, based on a product category or brand. This can provide deeper insights into behaviour across sets of consumers, targeted on a local level and ensuring more effective campaigns and retargeting. This sort of rich data can also be used to measure campaign effectiveness more accurately – and demonstrate to clients the impact of such targeted campaigns.

Recent research by xAd has found that 80% of marketers are already using location targeting for mobile advertising. Of these, the top strategy they use is audience targeting, designed to reach a specific group of people based on the places they visit.

“What this tells us,” says Ho, “is that marketers are maturing in their understanding and usage of location, not just to reach people based on where they are, but also to understand a person’s intent and interests.”

“The story-telling you can do with that data, as a marketer or publisher, is very, very powerful,” says Nathan from dunnhumby. “The profile of typical consumers it delivers and the insight into behaviour it provides means this is unbelievably powerful data for increasing the relevance of the audience targeting.”

And in the future? “Location capabilities will become more pervasive,” predicts Ho, “and technology will allow greater connectivity to other location-based mediums such as outdoor billboards, digital features, local events and in-store experiences. This will allow marketers to enhance brand experiences by customising based on the context of location, time and environment in a way that wasn’t possible or thought of before.”

Phil Lattimore CPL Freelance Journalist
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