MobAir: Location-Based Advertising – The Value of Location Data

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Do you believe that location data is a relic of the past? Don’t jump to conclusions. The quality of location data has significantly improved in recent years, and its overall potential seems quite promising today. Location data unlocks vast business opportunities for marketers who want to target their customers in a more efficient way. That said, location-based advertising has found itself in the spotlight again.

BIA/Kelsey projects that location-targeted mobile ad spend will reach $29.5B in the U.S. by 2020. Such location-based services as Foursquare, Swarm, Waze, FieldTrip put the location data at the heart of their business models. They provide valuable insights for other businesses that want to target their customers better.

What Is Location-Based Advertising?

In a nutshell, location-based advertising (LBA) is targeting customers based on their current location data, derived from their cell phones. Location-based services (LBS advertising) enable marketers to cater their messages depending on the situation. Knowing the customers’ actual location and their habits gives more power to marketers. They could leverage this data to personalize their marketing campaigns and derive more value from them.

Image source: Appleyard Agency

How Does Location-Based Mobile Advertising Work?

Location-based marketing is simple in theory, yet complex in practice. It deals with massive volumes of user data and includes various parameters. Geo-targeted mobile ads use IP addresses to track the current customer’s location. Every smartphone has its unique IP that allows indicating the specific area its owner is currently in. Based on this data, they receive ads from a particular business being advertised nearby.

Geo-fencing is commonly based on GPS technology that defines the target area with a so-called “virtual fence”. Whenever a customer gets in or out the predefined area, they immediately receive a notification – as a result of trigger activity.

Image source: Reach-U

Types of Location-Based Mobile Advertising

Depending on your ultimate goal, you need to leverage a specific mobile targeting strategy. Here’s a list of the most common targeting practices to bear in mind.

Hyper-Contextual Targeting

Hyper-contextual targeting is all about sending contextual ads based on the hyper-local data. It works as follows: advertisers engage with environmental context to incentivize customers to make a purchase. For instance, if there are some issues with clean water in the region, it would be a good idea for a water filters provider to run contextual ads to the locals. Impactful ad content drives more sales.

Place-Based Targeting

Location and data are two parameters that go hand in hand when speaking of place-based targeting. Let’s picture the following scenario. You sell headphones and search for ways to find new customers. What you need to do is run compelling creatives during a gig where a music festival occurs. What is more, you can incentivize your target audience with enticing discounts and special offers.

Geo-Aware Targeting

Geo-aware targeting is the ancestor of location-based mobile advertising as it is today. It is used to hit customers who are close to a specific location by leveraging real-time location data. For better results, you need to have a good understanding of your key customers’ behavior.

Geo-Fencing

To do geo-fencing, you need to put location parameters in the first place. Let’s say you have a store in a shopping mall in the western Manhattan in NYC. If you want to target customers within this specific area, you need to indicate its latitude and longitude. Then, based on the geo-fencing data, you will be able to send a relevant ad content to customers who are in this shopping mall at the moment and attract them to your store.

Geo-Conquesting

Want to convert competitor’s customers to yours? Try to take advantage of geo-conquesting. It is a practice of targeting customers the moment they are physically in or nearby a competitor’s store. It allows reaching the buyers-to-be when they are the most interested in buying from you. This tactic is relatively new, but it rapidly gains popularity.

What Are the Benefits of Geo-Targeted Mobile Ads?

If leveraged properly, LBA could beсome an integral part of the brand’s mobile marketing strategy. Let’s consider why marketers need to pay specific attention to geo-targeted advertising.

Enhanced personalization

One of the golden marketing rules says that personalized content produces the highest engagement. In other words, if your ads are customized for a particular customer, there’s little chance they will annoy them. By knowing the geographic location and habits of your customers, you can deliver tailored-made content prompting them to do the desired action.

Timeliness

Better late than never? When it comes to advertising, this truth doesn’t work. Timeliness is one of the unbeaten advantages of location-based ads. Location data is served in real time, allowing marketers to hit customers on the spot. When people enter a shop, store beacons instantly log this information. As a result, prospective buyers receive real-time offers (discounts, coupons, and deals) at the right moment.

Targeting

Targeting or, to be more precise, geo-targeting is another killer feature of location-based ads. Today’s smartphones have built-in GPS capabilities that allow tracking their owners’ location. Marketers quickly got this idea and began to leverage this functionality to geo-target their potential and existing customers.

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