Location data has long been a key selling point in convincing marketers to buy into mobile advertising, but it’s not gaining the traction networks had hoped for. Now location-based ad networks are enhancing basic geo-fencing capabilities with deeper consumer behavior formats.
Mobile ad networks, including xAd, Verve and PlaceIQ, offer marketers granular and retargeting capabilities that build campaigns around sets of consumers—a tactic that advertisers are already familiar with. “A lot of agencies and marketers understand audiences better than they do geo-fencing, so when you start to phrase things that way, the buy-ins become easier,” explained Monica Ho, xAd’s svp of marketing.
The belief is that hitting a consumer with an ad based on their exact location at one moment is not as effective as serving up ads tailored around the last 20 places where that consumer has been or other pieces of content that they’ve recently looked at on a smartphone. “It adds another dimension to not only where [consumers are] standing but also who they are,” said Michael Boland, chief analyst and vp of content at BIA/Kelsey.
A recent campaign from the Montana Bureau of Tourism and Starcom MediaVest Group’s Spark is one example of this strategy. The tourism bureau and Spark worked with PlaceIQ to wrap ski resorts with technology connected to a tile platform. The hypertargeted technology helped the marketer pinpoint specific locations to serve ads from October 2013 to February 2014.
The Montana Bureau of Tourism claims an impressive 1.7 times lift in visits by tourists, or 4,752 visitors totalling $6.9 million in revenue, thanks to the targeted ads. The campaign cost just $25,000. Those insights have led to a second campaign that will run through mid-September.
“The location data really helps build a profile, so you’re targeting someone beyond just their age, their demo and perhaps their contextual interests,” said Amy Dickerson, vp and digital director at Spark.
Despite promising gains, the bulk of location-based ads are served through run-of-the-mill mobile banners, which marketers are increasingly phasing out for native and social formats. BIA/Kelsey forecasts native social ads such as Promoted Tweets, which are designed to run within mobile news feeds, will hit $9.4 billion by 2018, up from $1.8 billion in 2013.
Advertisers believe location-based formats could help native ads scale. “I would love to see more location-based, native types of experiences in the marketplace,” said Jeff Malmad, managing director of mobile at Mindshare.