But in the past three years we have seen a significant shift in local marketing efforts. Marketers have been effectively reaching consumers through daily deals and localized online search through Google, Yelp, and others. While access to the Internet has dramatically changed how people find and purchase deals, reaching consumers through mobile devices is the obvious next step. The industry’s challenge is: who is going to bring together all necessary components that will make localized mobile marketing a mainstream success?
If you’re still in denial that mobile is going to transform localized marketing, consider this: there are 7 billion people on Earth. 5.1 billion own a cell phone, while 4.2 billion own a toothbrush, according to the Mobile Marketing Association. That said, I think we can all agree that mobile advertising is still in its infancy. Until consumers start receiving relevant mobile ads, developers and publishers will fail to monetize mobile.
The challenge lies in delivering ads that resonate with the consumer. Typically, marketers in any medium base their targeting efforts on latent intents, such as behavior and lifestyle information. Once the mobile marketer can overcome this challenge and deliver truly relevant messages, the next step is to ease the mobile purchasing process. This last point is important — getting commerce to happen on mobile devices will give merchants a huge incentive to participate in mobile marketing. Online marketing was similarly fueled, ultimately, by the ease of transacting online.
Over the past 12 months, a number of large technology companies have put together some of the components that would accelerate local marketing in mobile. The company that can check all the components off the list will achieve “pole position” and generate substantial revenue from local advertising. The critical components include
1. A local salesforce and/or a set of relationships with local merchants
2. A distribution system for putting deals and offers in the hands of mobile consumers
3. A method for finding which offers are relevant to each consumer
4. A trusted payment mechanism that allows consumers to purchase on-the-spot in one-or-two clicks
Some companies like Amazon already have big assets that can help them achieve this “holy grail” combination in mobile advertising. Today, Amazon has a great brand, a local “daily deals” product offering and a big investment in Living Social. Further, their mobile applications are widely installed and can be easily linked to offers in mobile display. Amazon also has a huge advantage in handling payments as they are a trusted consumer brand, and can take payments for local offers within their apps using consumers’ stored payment information.
While Amazon has many of the components in place, recent rumors suggested they were about to purchase a mobile ad network. While this may seem like the right step, some question if the purchase of an ad network is enough to propel Amazon to “pole position.” True, an ad network would provide a host of mobile impressions in one convenient place for Amazon to tap, but what it doesn’t do is provide any relevancy of offers. Remember element three—a method for finding what each consumer desires. Big players like Amazon, Google and Groupon surely realize that providing relevant, localized offers to the consumer is a critical step. Only if the consumer sees the value in the mobile ads, will mobile ad sales generate revenue. Amazon would, at least, have some understanding of many consumers’ purchases of electronics or consumer staples. But would that be relevant to local offers?
The greatest differentiator that digital publishers and application developers have is access to information about users. The greatest advantage of mobile is knowing where a user is and when they are there. Any company that is serious about local commerce needs to find ways to use location data and extract hidden intents, such as uncovering which user is planning a spa day and which user is in the market for a vacation package. Location data can reveal if someone dines out, shops at a store category and/or plays tennis. Used safely and responsibly, an advertiser can use this information to target a consumer with personally relevant offers and drive quantifiable results.
By using mobile-location data and predictive analytics, advertisers can reach users with deals based upon where they work, live and socialize. If you live down the street from a Foot Locker and you’re in the market for new sneakers, aren’t you more likely to take advantage of the retailers 50 percent off deal? Finally, if a relevant ad is delivered and the transaction can be completed in one-or-two clicks, mobile advertising will provide what local merchants are willing to pay for – real sales results.
Interestingly, we find ourselves at a juncture where many of the companies that have been successful in the digital media revolution and in local online advertising are still trying to figure out mobile. Mobile has to be a big part of local advertising’s digital future: devices are always with the consumer and it is the perfect medium for call-to-action offers. Time will tell which players emerge as leaders in mobile advertising. But the organization that is able to bring relevancy and easy execution to the consumer is likely to win in the end.
As Chief Executive Officer of Sense Networks, David Petersen is responsible for setting the vision and execution path of the company. Petersen joined Sense following his tenure as Senior Vice President at The Nielsen Company, where he established himself as a leader in the mobile, analytics, and media industries. Prior to joining Nielsen, Petersen served as Senior Vice President of Product Management and Senior Vice President of Business Development at Telephia — the global leader in mobile performance information for the telecommunications industry — and was part of the management team that sold the business to Nielsen in 2007.