Mobile ads show a 42% lift in performance when they’re targeted based on the location of a business, according to a 2013 report by JiWire. However, there is still a debate as to how tightly marketers should target their ads to optimize the performance of their campaigns.
Although that same JiWire report found that consumers were most engaged with ads shown within a two-mile radius of the business’ location, that rule of thumb didn’t apply across all industry verticals. CPG brands, for example, saw better performance when their ads were shown to consumers less than one mile from stores that sold their products, and businesses in the hospitality industry saw the best outcomes when mobile ads were displayed inside their locations.
Here are five questions to ask yourself when deciding how targeted to make your mobile campaign.
1. How large is the neighborhood? “Neighborhoods are important psychological and physical boundaries, something the direct mail industry has known for decades. Consumers are more likely to visit a store in their own neighborhood, even if another store in a different neighborhood is closer. It’s a geofence target area that makes a lot of sense for mobile campaigns that are not time sensitive. When stores target the shopping area with its parking lot, they’re able to reach consumers when they arrive at the shopping area but before they enter the building. This presents an excellent opportunity to siphon off customers from competition or connect with consumers when they’re still undecided.” (Darrin Clement, Maponics)
2. What kind of service are you promoting? “I believe the ‘right’ option for sizing a geofence outdoors is directly tied to the kind of product or service being promoted. For example, I think food and drink promotions tend to be more effective closer to the premises — 1 or 2 kilometers max — due to the impulse nature of these offers, whereas offers related to clothing or high street retail have a wider range in which they might be effective.” (Sean O’Sullivan, LocalSocial)
3. How suburban is your community? “Geographically speaking, customers typically will drive, or travel in general, farther in suburban and rural areas than in a city. Depending on the offer, it may be worth going that extra mile. In a case with one of our clients who promotes a retail district, if their area has an event like a holiday festival, they can make the geofence larger than if they are just running a percentage-off lunch from one of the local restaurants. Your typical customer will not drive several miles out of the way for a few dollars off.” (Linden Skeens, Thumbvista)
4. What is your offer? “We have gone through extensive tests and studies to determine the optimal fence for a given client campaign, and have found that three primary factors play a role in determining the actual size of a fence being used: the type of business or product being advertised, the type of area the ad is being targeted to, and the type of offer being promoted. For instance, to promote a new flavor of ice cream for a local ice cream shop offering a $1 off coupon, we would more than likely use a tighter fence. This will make sure we are hitting people nearby the location and who may be able to take advantage of this offer now.” (Dipanshu Sharma, xAd)
5. What do you want to learn? “I advise businesses to look at location as a litmus test to digest and review the data and then optimize the areas that perform best. Go into the exercise asking what you want learn about the location, consumers and interaction with your ad. Then, optimize to yield results based on your objective. Look at the capabilities of the geofencing platforms to see what you can gather from a data perspective. At Moasis, we define set borders through our proprietary geo-grid ad engine. This removes the question of, how big should my fence be? Each area of our grid has the ability to reveal data that is specific to each cell, which then makes it possible to optimize particular locations in future campaigns.” (Ryan Golden, Moasis)
Interviews have been edited for length and clarity.
Stephanie Miles is an associate editor at Street Fight.