Why Location Is Key to Mobile Monetization

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Anna Bager is a guest author. She will be moderating an IAB-led panel at next Wednesday’s Street Fight Summit on “Using Location to Monetize Mobile Inventory.”

Last year, we saw brands begin to experiment with joining location to more contextual information to help them understand their audience and do better targeting. It’s a smart move because integrating information about a user’s location into the ad experience can make ads more relevant. In a study the IAB did with ABI Research, we asked,”What kinds of ads are you most likely to respond to on your device?” According to the results, location is the fourth most important factor that entices smartphone users to interact with ads after coupons, specific product searching, and favorite brands.

Thanks to smartphones, it’s possible to get a user’s precise location. Meanwhile, many of the activities that consumers conduct on their mobile devices, specifically on smartphones, are local in nature, including checking the weather, looking up the scores of their local sports teams, researching restaurants for dinner, and checking product availability in nearby stores. Location can become even more precise — or “hyperlocal” — when consumers are looking for directions to a close-by coffee shop or checking their social media channel of choice. Some consumers are finding that providing their location makes their experience more relevant and meaningful. This is a wonderful and unique opportunity for offering great marketing and building customer value.

In 2013 we will see advertisers take advantage of this consumer shift primarily through geofencing, geo-aware and local search.

With geofencing, a consumer inside aspecified area would be served an advertisement, while a consumer outside this area would not. Mobile devices allow for this to be possible and users within that “fence” to be reached. Geo-aware, on the other hand, allows advertisers to recommend certain actions based on the consumer’s relative position. Dynamic advertising and HTML5 have really helped this effort be successful, as advertisers are able to drop in different store locations, hours, phone numbers, and even a map.

Meanwhile, local search has really taken off on mobile. To be clear, local search is not specific to search engines but can also be found in maps, directories, social media sites, et cetera. Local search is important because it shows clear intent from a consumer, and it is crucial for all businesses, whether national brands or small-to-medium firms, to show up in those search results, either through paid advertising, businesses listings, or organic results.

Going forward we expect to see strategies using location emerge besides these three trends. As more media companies start providing this type of data for mobile, brands and businesses will be able to extract more insights about their audiences beyond what is needed for basic location targeting. Location is becoming an even more powerful data set.

The privacy part
But as we all know, with great power comes great responsibility. The current regulatory landscape is such that many commercial and consumer privacy matters before the House and Senate have mentioned location, including the Location Privacy Protection Act and the FCC’s Location-Based Services Report. Therefore, it’s important to make privacy a part of your marketing plan. Be transparent in your practices and provide choice.

As location becomes an ever bigger opportunity in mobile, a few questions are worth digging into further. One of those is how “precise” that location data is. Latitude and longitude coordinates don’t necessarily come from a device’s GPS system. There are many ways to devise a user’s location so it is important to understand the differences between them and decide which one is right for your goals. Another important topic is the way success is measured in a local campaign aimed at driving offline actions, whether they involve a call or an in-store visit. Do specific engagements such as mapping directions show intent and should they be considered a metric of success?

All these developments point to a bigger goal and that is monetization. Mobile local helps businesses reach the right audience at the right time and even more specifically at the right place. We will be exploring more how big publishers are taking advantage of location to help their businesses.
Come check out the panel at the Street Fight Summit on Jan. 16!

Anna Bager is the vice president and general manager of the Mobile Marketing Center of Excellence at the Interactive Advertising Bureau. The Mobile Center, an independently funded and staffed unit inside the IAB, is charged with driving the growth of the mobile marketing, advertising, and media marketplace.