Relying on direct buys with large publications or exchanges allows advertisers to reach millions of readers at once, but the real value of contextual ad placements is still up for debate. With click-through rates now averaging just 0.2-0.3 percent, advertisers are increasingly looking for smarter ways to reach consumers and drive in-store traffic — particularly during the holiday season.
A new white paper from Neustar, “Localized Online Ads Mean Stronger Holiday Sales,” takes an in-depth look at the science of local targeting and the effect that it can have on a company’s overall marketing strategy. Although there is no denying that the direct purchase of contextual ads from mammoth publications allows marketers to reach millions of readers at once, these tactics may not work well for marketers with key performance indicators like engagement and sales.
According to Neustar, strategic advertisers are using ZIP+4 data to target potential customers efficiently and precisely. By overlaying ZIP+4 data — which involves industry, location, and behavior — on top of predictive data, advertisers can boost online response rates, drive in-store traffic, and keep their registers ringing throughout the holiday season.
ZIP+4 data is used to segment audiences so that advertisers can send specific messages to selected groups of consumers. This type of targeting tends to be most useful for marketers who are interested in adding more discipline to their routines. ZIP+4 IP address-based targeting is best suited for advertisers with unique target audiences in concentrated locations. Hospitals, universities, business centers, and hotels all fall into this category, as do big box stores and large trade organizations.. So do affinity groups such as local sports teams, political advocacy groups targeting inside the Beltway. There has also been effective usage for targeting college students.
The more niche an advertiser goes, the more receptive the audience becomes. Incorporating IP address targeting allows marketers to drill down even further, locating consumers where they live and work, and tailoring messages for maximum engagement. As an example, an advertiser could use ZIP+4 location targeting to serve ads to mobile devices being used on a particular college campus. Drilling down even further, that same advertiser could use IP address targeting to ensure his ads only appear in front of mobile users in the college’s business management department. The advertiser would then pay only for the impressions that it knows are reaching students in a key demographic.
That type of specific targeting is virtually inconceivable without ZIP+4 and IP address-based data, and yet still, many advertisers are persuaded to continue relying on contextual ads because of the perceived cost differential. Buying impressions at scale earns advertisers significant ad space for pennies, but it also results in waste. In many cases, advertisers who are buying against a customer profile may be unaware of where their impressions are being served and whether consumers are even seeing their placements. This leads right into the ongoing debate over impressions vs. viewable impressions: Whether advertisers should pay if their ads are served below the fold, unseen if consumers don’t scroll down to see them.
What isn’t up for debate is the effect that ZIP+4 data can have on engagement rates. Applying the strategies of IP address targeting and offline marketing, advertisers are able to waste fewer impressions and ensure their messages are reaching the right holiday shoppers. Big box stores, in particular, can drive holiday sales by pushing special offers during lunch hours to consumers at business parks within a 10-minute drive of their physical stores.
When it is used in the right context, ZIP+4 targeting allows companies to reliably reach their target audiences in a cost-effective way. During the holiday season, especially, leveraging consumer demographics, brand affinity, and lifestyle attributes leads to an increase in response rates and in-store traffic.
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