5 Keys to Making Location Work for Mobile Marketing

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mobile-phone-map-searchSmartphones generate billions of bits of location data every day, creating an unprecedented opportunity for marketers to understand and engage with local consumers at scale. In a Street Fight webinar Wednesday sponsored by YP, Patrick Dolan of the IAB joined David Petersen of Sense Networks and YP’s Luke Edson to discuss the trends that make location data a must for mobile marketing, and outline a handful of ways advertisers can use big data to unlock local relevance in their campaigns.

After years of rapid consumer adoption, marketers have started to think seriously about mobile. During the first half of 2013, mobile advertising revenue grew 143% from a year earlier, according to an IAB study. But it’s the emergence of programmatic buying, paired with mobile advertising, that’s opening the door for big data — particularly around location — to play a bigger role in the targeting process.

“What a programmatic approach allows is a holy grail where you can apply big data to automated buying technologies and use these technologies to have an always on message that’s delivered to right person in the right place at the right time,” said Dolan. Marketers have already adopted programmatic strategies en masse, with 85% of advertisers saying they have already pursued an automated approach to buying and selling media.

Advertising technology companies like Sense Networks are bringing the two worlds together. The startup aggregates and analyzes billions of location data points that flow through ad exchanges everyday, and creates profiles for devices based on where they’ve been. Then, the company allows marketers to programmatically target ads to these mobile devices, delivering content to users based on the stores they frequent or the neighborhoods where they live.

During the webinar, the company announced a new partnership with YP that will allow the search firm’s clients to use the ad tech company’s technology to buy mobile display ads. Edson said the two companies have been testing the integration for weeks, and that the partnership will roll out to all of YP’s clients this week.

The big takeaway from the participants was that location data presents a massive opportunity for a range of businesses, whether its a retailers or restaurant with brick-and-mortar store or a consumer product goods (CPG) company or insurance firm that sell locally as well. Here’s a few suggestions to get started:

  • Know thyself: Before investing in location targeting, Edson suggests that companies take the time to analyze their own sales and customer data: “Analyze what products people buy, how much they buy, what your profit margins are, what your share is in relationship to your competition,” he said. “It sounds like a daunting task, but only in understanding your own business at the hyperlocal level can you partner with technology companies and marry those data to make a one-on-one connection.”

  • Location is about place — not distance: In the early days of mobile, the big pitch of location targeting was the ability to reach consumers nearby. But proximity often does not mean intent. According to data from Sense Networks, there’s little correlation between a user’s distance from a store and the click through rate (CTR) for an ad. “What we’ve realized is that most purchases are planned. Outside of a great deal, it’s hard to change behavior in the moment.”

  • Time matters: A user’s location can tell a marketer a lot about who a user is and what they like to buy. But it’s not always the best indicator of intent, says Petersen. However, the time of day can often affect the likelihood that a user will engage with an ad. For instance, the startup found that the CTRs for ads in a campaign for a quick-serve-restaurant jumped in the early afternoon and late evening, just as people looked for a late lunch or evening snack.

  • Coupons work: Brand spending might be increasing online, but performance marketing still dominates. And nothing gets consumers to click like a deal, says Petersen: “Overwhelmingly, deals and discounts tend to be the biggest things that contribute to driving secondary actions.”

  • All sales are local: Petersen says that hyperlocal targeting has been most effective for brands with a brick-and mortar location. But considering that consumers spend 80% of their income within 50 miles of their home, every brand needs to understand their local messaging, says Edson. Even for companies that don’t even sell in specific markets, there’s still a huge opportunity for mobile and location to play in shopper marketing and others areas.

Steven Jacobs is Street Fight’s deputy editor.

Find out more about how big data is going local at Street Fight’s newest industry event, the Local Data Summit, taking place on February 25th in Denver. Early bird tickets now on sale! Reserve yours now!