How Packaged Goods Companies Use Location to Market on Mobile

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The benefits of location data are obvious for retailers with physical storefronts, but can consumer packaged goods (CPG) brands capitalize in similar ways? More and more, the answer is yes. Some of the largest CPG brands started to ramp up mobile spending last year as they look to influence an increasingly smartphone-wielding shopper.

SITO Mobile is a location-based mobile advertising company that has spent the last decade helping companies like Samsung and Coca-Cola effectively market to millions of consumers. We recently caught up with Adam Meshekow, SITO’s executive vice president of product strategy & national sales, to talk about how marketers are using location data to reach their consumers throughout the shopping experience.

Early last year, we saw a big spike in CPG spending with the major mobile ad networks. What drove, and what’s driving, this shift in spending?
CPG marketers are shifting toward mobile because that’s potentially where their audience is spending most of their media consumption, and they’re shifting their dollars because they’re seeing less of a return using print circulars and co-op dollars in branding and in traditional channels like TV, radio, FSI. There’s no doubt that mobile advertising is growing, so I think [CPG companies] will continue to spend in the digital realm, heavily in mobile and social.

In many ways, they’ve already started to do that now. Procter & Gamble and Johnson & Johnson are really focusing on using that data to find their target audience, rather than the old approach, which is more “spray and pray.”

Location-based mobile advertising has been a big boon for retailers and other brands with a physical presence. Where do product companies fit into the mix?
It’s really about hyperlocal at scale, when you’re only targeting customers [who are] the most natural retail clients based on current behavior while they’re at the store, or past behavior of what they did at the store. Mobile is providing CPG marketers with unprecedented access to consumers as they shop in stores.

For brands, that means being able to actually understand past audience data now— to understand actual shoppers of certain stores based on location. That data was never available before, so I never knew who was a Wal-Mart shopper because Wal-Mart never shared that data with the CPG marketer.

What data can CPG marketers use to succeed in reaching consumers on mobile?
Location data, visitation behavior, understanding custom audiences. They can use CRM data to understand which device ID ties back to certain households. You also have age and demo data that you never had before, layered on to mobile consumers. And on top of that, you also have geopatterns of people that you can put in custom, segmented pockets. If we see a device at Babies-R-Us, a daycare center and a park, we’re going to assume that it’s a mom.

From an ad products perspective, what’s working for CPG companies on smartphones?
Shoppers always respond to offers or some kind of promotion. Sometimes it’s about content. Brands might use location data to understand who and when and why to target a given audience — and time, gender, age, actual physical geo pattern behavior allows you to essentially speak to that consumer in a very relevant fashion. That depth of knowledge can allow a brand to potentially interact with a consumer and create something of value, given that the ad is actually relevant.

Most offline attribution today is done through retailers’ point-of-sale data. How are CPG companies measuring the success of a local campaign on mobile today?
One way is through a methodology that’s been used in advertising for years — testing mobile and understanding what was the same store’s sales in a pre- and post- period of adding mobile into the media mix. Also, looking at a control group where there are no mobile advertisements, and understanding how does mobile play a role in actual in-store sales.

Another way people are using it today is through third parties that the retailer shares that data with, like a Datalogix, where you’re able to understand what a device ID actually bought based on loyalty information from a grocer or pharmacy or something along those lines. And the third area is to really understand match-back device IDs to households, and then let the retailer understand the incrementally of their consumers when they’re being reached through mobile.

What’s the biggest hurdle facing CPG marketers on mobile today?
I think the biggest hurdle really lies with the education in mobile. It’s a different beast. You’re taking advertisements on a very small screen, and hopefully not just jamming whatever message you put on the big screen into the small screen. A lot of folks don’t know how to understand it or measure it — they just think of it as another check box or another line item.

If you understand how to measure it and understand what kind of traffic it’s driving into the store, and also understand the same store sales, typically you’ll realize that [mobile] has the best audience data, the best targeted approach at scale, and can drive a significant return on investment.

Annie Melton is a contributor to Street Fight.