The Future is Bright for Geo-Targeted Ads
June 20, 2017
What is a geo-targeted ad exactly? It’s a digital ad that is served based on the user’s location. The most successful geo-targeted ads’ messages are customized for that user, at that time, in that place. Geo-targeted ads can be triggered either by a search on a search engine or by audience data provided by an ad network.
According to BIA Kelsey, the authority on local marketing and advertising trends, geo-targeted ad revenue will represent 45% of all mobile ad revenues by the year 2021. This represents a 160% increase within a 5 year period.*
So, advertisers are buying more geo-targeted inventory, but is it paying off? Research says yes. Just take a look at the following data points:
- 66% of people want ads customized to their location
- Brands are seeing as much as a 20% increase in conversions when using location data in their campaigns
- 78% of local searches lead to offline purchases
Where are advertisers seeing success with geo-targeting? There are very few instances if any, where doing geo-targeting of some kind won’t increase the performance of an ad.
The most typical use case is that of a brick-and-mortar store or service location whose target customer lives, works, or travels within a radius of the location. However, savvy marketers are recognizing the power of geo-targeting and have used it to block traffic to competitors, garner e-commerce transactions using detailed local demographics, and drive foot traffic to events.
Many advertisers are folding in 3rd-party data points to continuously optimize and refine the geos they target. For example, one national optometry retailer recently used Balihoo software and an AccuWeather data feed to automatically launch geo-targeted ads only in the cities with ‘High’ UV indexes each day.
The creative showed promotions for sunglasses, and the address of the nearest retail location, which was always within a 5-mile radius of the user at the time they were served an ad. To layer on advanced targeting, Balihoo also filtered the audience down to those that matched carefully chosen interest and behavior targets, using a technique called ‘micro-relevance’.
Because the ads were only shown during each location’s unique business hours, ad waste was reduced, and online-to-offline attribution was made easier.
According to a report by Technavio**, led by Abhishek Sharma, the increased number of mobile computing devices, along with the impending integration of location-based search with social netoworking, will be behind the massive shift towards location-based advertising in the 2017-2021 time period. According to Sharma, “Real-time location-based advertising, supported by GPS-enabled smartphones, has the edge over traditional advertising media. Targeting potential customers using location-enabled search and advertising helps enterprises segment customers based on behavior.”
Using an automation platform like Balihoo allows national brands, including ecommerce brands, to use a variety of targeting criteria including zip code or radius, at scale across hundreds or thousands of markets. And because Balihoo has the capability to pull in geo-specific data from 3rd party sources, brands are getting a leg up on competitors that are only using the targeting capabilities offered by their ad networks.
To learn more about Balihoo’s suite of products, visit Balihoo Solutions.
*GeoMarketing.com, Geotargeted Mobile Ad Dollars To Hit $32 Billion Within Five Years, 1-24-17
**BusinessWire.com, Global Location-based Services Market to Grow at a CAGR of 40% Through 2021, Reports Technavio, 5-23-2017