Recent reports have shown that mobile device usage now accounts for over 50 percent of all time spent on digital media, with some customers checking their phones and other devices up to a hundred times per day. Studies demonstrate that this recent rise in mobile use has a direct impact on consumers’ relationships with local businesses, with 60 percent of consumers using mobile devices to find information on local products and services, and 40 percent of those consumers being “on the go” when searching. Thus, it’s not surprising that small business advertisers are spending more time on mobile digital advertising than ever.
A major component of this trend involves location-based geo-targeting, where small business marketers are using location-based data in order to target mobile customers. But how effective is this approach to advertising for small businesses? Here are some key insights into current geo-targeted mobile advertising practices.
Common Uses of Location Data in Mobile Advertising
In light of the current marketing trend focusing on the use of location data to better target advertising for mobile device users, there are several strategies that have risen to the forefront.
- Geo-Aware Ads: This approach to location-based advertising uses technology to detect the real-time location of a mobile user and then send a location-appropriate message. The message can be customized to fit local conditions (such as the weather and nearby events) and might include coupons to further incentivize consumers.
- Geo-Fencing Ads: This mobile marketing strategy establishes a perimeter around a business’s physical location then sends mobile ads to users in that specific area. This type of ad commonly will acknowledge the user’s location and/or include location-based features such as a store locator.
- Geo-Conquesting Ads: This type of mobile ad is a variation on the geo-fencing ad, but here the perimeter is set up around a competitor’s location instead and ads are sent to mobile users in that area. The goal of this type of ad is to entice consumers away from competitor businesses and convince them to do business with the advertiser.
The Type of Geo-Targeting Method Used Matters
- Click Through Rates: According to LSA’s new LSA Insights database, click through rates (where the consumer actually takes action and clicks on the mobile ad) varies based on the approach to geo-targeting. Although all types of location-based ads provided a boost to the click through rate, much more significant improvement was seen in geo-fencing and geo-targeting approaches (at two times the industry average) compared with general DMA/zip code targeting.
- Secondary Action Rates: Secondary action rates are defined traceable actions on the part of the consumer, such as a call placed to the local business, a search for directions, or requests for more information). Just as with click through rates, LSA Insights found that geo-focused ads (like geo-fencing and geo-aware) performed up to twice as well as DMA/zip code based ads, with all three outperforming the industry benchmark.
Young, Wesley. “Location Based Geo-Targeting Boosts Paid Search Ad Performance…Or Does It?” Search Engine Land. 2/4/15.