Location is the single most vital piece of information about your identity as people build personas and even stereotype personalities based on where you belong to. We are emotionally connected to where we belong and there is a sense of pride attached to the location that one belongs to. Marketers over the years have become aware of the fact that using location-based advertising is a very effective way of reaching out to their audience. Internationally location-based services is projected to $ 17.9 billion market by 2019.
Location-based advertising targets audiences in a specific geographic area based on cell phone signals or cell tower triangulation. Location-based advertising allows marketers to personalize the information shared and build high relevance as targeting can be more precise.
How location-based advertising works?
Location-based advertising works in different formats. Targeting for location-based advertising can be broadly is categorized into the following:
Targeting by administrative regions
Advertisers can target audience by State, City or Pin Code based on the requirement. A typical example of companies that would use this format includes cab aggregators or food delivery companies who would want to reach to the audience in a specific location.
Geo-fencing or Geo-conquesting
Geo-fencing or Geo-conquesting allows the advertiser to target consumers in a specific distance from a pre-determined location. Geo-fencing can be done based on GPS, Wi-Fi, Beacon or Bluetooth signals. Geo-fencing can be used retailers, quick-service restaurants or automobile dealers to drive footfalls into the store or distribute coupons.
Points of Interests Targeting
Advertisers can also use location as a proxy for audience and target users around specific points of interest such as railway stations, airports, shopping malls, universities and IT parks. A typical example of this would an e-commerce company targeting users in shopping malls and IT parks.
Custom Segments based on location history
Advertisers can also develop custom segments based history of real world places visited by users. Places visited by a user can also provide insights into life stage and behavioral attributes of the user. A typical example of this would an airline targeting a user who frequently visits airports and business class hotels.
Location-based advertising is more effective when the location data is combined with context such as time and day of the week, weather, phone position (user leaning back or forward).
How effective is Location-based advertising?
- 60% of consumers use mobile devices to find information on local products and services, and 40% of those are on-the-go when searching. (Source : Thrive Analytics )
- More than 60% of consumers have used location information in ads. 4 in 5 consumers want ads customized to their city, zip code or immediate surroundings. (Source : Google)
- Location-based ad efforts were about twice as effective as the mobile industry average click-through rate (CTR) of 0.4%. (Source : Verve)
- 70% of consumers are willing to share location info if they get value in return like deals coupons, loyalty points or other forms of rewards (Source : Thrive Analytics )
- Results from an independent consumer survey conducted on behalf of Brainstorm and the Mobile Marketing Association (MMA) reveal that the majority of users (74%) are happy to share our location based data with third parties. However, most (72%) believe that companies are not taking adequate steps to ensure the responsible use of location data and that further regulation.
Indian Brands that have leveraged the location based advertising effectively
OLX used hyper-location targeting to reach 2nd hand automobile & mobile markets using pin-codes. The users were targeted with personalized contextual overlay ads using network apps and mobile sites. The 6 weeks long campaign saw over 5, 00,000 unique users and cost per unique reach was 3 paise. The click to install app was 4 times more than other campaigns. 60% of the install resulted in transactions.
Bose wanted to reach a specific audience set to build awareness for its premium noise canceling earphones in key cities. Bose used location-based advertising to reach out to audience present within a 500-meter radius of all airports in India, users who visited 5-star hotels in the vicinity of airports and who lived in the top 10 percentile of residential areas. The users were shown dynamic banners and landing pages based on their location. The campaign delivered over 5,000 clicks every day for Bose during the campaign duration. Read the detailed case study on the campaign here.
Location-based advertising is at a nascent stage in India and not many marketers have experimented with the format. The costs are very effective and competitive compared to other advertising options available however the key concern for many marketers has been the accuracy of the location. Advertising technology companies believe that location data is up to 95% accurate and the results from the campaign should prove them wrong otherwise.