Study: Mobile Ad Geo-Targeting and Geo-Conquesting On the Rise

xAd | 08/22/2013

Mobile phones have quickly become the lifeline for many Americans, allowing people to stay in constant contact with family and business associates, and keep informed about the latest news and information. According to Pew, the average adult looks at his mobile phone at least 41 times per day, and this jumps to 109 times a day for young adults.

For advertisers, the mobile platform has presented several challenges to overcome, including the lack of screen real estate for banner advertising, forcing a pivotal shift in the way that brands and agencies must approach reaching users on the small screen. Native advertising for mobile is posited to be one viable solution, but it is also necessary to make ads more relevant to increase effectiveness.

New findings from the mobile ad company xAd reveal that geo-location targeting has become a dominant factor in how particular ads are delivered to consumers as they traverse their cities. According to findings from its latest report Mobile Location Insights Q2 2013, xAd analyzed campaign data across its network, revealing that over 90% of campaigns employed some form of geo-precise targeting in Q2 2013, up 30% from the previous quarter.

BIA/Kelsey (March 2013) projects that over the next four years, a large percentage of marketing budgets will shift to location.  In fact, for mobile specifically, location targeted mobile ads are projected to make up nearly 55% of total-mobile ad spend by 2017.

“We believe the future of advertising will center around location — with mobile being a very important delivery vehicle of this,” said Monica Ho, vice-president of marketing at xAd. “Ultimately, you make your marketing smarter through location. By leveraging location and other local context variables, marketers can now optimize when and where their ad messages appear which ultimately increases relevancy to the end user while reducing ad waste for the advertiser.”

According to the report, another mobile ad zeitgeist is what’s referred to as geo-conquesting –- targeting prospective customers when they are nearby a competitor’s physical location.

While this term may be new, the concept could make your ads smarter, and the process works very similarly to Competitive Inhibition from your Molecular Biology class back in college. Essentially, whoever gets there first, wins. Your mobile phone knows where you are around the city and if you are close to, let’s say, a Starbucks, the ad network could elect to show you a competitive ad for Peet’s Coffee just down the street (if they are advertising on the network), enticing you away from making a purchase at the first location. Conversely, geo-location technologies can be used to know when a user is close to Peet’s and then send them an ad or promotion that gets him to walk in the door.

More than 30 percent of xAd’s geo-precise campaigns, representing billions of monthly ad impressions, include geo-conquesting, and this trend is growing among national advertisers.

According to Ho, the top five brand categories that are heavily adopting geo-conquesting are restaurants, retail, financial services, travel and gas & convenience. Restaurant marketers, in particular, are taking advantage of mobile’s ability to capture the attention of potential patrons as they are thinking about visiting a competing restaurant to help move their brands to the top of the consumers’ consideration set for lunch, dinner, or anytime they have the urge – all in the hopes of changing their plans and filling their own seats.

Outback Steakhouse has successfully adopted geo-conquesting and geo-precise targeting to attract and engage to influence casual diners decision-making process, resulting in an 11-percent increase in conversion actions such as access to a store locator.

The advertising industry will soon depend on intelligent data like geo-location to fuel in-store traffic.

“Everything from your tablet or computer, to your phone, to free standing billboard units will become smarter about the type of content and ads it chooses to shows consumers based primarily on location context and behaviors seen in that specific local area,” said Ho.  “This can include the weather, the time of day, the type of businesses or points of interest a consumer may be around, etc. Now take the consumer’s existing location out of it and focus on taking past location history into account.  Now you can not only target those that are near your store with the promotion, but [also] those consumers who have visited your location (or that of your competitors) in the past.”

Article Originally Posted by Adotas