HOW TO: Leverage Location for Better Ad Campaigns

David Staas is senior vice president of marketing at JiWire, overseeing the marketing and product management of JiWire’s location-based media channel that reaches the on-the-go mobile audience. He has more than 13 years of marketing and product management experience in the mobile and advertising industries.

Location isn’t new to advertising. Take the billboard on the highway — there because that brand knows its target audience will see it. Merchants have been placing signs in places where their target audience will see them since the beginning of commerce. Today more than $130 billion is spent in the U.S. each year on locally targeted advertising. Most of that spending isn’t digital, but rather, more traditional formats like billboards and newspapers — places where marketers are accustomed to advertising. So while location advertising may not be new, marketers can now digitally localize their ads. The question is, how do brands win in this new world of location media?

Build for Scale

One of the most exciting aspects of location is the explosion of new content and services. There are now tens of thousands of location-based mobile apps, and even more that have made location a key feature. Many of these apps provide great platforms to test location ideas. However, they don’t provide the audience size to roll out an impactful campaign or concept on a regional or national scale.

The key is finding balance. Advertisers must first develop campaign concepts that allow flexibility. Ask these questions: Can I scale this concept easily to all of my locations? Can I incorporate locations other than my own? Can I expand my target zone? Am I able to go beyond the immediate vicinity to engage consumers one mile, five miles, even ten miles away? If you can meet these qualifications, and reach an audience in the tens of millions, your location scale is justified.

“Locationize” Your Brand

Advertisers are used to evolving. They’ve “digitized” their brands using the Internet, “socialized” their brands with social media and now are learning how to “locationize” with the mass market adoption of location media. I use the term “locationize” because success requires more than just using location as a targeting attribute. Sure, you can deliver a standard, national ad to a variety of targeted zip codes or DMAs, but you’ll be missing out on the full opportunity. Add location relevancy to the creative and to the messaging itself.

There are three ways brands have experimented with this concept:

• Local messaging: Use different creative messages in different locations directly in the ad. In a national campaign, for example, a brand incorporated the Statue of Liberty into New York ads, and the Santa Monica pier into Los Angeles ads in order to incorporate a local element. My company found that this kind of campaign typically sees a 40% increase in consumer engagement compared to non-location-based ads.
• Include a local call to action: Highlight the address of the nearest store in order to drive foot traffic. We calculated that these campaigns average 100 to 120% increase in consumer engagement.
• Let consumers engage with a specific location: Mobile services like Foursquare or Gowalla provide the platform for people to check in to a location or a brand. Shopkick’s retail partners let you browse merchandise and earn points for visiting their store. At my company, we’ve created brand campaigns that identify all the stores near a consumer, provide walking and driving directions to that location and even allow customers to set appointments in each store. We’ve seen that the addition of location averages a 200% increase in consumer engagement. The more location-relevant an ad is, the greater consumers are likely to respond.

Consider Proximity

Not surprisingly, most consumers don’t spend all of their time in the immediate vicinity of your brand. Sometimes they may be in your store, and other times within the neighborhood or even miles away. Each distance presents an opportunity.

In recent research of more than 5,000 mobile consumers, 31% said that they most typically research something on their mobile device before purchasing it physically in the store. Mobile and location drive real world revenues. In a similar study done by my company, consumers shared how far they were willing to travel to get a good deal. When posed with discounts off of a $100 item, 55% said they would travel up to 15 minutes for a 10% discount. However, 45% said they would travel 30 minutes for a 25% discount, and another 40% were willing to travel an hour for a 50% discount.

This fascinating demand curve shows how consumers react via a distance-to-discount ratio. In practical terms, this means marketers can engage customers miles away with great results. By considering proximity, marketers can develop strategies beyond the checkin to generate new customers and to engage existing customers well beyond the neighborhood.

Redefine the Metrics

Every new form of media creates its own unique metrics, like the click-through rate created by digital advertising. Location gives us entirely new ways to measure advertising and thereby gain new insights around a brand’s business. Consider evolving the click-through rate. If we apply location and proximity, we can begin to look at click-through rates based on proximity to a brand’s location. How many people check in when they are in a store? What is the engagement rate of a campaign when people are within a mile of a store? Five miles? This insight helps brands understand how far people are willing to travel for their service or products.

Better yet, these metrics can surface potential insights around a brand’s distribution channel. What retail partners generate the most engagement? Are there pockets of high engagement where a brand doesn’t currently have a store? Considering the consumer data on distance-to-discount ratios, these metrics begin to inform the marketing mix.

For example, a consumer around the corner from a store can easily stop in as a result of a location-based ad. If the product is unavailable, it’s not a major imposition on the consumer’s time. However, the person willing to drive an hour for that 50% discount is another story — that customer’s ability to check on product availability beforehand takes on greater value. Different information has value at different proximities.

The combination of mobile and location advertising is already transforming media, content, services and commerce. Location media is achieving mass market adoption, and raising consumer awareness around the value of location services and advertising. There will be a lot of experimentation and innovation along the way, but these best practices will help advertisers achieve success earlier and more often as they explore how to “locationize their brand,” and ultimately have a scalable impact on their business.

Image courtesy of Flickr, william couch.

More About: advertising, business, foursquare, location-based, MARKETING, media

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