Location-based advertising: the opportunity behind the hype
Everything You Need to Know About Location-Based Advertising is the fourth EYNTK series from The Drum, designed to help readers and viewers get up to speed with some of the most important issues in today’s marketing industry in one short film – something they can watch in the back of a taxi on the way to their next crucial meeting on the subject.
Location data hit the mainstream a few years ago and has since become a critical element of a brand’s marketing strategy. This has largely been influenced by the immediacy factor; consumers now rely on their mobile devices for practically everything and can find what they want at the tap of a button.
Global leader in IT and networking, Cisco predicts that by 2020, there will be 5.5 billion mobile users, representing 70 percent of the global population. This presents a massive opportunity for brands and advertisers to target consumers based on their location data derived directly from their mobile device.
But despite the mass potential offered by location data to target consumers in new and more personal ways, there is still a degree of uncertainty among marketers about what it all means. The quality of location data has improved over the years – but who can marketers trust when it comes to deriving accurate location data from a consumer’s device? And how can they build on the insights gained from the data to enhance consumer profiles based on their real-time behaviours?
The Drum, in partnership with location-based marketing platform Verve, sets out to explore these very issues in its latest video series, Everything You Need to Know About Location-Based Advertising (EYNTK). The five-part video series, filmed in the back of a London cab, advises marketers on what they need to know about location data and how they can overcome any obstacles associated with it.
In the first instalment of the series, we look at the opportunity behind the hype, and how location data has gone from being ‘simply in the moment’ to providing a clear view of where the consumer’s device has been and the information that provides about the consumer.
Dan Calladine, head of media futures at Carat Global, says location is “one of those triggers” that can tell a marketer a lot about an existing or potential customer.
“If you are trying to solve the puzzle of who your most valuable customers are, then their location history or information about the types of locations they visit, can tell you a huge amount. That’s where the real opportunity lies rather than waiting for somebody to walk past a coffee shop and then sending them a voucher,” he says.
For Greg Grimmer, chief operating officer at Fetch, location-based advertising has reached its tipping point.
“In the old days, an advertiser might have made three commercials a year. This has now reached around 20,000 in a year. Every opportunity provides a big problem in terms of how we deliver it, but I think that's where the opportunity is - knowing exactly who someone is and delivering the right message to that person at the right time,” he says.
But if marketers don’t start with the right data, the information is useless. As Ian James, general manager international at Verve, points out: “The data market is maturing, so it’s becoming increasingly important that we understand where the data has come from, which in turn requires us to upgrade how we derive location data.”
According to the Location Based Marketing Association (LBMA), around 75% of marketers believe location-based marketing is important for their business, but only 65% of them think it’s accurate.
Calladine believes the quality of location data is getting better as times are changing. “Most platforms now use the best technology to ensure that the location data is verified. The accuracy of the location data within programmatic has got better since it came to scale three years ago,” he says.
Mungo Knott, director of insight and innovation at Primesight, agrees that when technology is at its best, the location data is trustworthy. But with the General Data Protection Regulation (GDPR) looming, there will be challenges.
“It’s important that marketers are gaining consent to use the data in the first place. With GDPR coming into play next year, customers will have far more control over what information is shared with brands and businesses. Brands will need to be transparent about how they will use this data and work in a way that makes any user feel comfortable sharing this,” he says.
Marketers need to develop a smarter approach to deriving location data. And as future episodes of the series will explore, this just forms the tip of the iceberg in terms of what brands and agencies can achieve with location data.
As Mark Slade, managing director of Location Services, says, the real power of location data is “yet to be completely grasped” by marketers.
“Too many campaigns are using coarse location data to target [consumers] based on broad assumptions about demographics, but there’s massive potential in using finer grained, real time location data to offer pinpoint targeting.
“I also don’t think marketers are yet aware of the potential for location in attribution. It can be a massively powerful tool for closing the online/offline attribution loop, helping brands to make better investment and targeting decisions over time,” he concludes.