Capturing Near Me Moments: How location-based mobile advertising is changing the marketing landscape

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1 Capturing Near Me Moments: How location-based mobile advertising is changing the marketing landscape A Digital Marketing Depot Whitepaper

2 Introduction: The mobile advertising opportunity Smartphone ubiquity has changed the way U.S. consumers communicate with brands. Consumers now spend more than half of their online time on mobile devices, according to comscore 1, identifying, researching, and connecting with businesses when they are on-the-go and away from home. Brand marketers are responding by spending more to reach increasingly mobile U.S. consumers. BIA/Kelsey expects location-targeted mobile ad spend to reach $6.7 billion in 2015 and increase to $18.2 billion by 2019 (see Table 1). Mobile s share of local advertising will jump from 5% in 2015 to nearly 12% in 2019, BIA/Kelsey projects, becoming the fourth-largest local media. 2 Table 1: Location-Targeted Mobile Ad Spend, (U.S.$B) U.S.$Billion $20.0 $18.0 $16.0 $14.0 $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 $18.2 $15.4 $12.3 $9.2 $ Source: BIA/Kelsey U.S. Local Media Forecast 2015 Update YP has also seen a consistent growth in the number of impressions and revenue for its location-based advertising product, which suggests that location-based ad spend will continue to climb, as mobile technology creates unique opportunities for businesses to reach consumers at a critical stage in their purchase journeys. More than three quarters of marketers are already using real-time, mobile location-based marketing techniques. 3 YP has seen an 88% increase in location-based advertising spend and 99% increase in the number of campaign impressions served year over year in Q National brands are driving mobile ad spend growth, as enterprise marketers increasingly recognize the value of near me moments to drive sales in local stores, dealers, and franchises. Adoption of mobile local advertising tactics, such as geo-fencing, click-to-call, and click-to-map continues to grow among national advertisers. 5 In response, more and more consumers are using their mobile devices on the purchase journey. Nielsen research found that 42% of consumers sometimes or often use mobile devices while shopping in a store to help the buying process. 6 Similarly, half of mobile users are most likely to visit a store after conducting a local search, according to Google research Third Door Media, Inc

3 Emerging location-based mobile advertising strategies and tactics Mobile advertising tactics are rapidly evolving beyond geo-fencing campaigns which use GPS technology to enable advertisers to deliver ads based on where users are at the moment the ad is delivered -- to meet consumer demand for faster, more accurate local information. Location-based mobile advertising is defined as a mobile ad or campaign that uses user s location to inform creative, calls to action and data served to customers. Location-based ad options today include: click-to-map click-to-call in-store beacon technology location-based targeting mobile retargeting cross-device retargeting Advertisers continue to benefit from the evolution of marketing technology. For example, in-store beacon technology enables marketers to deliver special offers to consumers based on their proximity to products within a store or dealer location. More national brands also are using local marketing automation (LMA) tools to connect real-time inventory information to their mobile websites and apps, allowing consumers to find the closest location offering their desired products. The following section highlights location-based targeting and cross-device retargeting, two of the more effective tactics used by today s marketers. Location-based targeting Unlike more traditional advertising methods, location-based mobile advertising is adaptive and effectively targets specific consumer audiences based on location as well as demographic and search data that can be obtained from public or private sources (see sidebar on the right). Enhancing locationbased audience data The following types of data are available from public sources, ad exchanges, mobile publishers, and data aggregators, and can enhance the value and accuracy of location-based targeting: App data: Mobile apps continuously collect data on social media mentions, sales or downloads from publishers (i.e., name, description, publisher and price), and dynamic rankings or reviews. Household demographics: The U.S. Census collects demographics such as gender, number of family members, ages, etc. for every U.S. household. Purchase data: Aggregators such as Acxiom, Catalina Marketing, Datalogix, and Dunnhumby collect purchase data from retailer loyalty programs. Publisher data: Includes engagement metrics, device data, location data and connection data. Source: Mobile Marketing Association YP, for example, offers 150 million proprietary location-based profiles to provide sophisticated targeting options and insights that reach consumers on their mobile devices with highly relevant messages. User location data generated by a mobile device takes the form of latitude and longitude coordinate pairs. But location data itself can provide a plethora of user information beyond latitude and longitude. Location-based behavior can indicate the demographics of a consumer (i.e., age, gender, race, income, etc.) as well as consumer psychographic traits or preferences in travel, dining or retail brands. Location-based user profiles and aggregated audiences can offer additional and deeper insights into mobile user behavior. Once a mobile user profile is developed, that profile can be used to inform ad targeting regardless of where the device is at the time of the ad placement. Measuring the impact of location-based mobile advertising has become more efficient and accurate due to several factors. The first reason is the sheer growth in the number of users with mobile devices, as well as the number of apps they use and the time spent on those apps. Location-based mobile ads rely on apps installed on mobile devices for location data. As more data has become available, it has become easier to make the connection between the apps and the real-world behavior of the app user. Second, many brands have added more features to their mobile apps and marketed them more aggressively, which has led to more use of apps at all time, including while shopping, a critical time when many brands are trying to influence and understand consumer behavior Third Door Media, Inc

4 The result is that mobile location data can now more effectively measure and make a clear correlation between locationbased mobile advertising campaigns and an increase in subsequent store visits. According to YP s location-based insights report generated from its internal data, brands in three vertical markets automotive parts and services, casual dining, and travel and lodging all experienced a double-digit lift in store visits since implementing location-based mobile campaigns with YP. Six additional vertical markets have seen high single-digit lift as well (see Table 2). 8 Table 2: Store visit average lift Automotive parts and service Travel and lodging Casual dining Automotive Business services Retail Financial services Insurance Home and garden 10.4x 9.8x 9.3x 7x 8.2x 6.3x 4.7x 23x 21x Source: YP The advantages of mobile retargeting Retargeting consumers on mobile devices holds particular promise for national brands. Brand marketers can identify shoppers who have visited local stores and retarget them with timely and relevant ads, effectively closing the online-offline gap. Retargeting also enables marketers to continuously target prospects who are frequently near selected stores, helping local franchisees or retailers attract and convert new customers. Due to the presence of unique IDs within mobile apps and across apps within mobile ad networks, this approach is ideal for increasing conversion through multiple touches. Table 3: Emerging cross-device retargeting opportunities Desktop search query for local hotel stay Monday morning Monday afternoon Clicks to Hotel A site without making a reservation Clicks to Hotel B site without a decision Visits Yelp and TripAdvisor from mobile phone to see guest comments on Hotels A and B Tuesday morning Tuesday evening Posts Facebook comment from tablet seeking recommendation s from friends for hotel stay Views retargeted display ad on mobile phone from Hotel A Clicks on retargeted display ad on tablet from Hotel B to make purchase Wednesday Source: YP 2015 Third Door Media, Inc

5 Cross-device retargeting Consumers increasingly use multiple devices to search for and connect with local businesses. Well more than half of online consumers readily switch devices to complete a local business search, according to an October 2014 survey commissioned by YP and conducted by comscore. 9 In a study commissioned by Tapad, Forrester also found that 70% of connected consumers currently use three or more devices every day, using a variety of screen sizes, search, and discovery methods at all stages of the purchase journey. 10 But following consumers across devices to retarget them with relevant offers has been a challenge for brands. Proper optimization of ad messages requires visibility into all of the consumer s device touchpoints whether smartphone, tablet, laptop or desktop. Successful cross-device campaigns must not only identify mobile device activity, but also create relevant connections to the desktops and laptops that are still used in many U.S. households. The issue with mobile retargeting is that the cookie upon which retargeting depends works on desktop but doesn t work on mobile. Fragmentation across devices, operating systems, browsers, and apps means that traditional ad tracking has been nearly impossible. Fortunately, technology is evolving and enabling national brands to continue their dialogue with prospects regardless of their current location or device used. Emerging approaches include device fingerprinting, IP-based targeting, and modeling solutions such as Tapad s Device Graph technology, which uses proprietary modeling techniques that link related devices to form a more unified cross-device view of a consumer. For example, the consumer journey may begin with an initial search query expressing interest in finding a local product or service (pizza, oil change, hotel, etc.). After reviewing search results, however, the consumer s focus shifts to another online activity without making a decision in relation to the first query. Research suggests that such consumers typically remain in active consideration mode and are open to suggestions post search. Brand marketers that target these consumers with display ads in the minutes, hours or days immediately following their searches can capitalize on the purchase opportunity. These retargeting messages can contain additional product details, incentives or offers to encourage the consumer to act (see Table 3). Conclusion The explosive growth and adoption of smartphones has resulted in a fundamental shift in how brands and marketers are spending on media. Marketers are increasingly acknowledging the fact that consumers are spending more time on mobile devices than desktop, and they are using multiple devices when searching for a product or service to buy or when consuming content. The always on and connected nature of mobile devices is providing a large amount of location data, which is being used to derive consumer intent and solving a big challenge for marketers, connecting the mobile advertising spend to the visits to the brick and mortar stores. Marketers are also able to effectively measure secondary actions such as number of leads from lead forms, phone calls made to store, coupons redeemed, and store locator searches with location based advertising. Cross-device targeting is enabling marketers to reengage consumers when they switch devices, continue telling them their brand or product story, and lead them to a purchase path. Brands and marketers that are adapting fast to the changing consumer habits, are seeing more brand engagement and increased ROI. n 2015 Third Door Media, Inc

6 Sources: Capturing Near Me Moments: 1 comscore Media Metrix Multi-Platform, U.S. 2 BIA/Kelsey U.S. Local Media Forecast 2015 Update. 3 BIA/Kelsey Think Global, Target Local: Multi-Location Advertising in the Mobile Age. 4 YP State of Location-Based Advertising, Q BIA/Kelsey U.S. Local Media Forecast 2015 Update. 6 Nielsen s The Mobile Consumer: A Global Snapshot. 7 Google s Understanding Consumers Local Search Behavior. 8 YP State of Location-Based Advertising, Q comscore YP Value Proposition Study Report, October 2014, commissioned by YP. 10 Forrester The New Path-to-Purchase, July 2014, commissioned by Tapad. About YP: YP is a leading local marketing solutions provider in the U.S. dedicated to helping local businesses and communities grow. YP s flagship consumer brands include the popular YP SM app and yp.com, which are used by more than 70 million visitors each month in the U.S. (Internal Data, May 2015). YP solutions include online presence, local search, display advertising and direct marketing. YP has delivered up to 10x lift in store visits with its location-based mobile advertising solution. YP solutions and services are backed by thousands of media consultants and customer service professionals in local markets across the U.S. with relationships spanning nearly half a million advertisers. For more information, visit yp.com. About Digital Marketing Depot Digital Marketing Depot is a resource center for digital marketing strategies and tactics. We feature hosted white papers and E-Books, original research, and webcasts on digital marketing topics -- from advertising to analytics, SEO and PPC campaign management tools to social media management software, e-commerce to marketing, and much more about internet marketing. Visit us at Digital Marketing Depot is a division of Third Door Media, publisher of Search Engine Land and Marketing Land, and producer of the conference series Search Marketing Expo and MarTech Third Door Media, Inc

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