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More precise mobile location targeting use by advertisers is skyrocketing: report

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March 12, 2013

Tiffany ad on the Weather Channel app

The use of mobile location-based targeting by advertisers is skyrocketing, with search-behavioral targeting experiencing the highest rate of growth, according to a new report from xAd.

Mobile local ad network xAd found that 95 percent of national advertisers are now leveraging some form of mobile location-based targeting. The fastest-growing mobile targeting technique was targeting based on geo-precise mobile search behavior, or search behavioral targeting, which grew at a 212 percent between the first quarter and the fourth-quarter of 2012.

“Throughout 2012, there has been a dramatic shift in mobile location targeting strategies leveraged by national advertisers,” said Dipanshu Sharma, CEO of xAd, New York.

“Specifically, we have started to see sizable shifts from standard geo-targeting, most commonly utilized in desktop or traditional marketing, to geo-precise targeting, which leverages mobile’s unique ability to target users based on their specific location,” he said. “I think this shift signals the growing awareness by mobile advertisers that a consumer’s exact location is a powerful factor in reaching and engaging desired mobile audiences.”

“What was most surprising was how quickly this shift occurred.”

More precise geo-targeting
The report reveals that advertisers have started to shift from the standard geo-targeting often seen in desktop marketing and based on ZIP code, city or DMA area to geo-precise targeting, which leverages mobile’s unique ability to target users based on their specific location.

This type of mobile-location targeting has been shown to be a powerful factor in reach and engaging desired mobile audiences.

Although search behavioral targeting saw the most growth, geofencing  the ability to reach a consumer based on a set proximity or distance away from a specific place or point of interest  was the most popular targeting technique overall, ending the year with more than 55 percent of campaigns using this type of targeting.

However, not all forms of mobile location targeting are growing. Standard geo-targeting declined from 64 percent of campaign targeting in the first quarter to just 13 percent by the fourth-quarter.

Stronger performance levels
The shift toward more precise mobile targeting techniques can be attributed to the increased performance and efficiency experienced by advertisers using these techniques.

Per the report, across campaigns that leveraged more precise geo-targeting, ad waste was reduced on average by 20 to 30 percent.

At the same time, ad performance increased by double digits.

Search-behavioral targeting provided the highest lift on average, increasing performance 60 percent over the industry benchmark.

Place-based targeting was a close second, delivering a 55 percent lift.

Throughout the year, locally targeted display averaged a click-through rate of 0.8 percent, while targeted search had a click-through rate of 8 percent.

User location
With mobile users typically on the go, the top businesses searched via mobile throughout the year were local restaurants, gas stations, transportation and hotels.

The quarterly report, “Mobile-Local Performance Stats,” is based on the 100 million mobile users xAd sees per month.

“A user’s location is an essential component of the mobile experience,” Mr. Sharma said.

“For advertisers, it provides insights into who this consumer might be, what they may be doing and what they may be interested in,” he said. “The power of this location data not only allows advertisers to reach specific audiences in mobile, but also provides the ability to serve the most relevant information or messages to these target users.

“As a result, mobile ads that leverage the relevance of location in both targeting strategies and creative, will deliver the highest conversion rates for advertisers.”

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York

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