November 8, 2013

Geo-targeted Mobile Ad Spend On the Rise

As mobile budgets swell, brands are eager to find ways to make their ads contextually relevant to consumers. As a result, the use of geotargeted mobile display advertising is on the rise, as are campaign results, according to a new eMarketer report, “The Effectiveness of Geotargeted Mobile Ads: Location Data Pumps Up Performance.”

However, not all geotargeted ads are created equal. For example, geotargeting at Facebook—the largest recipient of mobile display ad dollars, eMarketer estimates—enables advertisers to target ads at the country, state, city and ZIP code levels. Twitter’s geotargeting parameters are similarly broad. Yet some mobile ad networks and premium publishers enable brands to zero in on users within a specified radius of GPS coordinates. And other location-based apps and services allow advertisers to target ads to mobile users indoors, such as within a retail store or car dealership.

The more exact the targeting, the more limited the inventory. But not all brands are competing for GPS-level inventory, as some have found ads targeted to larger geographic areas meet objectives best.

Spending on geotargeted display advertising is currently small—but growing rapidly. BIA/Kelsey estimated advertisers in the US would invest $725 million in local mobile display advertising in 2013, which is nearly twice the amount spent last year. Looking ahead to 2017, the research firm forecast total expenditures would more than triple over the next four years, to over $2.74 billion, as more national brands realign strategies to sync up with the increased use of mobile devices. In addition, as brands learn (through testing) how best to leverage the location tracking capabilities of smartphones and tablets, spending is expected to rise.

For sure, mobile display ads are just one channel brands use to deliver location-targeted messages to mobile users—mobile search ads, text messages, push notifications and in-app messages are among the others. The bulk of mobile local ad dollars will go toward local search, according to BIA/Kelsey’s projections, but display spending is growing at a near-equal pace.

“We’re seeing enormous interest in this type of marketing (geotargeted ads) from mainstream brands—far more than we did 18 to 24 months ago,” said Alistair Goodman, CEO of location-based advertising provider Placecast. “Brands are realizing that consumers are increasingly using the mobile device to navigate the physical world, and they have a unique opportunity to put a message into that [experience].”

Consumers have always been moving targets, and marketers excel at staying one step ahead. To have that advantage in the physical world, however, brands need a keen understanding of real-time geotargeting tactics and, increasingly, the insight to recognize that leveraging historical location data can be equally as powerful as real-time geotargeting.

This article was originally published by eMarketer

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