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Mobile Location Targeting: Implications for Advertiser Reach

BIA/Kelsey’s NATIONAL conference has come to a close and our team has had a chance to reflect on the discussion of the latest industry trends. One of the biggest themes of this year’s conference was how to leverage the growth of location targeting technology in the ever-increasing mobile world.

Michael Boland, Chief Analyst and VP of Content at BIA/Kelsey, shared some valuable data to highlight this growing trend. According to BIA/Kelsey’s research, mobile advertising spend clocked in at $13.25 billion in 2014. In 2019, that number is projected to be $41.63 billion. One of the main reasons for the projected jump is that companies will focus more on location targeting to reach the right audience, not just any audience.

Mobile targeting is far more complex than just determining a mobile user’s location at any given point in time. Location is actually a broad concept that encompasses where we live, where we work, how much money we make, what kind of food we like, and what we like to do in our spare time. All of these factors drive where we spend our money. With new mobile targeting technology, it is becoming easier for companies to track these important indirect variables to get a broad picture of a consumer’s habits and therefore target advertising to the right audience.

The simplest form of location targeting gathers contextual location data, such as a consumer’s current location and the places he or she spends time (home, work, school, etc.). This is achieved by simple geo-targeting through mobile advertising, which allows a business to leverage a consumer’s current location to make a sale. Businesses can also collect behavioral location data (what types of places a consumer frequents) and third party location data (what brands a consumer buys) to further understand what a consumer is interested in, how the consumer acts, and where the consumer shops, all for the purpose of drawing fact-based conclusions to target advertising.  

For example, Starbucks may know that I buy coffee at my local Starbucks once per week. That simple piece of information is useful to them.  However, if Starbucks also knows that I buy their coffee about three times as often when I am traveling, and that I travel once per month, they can really use that information to their advantage. When Starbucks can determine from geo-targeting that I am in an unfamiliar (to me) location, they can conclude that I might not know where the closest Starbucks is and that I will likely value targeted mobile advertising that informs me of the closest location. To take it one step further, if Starbucks also knows that I spend my weekends hiking, they may conclude that I might be more interested in marketing related to their corporate sustainability initiatives rather than their latest luxury latte.

Mobile location data is becoming more accessible to businesses to help them tailor their marketing efforts to individual customers and not take a “one size fits all” approach to advertising. The “dark side”, as Boland puts it, is that mobile location data can often be inaccurate and is therefore currently limited in its reliability. There are also obvious concerns about privacy.  These problems are being addressed, partly by companies that clean data before it’s distributed. Given how quickly mobile location targeting is growing, it is crucial for companies to monitor developments in this area and form long-term location targeting strategies that work best for their specific business and customer set.