One of the major advantages of mobile advertising is location; the fact that your phone can pinpoint where you are at a given moment in time, enables advertisers to deliver ads that are relevant to your physical location.

The ability to target consumers with real time ads that are not only contextually relevant to what they are looking at on a mobile site or app, but also relevant to where they are, increases the relevancy of messaging for advertisers and provides publishers with a hook to drive direct response.

And whilst geo-targeting across other advertising channels such as TV, print or online may be nothing new, geo-targeting on mobile goes one step further by enabling advertisers to target consumers on the move, via nomadic devices, based on their proximity to a particular store or service provider at the exact moment that the ad is served. 

We are seeing this play out in a number of ways, with several business models coming to the fore. The first of these is around social media applications with location check-in features, such as Facebook, FourSquare and PlacePop. These features enable consumers to receive promotional offers from outlets close to where they are at a specific time.

The second is mobile couponing, which is being driven forward by players like Groupon, LivingSocial and Amazon. By clicking on a mobile banner, consumers can redeem coupons in-store at point of sale. Advertisers can target their campaigns to appear on the devices of any consumer browsing a mobile site or app within a given distance of one of their outlets.

The third is classified advertising. Local, service-based businesses, such as solicitors or plumbers, are increasingly using geo-targeted ads on mobile to get their message in front of local audiences, without the wastage associated with advertising on a wider scale.

Network enabler
Mobile ad marketplaces like Adfonic enable advertisers to target consumers at local levels across mobile sites and apps, with exceptional geographic precision. At Adfonic, we currently support real-time, geo-targeted ads in the UK, to postal town level, and in the US, to state and Nielsen DMA (Designated Marketing Area) level; A DMA is roughly equivalent to a city and its suburbs. Advertisers determine which geographic regions they want to target, and our platform then determines in real time which ad campaigns a user should be served, by identifying their physical location.

Advertisers can monitor, again in real time, how specific locations are performing in terms of delivering clicks and impressions, and adjust the campaign accordingly to optimise budgets on the best-performing locations.

Advertiser benefits
Geo-targeted campaigns offer a number of benefits to advertisers. The first, obvious though it may sound, is that by enabling brands to reach a location-specific audience in a particular region or city, target audiences are selected with greater precision, and wasted impressions are reduced. By focusing the campaign on the parts of a population for whom it’s most relevant, an advertiser can increase the propensity of consumers to click on their ad, ultimately driving up return on investment.

Chris Gale, Client Services Director at Odyssey Mobile Interaction says: “As location-based services continue to grow, more of our clients are exploring proximity marketing via mobile. When applying geo-targeting to our clients’ mobile marketing campaigns, it enables us to reach the right audience, in the right place, at the right time. By being able to add a deeper layer of relevance to the message, our clients have experienced higher levels of engagement amongst users.”

Geo-targeting at work
We’re already seeing great examples of geo-targeting at work, as part of a seamless mobile experience that takes the consumer from initial impression through to in-store purchase or coupon redemption.

In the US, we have worked with a fast food chain to target consumers in a specific DMA with an ad campaign which directed the consumer to a promotional microsite, where they were able to select a mobile coupon to redeem in-store.  In another campaign, a US hotel chain targeted selected states in the US where their brand is most popular, and where there is a high customer demand. The campaign enabled the client to connect geographically-targeted consumers with a direct call to action – in this case a click-to-call facility, offering a booking discount.

We’re also seeing examples of how powerful geo-targeting can be, when combined with other contextual, demographic and day-part targeting tools, which together, arm advertisers with very powerful information about a consumer’s likely interests. 

Andrew Osis, President and CEO of Poynt Corporation explains: “There is a universe of mobile consumers who are searching for local retailers, theatres and restaurants. Poynts application seeks to bridge the gap between the consumer and the retailer by using location, time of day and keyword queries to deliver offers where and when that consumer is looking to transact. As an example, a person performing a restaurant search at 8:30 am is likely looking for somewhere to eat breakfast. It would make sense then, to deliver them an offer for a breakfast promo or discount. This contextually- and geographically-relevant ad was delivered to them at the exact moment that they were looking to make a purchase.”

Moving mainstream
Geo-targeting within mobile is yet to become mainstream, but is it firmly on brands’ and agencies’ radar, and we anticipate geo-location campaigns will ramp-up during 2011. There are several key drivers at work that will see geo move further towards centre stage.

As agencies learn what works and what doesn’t, and educate their clients, we believe brands will come to demand the additional value that geo-targeting brings to the mobile advertising party. Combine location information with demographic profiling, and we believe you have a very strong targeting tool at your disposal.
Increasing smartphone penetration will create the scale required to drive geo-location business models forward, and kick-start advertiser spend in a big way. And major infrastructure developments within NFC and mobile payments will also help demand for geo-targeted advertising to surge by closing the loop and facilitating the entire process, from ad view to final purchase, to be conducted on a mobile phone.

The results that we’ve seen among early adopters of geo-targeted campaigns are encouraging, and as more people join the smartphone society, opportunities will increase for brands and retailers to target mobile-savvy consumers on the move with real-time, contextually relevant offers and promotions that can be instantly redeemed close by. We can only see the trend heading one way.

Paul Childs is chief operations officer at Adfonic