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Is Location Based Advertising the Future of Mobile Marketing and Mobile Advertising?
Posted on January 18th 2013
Along with content marketing I don't think there's a more ubiquitous phrase right now in the world of marketing and advertising than anything that starts with the word "mobile." Everyone has their opinion, their idea, their beliefs and so on when it comes to mobile marketing and mobile advertising.
Just this past October yours truly wrote a piece entitled Mobile Marketing - The Elephant In The Room For Marketers. As I wrote then and still believe today "The fact of the matter is that mobile marketing – despite all its continued hype and promise has been severely under utilized by marketers of all shapes and sizes.
It's as if every marketer and advertiser collectively sees the future is in mobile marketing and advertising but more often than not does not know how to best go about maximizing this increasingly burgeoning space. Earlier this month my fellow Forbes colleague Bruce Rogers wrote a great piece on a mobile audience predictive analytics company called Sense Networks.
For his piece Rogers spoke with Sense Networks CEO David Petersen who said he thinks mobile advertising and marketing is "still broken." Petersen identified two specific problems for marketers when it comes to mobile: targeting capabilities and eCommerce.
I was fascinated by the article from Bruce and about Sense Networks who - according to Petersen, use "big science to mobile location data for predictive analytics in advertising."
So I decided to reach out to Mr. Petersen myself to delve a little deeper. I wanted to get his take on mobile marketing in general, if 2013 would indeed be the "year of mobile." I also asked him to clear up any myths that are out there regarding mobile marketing that may in fact be hindering marketers' ability to seize the golden opportunity that lies before them.
And I also wanted to ask him why he thinks location based advertising is unlike any other platform and finally what makes Sense Networks' proprietary systems different.
SO: For years now marketers and advertisers have been told this is the "Year of Mobile." Why do you think 2013 will be different?
DP: A number of reasons. First, we are at a tipping point in consumer usage of this "new" mobile medium. Studies are showing that mobile is on the wrong side of a monetization gap. While the average consumer now spends a significant percentage of their time consuming media through mobile, the percent of advertising budgets spent in the category is lagging well behind. You can see it as you look around when you are walking, shopping, etc. and everybody is using their phone. I use my mobile devices more, now, than I use my laptop. Secondly, the mobile ad ecosystem is now sufficiently robust to support what marketers want: legitimate content choices on where to put ads, different formats like tablet vs. phone, banner vs. interstitial, and legitimate targeting via companies like Sense Networks. And lastly, payment mechanisms to support mobile commerce are now a big focus for companies like Google, PayPal, and likely Amazon. This is the year that monetizing mobile won’t just be talked about – it will be achieved, thanks to the ability to harness Big Data and truly understand mobile consumers.
SO: What do you think is the biggest myth or myths when it comes to mobile marketing and advertising?
DP: Two come to mind. The first is the state of ad targeting technology in mobile. When we started in this, we wondered how we could develop a competitive advantage when every ad network website we looked at said they had already completed Nobel-prize winning ad targeting. But as we've dug in to the industry over the last year, we found out that almost none of it is true. So the message to advertisers is to make sure you are working with somebody who can put their money where their mouth is on ad targeting.
The second is a bit of a surprising finding in location-based advertising: there is a lot of "geofencing" today in the industry, where brand advertisers wish to advertise to people within a certain location of a store. For most of the campaigns we've run, we have not found that "being near a store" drives a lot of action by the consumer. And it's not just us -- we've heard the same thing from friends at the most cutting-edge advertising agencies. It makes sense -- it's hard to imagine swaying consumers from their intended plans to immediately take advantage of an offer, especially if it's not a screaming deal. If you told me "25-cent cupcakes, block away, next 10 minutes only", I might be motivated to act immediately. As you start to soften the offer, the mere fact that you are nearby doesn't weigh as much in the consumer's mind.
SO: What makes location-based advertising different from other advertising mediums?
DP: Mobile location data and the behavioral insights it reveals can deliver mobile audiences based on actual consumer activity. Facebook can infer Fans have interest and positive attitude about a brand, but location-based advertising can deliver actual shoppers using both real-time and historical data, and for example, show us where this user actually shops and eats. This translates into real customer results.
Leading retailers, brands and quick serve restaurants, including Quiznos, use Sense Networks' location-based advertising to reach highly relevant mobile audiences. Quiznos saw a significant number of mobile coupon redemptions following a campaign with Sense. This increase in response is the results of targeting local, mobile consumers that demonstrate certain behaviors that align with the Quiznos’ customer.
SO: What do advertisers and marketers need to know when it comes to the issue of consumer privacy in relation to using location based advertising?
DP: Marketers rightly want to be assured that digital ad solutions are privacy-safe, both because it's the moral thing to do and they want to prevent negative blowback on their advertiser customers. This is especially important in mobile because it has the potential to illuminate a lot of your real-world behavior. So you want to work with parties who are committed to being on the “up and up” when it comes to privacy. Now, as an industry expert I can tell you that there is a sea of mobile information out there in the digital ad ecosystem, and the question is how to you shape it and regulate it to make it privacy-safe.
SO: What is AdMatch™ and Retail Retargeting™ and how do they differ from other platforms out there?
DP: AdMatch extracts user attributes from location data using machine-learned models. We can look at user location data over time and ascertain behavioral traits about a consumer, such as if they are a business traveler, outdoor enthusiast or they frequent fast food restaurants. We apply predictive analytics to over 1,000 behavioral attributes and build audiences through individually matching users with ads.
Retail Retargeting applies these machine-learned algorithms to identify mobile users who are customers at businesses with retail locations. We can identify and re-target mobile consumers when they are no longer at the store. Since 80 percent of purchases are planned as opposed to impulse-purchases, we are helping retailers build loyalty by reaching their audiences while they are in the planning stage for future purchases. Some of the early failures in mobile advertising are due to poor timing and sending irrelevant offers to consumers because they aren’t based on behavior and location data. Interestingly, we also find retailers often want to identify shoppers at competitive stores as well.
Ok, so what do you think?
Is location based advertising the future of mobile marketing and mobile advertising?
What ways are you using mobile marketing and advertising in your overall strategies?
Named one of the Top 100 Influencers In Social Media (#41) by Social Technology Review and a Top 50 Social Media Blogger by Kred, Steve Olenski is a senior content strategist at Responsys, a leading global provider of on-demand email and cross-channel marketing solutions.