Hyperlocal Targeting on the Mobile Platform (Street Fight Summit West 2013)


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Results from a new white paper from Street Fight Insights, sponsored by Moasis Global, that analyzes the effectiveness of new and old ways of targeting consumers through their mobile devices. From Steven Jacobs, Deputy Editor, Street Fight

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  • Our goal at Street Fight has always been to foster sustainable business models in the hyperlocal industry through content and community. We do that through our daily editorial, our events, and now, as the industry develops, through deeper research into key issues.In mobile, we saw a gap between the technologies and tools created by folks in this room, and the brands and media buyers that control the majority of spend in mobile today.The report takes a deep dive into the landscape of targeting vendors that exist today, how those targeting technologies work, how marketers and brands can implement, price, and measure a hyperlocal campaign; and then we took a look at some success stories, highlighting a handful of important case studies that will help a wide swatch of brands get started.We spoke with over 20 executives from hyperlocal targeting vendors, as well as the buy-side including executives at agencies like iProspect and Neo@ Oglivy, as well as brands like Best Western.
  • Read through the information on the slides…
  • 2012 was actually the year of mobile. Mobile, as a platform, has finally arrived.In the fall of last year, more mobile users were on a smartphone, capable of sharing latitude-longitude, than we not.
  • But it’s not enough that the technology exists. There needs to be a reason for consumers to use it.Developers have woven location into a third of 45 billion copies of applications that have been downloaded from Apple’s AppStore. Between checking-in on foursquare, finding a nearby ride on uber, or tracking a down a cheap hotel at the last minute via Hotel Tonight, there’s more reasons than even for consumers to share their locations with developers, and in turn, advertisers.
  • In fact, as of February 2012, three quarters of smartphone users reported using a location-based information service like Google maps or Yelp. That’s 19% jump in less than a year.
  • Particularly with positioning – the very heart of the industry - we saw a clear lack of understanding of the way in which publishers measure and collect location data from consumers.The bottom line is that not all location data is created equal. Location inventory comes in two forms: hyperlocal inventory, which includes latitude-longitude data, and location-enabled inventory, which includes either lat-long or geographic information such as a city or zip code. And even the way mobile phones find ourlat-long varies. Marketers tend to think that lat-long inventory only comes from highly accurate GPS readings, but in fact, the positioning algorithms on mobile devices use a combination of three positioning technique.
  • Boiled down to its elements, hyperlocal targeting is about reaching consumers based on where they are, or have been, in the real-world.The key targeting technology that most firms use today is the geo-fence. The geo-fence is an algorithm that’s used to deliver content to users within a geo-graph area. It essentially works like an alarm clock. But instead of being programmed to go off at a certain time, the technology is triggered when a mobile device enters a specific geographic area, such as a shopping district,ball park or city block. When a geo-fence is tripped, it can trigger a range of actions, everything from sounding an alert to remind a mobile user to pick up milk to sending a signal instructing someone’s car doors tounlock. Now, geo-fencing is a technology that can be implemented in a number of ways. We saw three methods for using a geo-fence.Ring fencing, in which a marketer will a geo-fence around a point of interest like a store, and ping everyone within a set radius. Place targeting, a form of geo-fencing that delivers content to mobile users at a specific venue such as a sports arena or store. And, a grid of hexagonal or square geo- fences, often called tiles.
  • However, geo-fencing still lacks the type of behavioral targeting that has made cookie-based retargeting so valuable on desktop.On mobile, Mobile consumers spend four out of every five minutes they’re ontheir devices in apps, but apps are prevented from sharinginformation with each other. That leaves potentially valuable user data trapped inside the apps. That’s where device profiling comes into the picture. The tactic delivers content to users based on their mobile device’s unique identifier, offering an alternative to cookie-based retargeting on mobile. Companies can use these device IDs to start building profile’s of a user past locations, providing a potential alternative to cookie based retargeting on desktop.
  • As an industry, hyperlocal targeting is still very much influx. Perhaps the industry’s biggest problems are the messy algorithms and standards that get passed off as location data.Recognizing the premium which marketers are paying for hyperlocal inventory, certain publishers, which do not have access to a users location but do have their zip code or city, use the latter, less valuable location information, to create a lat-long that they pass off as the user’s real location. And, according to David Petersen of Sense Networks, its substantial. He says that the mobile display advertising company filters out 70% of the hyperlocal inventory, which it finds on the mobile exchanges.
  • The pricing problem flows into a larger issue in hyperlocal targeting on mobile: measuring ROI. Mobile consumers are researching online and buying in-stores, making attribution vague at best. For instance, Google found that over a quarter of mobile users who search for local information make a purchase in-store, and yet the majority of the purchases are not attributed to a marketing campaign.Until vendors can find a way to demonstrate a clear connection between mobile engagement and offline commerce, it will be tough for marketers to justify the spend on the more expensive targeting techniques.
  • And advertisers are getting on board as well. According to BIA/Kelsey, more than half of mobile spend will go to location targeting advertising by 2016.The bottom line here is that the platform is quickly becoming ubiqutious, developers are making that platform useful for consumers, consumers are adopting these services, and marketers are responding.
  • Hyperlocal Targeting on the Mobile Platform (Street Fight Summit West 2013)

    1. 1. HYPERLOCAL TARGETINGON THE MOBILE PLATFORMSteven Jacobs | Deputy editor | Street Fighte: steven@streetfightmag.com | t: @stevenhjacobs
    2. 2. The report…• Why we created the report– Gap between brand awareness and existingtechnologies on mobile• What the report accomplishes– Examines today’s tools and techniques that uselocation data to help marketers reach the rightconsumers, at the right place, and in the right context• Our methodology:– Interviewed 20+ executives at hyperlocal marketingvendors, brands and agencies– Surveyed existing industry research and dataSTREET FIGHT
    3. 3. Here’s what we found…1) Industry is set to see rapid growth2) Hyperlocal targeting is not a commodity3) Data quality remains an issue4) Poor ROI metrics holding back investment5) Big brands are getting into the gameSTREET FIGHT
    4. 4. 1) Industry isset to seerapid growth...
    5. 5. 0.0%10.0%20.0%30.0%40.0%50.0%60.0%PercentageofmobilesubscriptionsSmartphone marketshareSMARTPHONE ADOPTION IS NEARLY UBIQUITOUS…As of September 2012, Morethan half of mobilesubscribers own smartphonesSTREET FIGHTSTREET FIGHTPLATFORMSource: “Smartphone Subscriber Marketshare,”comScore, February 2013.
    6. 6. THERE ARE MORE LOCATION-BASED MOBILE APPS THANEVER…1/3USECASEof the 45 billionapplicationsdownloaded fromApple’s AppStoreuses locationSTREET FIGHTSTREET FIGHTSource: “Unique in the Crowd: The privacy boundsof human mobility,” Nature, March 2013.
    7. 7. 12%55%18%74%Geosocial services Location based information servicesMay 2011 Feb 2012MORE CONSUMERS USE LOCATION SERVICES ON THEIRMOBILE DEVICES…STREET FIGHTSTREET FIGHT+19%+6%ADOPTIONSource: “Three—quarters of smartphone owners uselocation—based services,” Pew Internet, May 2012.
    8. 8. 2) Hyperlocaltargeting is nota commodity…
    9. 9. THERE’S MORE THAN ONE WAY TO DETERMINE A USER’SLOCATION…SmartphonePassive Opt-InIP-Targeting User reported Cellular Wi-fi GPSLat/LongZip Code, DMA, City, StateLocation DataSTREET FIGHTSTREET FIGHTPOSITIONING
    10. 10. TARGETINGGeo-fecning:An algorithm that’s used to deliver content to mobile users within a geo- graphic area.Ring-fencing: A formof geo-fencing thatdelivers content tomobile users withina certain radius of aspecified location..Place targeting: A formof geo-fencing thatdelivers content tomobile users at aspecific venue such asa sports arena or store.Grid-fencing: A grid ofhexagonal or squaregeo- fences, oftencalled tiles.HYPERLOCAL TARGETING IS NOT A COMMODITY…STREET FIGHTSTREET FIGHT
    11. 11. MOVING BEYOND THE GEO-FENCETARGETINGGolf course onTuesdayPrada storeon ThursdayFootballstadium onSundayDevice profiling: A form of targeting thatdelivers content to users based on theirmobile device’s unique identifier.• In hyperlocal, vendors can record adevice’s locations and then use thedata to deliver a marketing message tothe same phone or tablet at a laterdate.STREET FIGHTSTREET FIGHTDevice profiling uses locationas a real-world cookie…
    12. 12. 3) Data qualityremains anissue…
    13. 13. DIRTY DATALots of inaccurate location information…STREET FIGHTSTREET FIGHT“We filter 70% of the hyperlocalimpressions that come through mobileadvertising exchanges.”- David Petersen, Sense Networks• Some publishers have started toaggressively embellish thelocation information they passon to advertisers.37.6922 N, 97.3372 W
    14. 14. 4) Poor ROI metricsholding backinvestment…
    15. 15. ONLINE-TO-OFFLINE CONVERSIONSMeasuring ROI is still an obstacle…STREET FIGHTSTREET FIGHT26% of mobile users whosearch for local informationmake a purchase in-storeSource: “Our Mobile Planet,” Google, January 2013
    16. 16. 5) Big brands aregetting into thegame …
    17. 17. MOBILE + LOCALMobile marketers are investing in local targeting…$1.20 $2.30$3.90$5.70$7.20$9.09$2.03$3.09$4.77$5.83$6.86$7.702012 2013 2014 2015 2016 2017Non-location targeted Location targetedSTREET FIGHTSTREET FIGHT“More than half ofmobile spend will goto location-targetedads by 2016…“Source: “BIA/Kelsey’s Annual U.S. Local MediaForecast, 2012—2016,” BIA/Kelsey, March 2013.
    18. 18. Get a copyof the full white paper:It’s time to bridge the knowledge gap anddiscover vastly improved ROI.Hyperlocal Targetingon the Mobile Platformwww.streetfightmag.com/reportsSteven JacobsSteven@streetfightmag.com