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eMarketer Webinar: Location Matters—Using Mobile Location Data to Drive Actions and Sales

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Marketers are spending more each year on location-targeted ads and other location-aware messaging and promotions. Topics in this webinar include: How many consumers are sharing location data with marketers, and how they feel about it; How good the location data is on the marketer side, and what they can do with it; What tactics are marketers using to drive real-world behaviors with digital messaging; How marketers are using location data to understand online-to-offline commerce.

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eMarketer Webinar: Location Matters—Using Mobile Location Data to Drive Actions and Sales

  1. 1. © 2016 eMarketer Inc. Made possible by Location Matters: Using Mobile Location Data to Drive Actions and Sales Cathy Boyle Principal Analyst, Mobile September 29, 2016
  2. 2. © 2016 eMarketer Inc. Introducing the three main characters in this “location matters” story 1 The consumers 2 3 The data The marketers
  3. 3. © 2016 eMarketer Inc. Part I: US Consumers
  4. 4. © 2016 eMarketer Inc. US Consumers 64% will use a smartphone regularly in 2016. On average, they’ll spend 3 hours and 18 minutes daily using apps* * internet-connected apps Source: eMarketer, April and August, 2016
  5. 5. © 2016 eMarketer Inc. Nearly all US adult smartphone owners have used location-based services on their phone
  6. 6. © 2016 eMarketer Inc. Two ongoing trends will drive the absolute number of location-based service users higher 1 2016 growth rate for US smartphone users +8.7% Source: eMarketer, March and August 2016 2 2016 growth rate for US mobile app users +4.9%
  7. 7. © 2016 eMarketer Inc. Plot twists! Three of them have occurred so far this year Each has likely influenced consumers’ attitudes toward sharing location data
  8. 8. © 2016 eMarketer Inc. 1. The confrontation between the US Justice Department and Apple over smartphone security in early 2016 VS It likely heightened consumers’ concerns about the privacy implications related to sharing their location via a smartphone
  9. 9. © 2016 eMarketer Inc. 2. Snapchat usage took off More people in the US will use Snapchat this year than use Twitter—58.6 million vs. 56.8 million, respectively Source: eMarketer, June 2016
  10. 10. © 2016 eMarketer Inc. The use of Snapchat’s geofilters doubled in three months Over 1 billion geofilters were being viewed daily as of late August 2016, double the number from earlier in the summer Source: USA Today, August 2016
  11. 11. © 2016 eMarketer Inc. 3. Pokémon Go launched on July 6, 2016 By month’s end the app had 25 million US users Source: comScore, September 2016
  12. 12. © 2016 eMarketer Inc. Pokémon Go requires the user to have location-sharing services turned on
  13. 13. © 2016 eMarketer Inc. Location-sharing is integral to four of six fast-growing apps in the US Fitbit and Bitmoji were the other two fast-growing apps noted by comScore Source: comScore, September 2016 % Change in US adult users since June 2014 +195% +824% +220% +492% Ranked in order of the number of US unique users
  14. 14. © 2016 eMarketer Inc. Employing this handful of best practices will increase opt-in rates:  Explain why and how location sharing will improve the app experience  Deliver on the promise that location sharing will provide value  Ease the user into the “official” opt-in request  Don’t ask for more permission than required for delivering a compelling user experience
  15. 15. © 2016 eMarketer Inc. Part II: The Data
  16. 16. © 2016 eMarketer Inc. Location data quality remains a challenge; experts say much of the data is bad “We throw out 80 percent of data coming from the bid stream because it’s completely inaccurate.” —Steven Rosenblatt, President, Foursquare “We throw out 80% to 90% of mobile impressions because the lat/long data is not accurate enough.” —David Bairstow, Vice President, Product, Skyhook Wireless “The problem with the location data set on the exchanges is 95% to 97% of it is bad.” —David Shim, Founder and CEO, Placed
  17. 17. © 2016 eMarketer Inc. Inaccuracies in location data can manifest in two ways 1 21 x -3,339584 y 3,339584 X Incorrect latitude and longitude coordinates for a mobile device at a specific point in time 2 x -3,339584 y 3,339584 =Target X Incorrect point-of-interest or “place” data for the coordinates provided
  18. 18. © 2016 eMarketer Inc. Steps are being taken to sort good data from the bad, and to raise awareness of the problem  Location-savvy advertising networks, demand-side platforms (DSPs) and data management platforms (DMPs) are weeding out the bad data from the good  Industry groups are continuing their efforts to improve data quality – The Interactive Advertising Bureau (IAB) issued its first mobile location data guide for publishers in February 2016 – The Media Rating Council (MRC) is due to circulate its first set of location guidelines before the end of the year
  19. 19. © 2016 eMarketer Inc. Location experts are looking forward to the MRC’s guidelines “Having an independent source that says what vendors need to show in order to substantiate their promises is going to weed out any bad players.” —David Shim, Founder and CEO, Placed The guidelines will address many aspects of location, including: 1. The leading methods used to derive location data 2. The varying degree of precision and accuracy of each method 3. Pairing a device location to a place 4. Taking altitude and speed into account 5. How to share location data across the advertising ecosystem 6. Privacy disclosures and compliance
  20. 20. © 2016 eMarketer Inc. The MRC hopes to achieve two goals with the location guidelines “The best case scenario will be if vendors actually enter the process and get audited and accredited against the guidelines.” —David Gunzerath, Senior Vice President and Associate Director, The Media Rating Council 1. Increase awareness of the strengths and limitations of the various techniques 2. Give location data users the leverage they need to have more informed discussions with providers
  21. 21. © 2016 eMarketer Inc. Reports of poor data quality haven’t rattled marketers’ confidence in the power of location data Roughly 70% of marketers polled by the LBMA in early 2016 said location data was valuable, actionable and accurate
  22. 22. © 2016 eMarketer Inc. Part III: The Marketers
  23. 23. © 2016 eMarketer Inc. Marketers found ways to capitalize on the Pokémon Go craze Image source: Reddit  Some used old-school ways to lure players in, such as window and sidewalk signage  66% of Pokémon Go players polled by MGH Inc. said they had seen businesses promoting Pokéstops and Pokémon-themed products, services and discounts Source: MGH Inc., August 2016
  24. 24. © 2016 eMarketer Inc. Other businesses bought a “lure” via the app to attract crowds of players “One pizza shop owner in New York paid a modest $10 through the app to temporarily draw a dozen of the imaginary characters into his restaurant, and saw business leap by 75% as players came in to ‘catch ‘em all.’” —New York Post Source: New York Post, article published on July 12, 2016
  25. 25. © 2016 eMarketer Inc. “Lures” didn’t work for all businesses, however “We bought lures for a couple of days for two restaurants—one in Oklahoma City and one in Overland Park [Kansas]. People showed up, but almost zero made a purchase.” —Kirk Williams, Franchisee, Rock & Brews
  26. 26. © 2016 eMarketer Inc. Niantic has begun offering sponsored locations in Pokémon Go as a form of paid advertising  Sponsored locations have only been deployed in Japan, so far  McDonald’s was the first big brand to jump on board  In September 2016, Japanese mobile operator SoftBank announced it too would have Sponsored Locations in the game Image Source: Toru Hanai, Reuters
  27. 27. © 2016 eMarketer Inc. Location-based sponsorships of another kind are attracting marketers to Snapchat  Most brands are sponsoring geofilters to raise brand awareness  Sponsored Geofilters are also proving to be effective at increasing consumers’ purchase intent Pernod Ricard’s Sponsored Geofilter for Jameson whiskey  Raised purchase intent by 42%
  28. 28. © 2016 eMarketer Inc. Bloomingdale’s used Snapchat’s Sponsored Geofilters to increase foot traffic to its stores “Instead of looking for physical clues in each store, shoppers looked for the store’s Snapchat geofilter.” —Jonathan S. Paul, Operating Vice President, Social Media and Paid Media, Bloomingdale’s
  29. 29. © 2016 eMarketer Inc. Most common use case:  Location-based ad targeting (proximity targeting) Three other use cases are also proving powerful: 1. Geobehavioral ad targeting 2. Consumer insight and audience building 3. Online-to-offline measurement Marketers use location data in multiple ways with paid mobile media
  30. 30. © 2016 eMarketer Inc. Retailers have a history of targeting ads to mobile users within proximity of their stores Sale Image source: Nathan Yau Many target competitor stores, too (aka “conquesting”)
  31. 31. © 2016 eMarketer Inc. But interest in proximity targeting is not limited to retailers A majority of US marketers polled in January 2016 saw ad targeting and increasing in-store sales as key benefits of location-based marketing
  32. 32. © 2016 eMarketer Inc. Hilton Hotels used proximity-targeted search ads and flight cancellation data to increase revenue Image source: Siwat V Impact on local hotel revenues:  Philadelphia: +500%  Washington DC: +220%  Charlotte: +100%  New York City: +88% Source: iProspect, 2016
  33. 33. © 2016 eMarketer Inc. To influence real-time behavior, marketers need to satisfy consumers’ immediate needs “The Hilton campaign was about understanding consumers’ needs and convincing them to take an action in the moment.” —Jeremy Hull, Vice President, Products and Services Solutions, iProspect “To increase lunch sales at Rock & Brews, we targeted businesses within a 10- to 15-mile radius of the restaurant in the daypart around lunchtime.” —Jessie Thomas, Channel Supervisor, VML
  34. 34. © 2016 eMarketer Inc. Marketers also target ads based on the places their target audiences frequently visit Source: Placed, June 2016 This may prove powerful for “get out the vote” campaigns for the upcoming US presidential election
  35. 35. © 2016 eMarketer Inc. Marketers like those at Office Depot use location data to build audience segments for ad targeting  Analyzing device visitation rates to specific locations over time provides insight into the type of person using the device  Using such data in aggregate enables marketers to build unique, geoinformed audience profiles for ad targeting  Examples: Office workers, mothers with children, artists Office Depot results: 33% lift in purchase intent 29% lift in store visits vs. 0% lift for both metrics when using DMA targeting Source: IPG Media Lab, Thinknear, Office Depot Inc., September 2016
  36. 36. © 2016 eMarketer Inc. How are store visitation rates measured? There are two leading methods for using location data to measure store visitation rates: 1. Impression-based measurement. Comparing the location of a device when the ad is served to the location(s) where that device is detected after the ad is served 2. Panel-based measurement. Tracking the locations of a large panel of mobile users over time via apps
  37. 37. © 2016 eMarketer Inc. The need for accuracy and precision is critical when location data is used for measurement “Combining GPS, Wi-Fi, cell tower locations and sensor values like accelerometer, gyroscope and compass gives you a more accurate view of where somebody is.” —David Shim, Founder and CEO, Placed Using a cocktail of data signals is a best practice for attaining the highest level of precision, accuracy and confidence
  38. 38. © 2016 eMarketer Inc. Marketers need to ask three key questions when using location data for measurement 1. How was the location data derived? 2. Is it first- or third-party data? 3. Are the proper permissions in place to use the data for attribution purposes? Marketers that seek answers to these questions will be best equipped to use location data to measure increases in store visits
  39. 39. © 2016 eMarketer Inc. To sum up:  More US consumers are turning location-sharing services on—and keeping them on—thanks to a new wave of location-centric apps  Most of the location data in circulation in the ad ecosystem is not accurate enough for hyper-local targeting or offline measurement  Mobile advertising firms are weeding out the good data from the bad for advertisers  The Media Rating Council will issue location guidelines before the end of the year  Location data is being used in multiple ways—for proximity targeting, geobehavioral targeting, audience targeting and store visitation measurement
  40. 40. © 2016 xAd, Inc. MOBILE PATH TO PURCHASE
  41. 41. © 2016 xAd, Inc. LOCATION MATTERS 65% Complete a transaction related to their mobile research 78% Want to purchase within a day or sooner when using mobile 2 out of 3 consumers in the US are making trips into stores to complement their mobile research, a 20% increase from just one year ago.
  42. 42. © 2016 xAd, Inc. MATCHING THE ONLINE EXPERIENCE 64% 26% 18% 18% 16% Top Retailers Shopped on Mobile
  43. 43. © 2016 xAd, Inc. BRIDGING ONLINE AND OFFLINE WORLDS AT HOME 54% Location When Last Accessing Information on Smartphone +75% 32% 6% AT THE STORE LOCATION 24% +41% 2013 2016
  44. 44. Download the 2016 Global Retail Shopper Report xAd.com/mp2p 44
  45. 45. © 2016 eMarketer Inc. Learn more about digital marketing with an eMarketer corporate subscription Around 200 eMarketer reports are published each year. Here are some recent reports you may be interested in: Q&A Session Made possible by You will receive an email tomorrow with a link to view the deck and webinar recording. To learn more: www.emarketer.com/products 800-405-0844 or webinars@emarketer.com Cathy Boyle Location Matters: Using Mobile Location Data to Drive Actions and Sales  Snapchat Advertising: A Roadmap for US Brand Marketers and Digital Agency Executives  Location Intelligence, H1 2016: Guidance for US Marketers on Consumer Behavior, Data Quality and Mobile Marketing Tactics  The Mobile Attribution Gap: Five Missing Links in Mobile That Make Attribution Harder

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