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

Editor's Notes

• #3: 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.
• #4: Read through the information on the slides…
• #6: 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.
• #7: 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.
• #8: 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.
• #10: 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.
• #11: 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.
• #12: 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.
• #14: 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.
• #16: 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.
• #18: 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.