Location-Based Advertising: more customers through localized offers
The sharp rise in mobile device usage is not only impacting online retail but also creating new opportunities for local businesses. With location-based advertising, retailers and brands can deliver messages and offers tailored specifically to the user.Currently, eight out of ten Germans aged 14 and over use a smartphone and can therefore access information about products, services, offers, and locations anytime, anywhere. David Lange, co-founder and managing director of adlicious, explains the factors that lead to the success of a location-based campaign.
Great impact through relevance
In the age of big data, advertisers have more data at their disposal than ever before. However, this data must be analyzed correctly and applied to marketing activities to achieve the desired effect. A positive impact on the user can only be generated if an advertisement is relevant—meaning it is delivered to the right person, at the right time, with the right content. Moviegoers receiving discount coupons for sneakers from a sports store without any contextual relevance is an example of how location-based advertising should not be used. However, if potential customers are currently at a competitor's store, a targeted approach makes sense.
Using the right advertising formats
If a relevance-oriented approach is not taken into account, there is a risk that users will ignore the advertising or even be negatively influenced by it. A recent study by Appinio and Adzine shows that the 16 to 24-year-old target group, in particular, is difficult to reach with location-based marketing activities. The willingness to visit a retail store based on mobile ads increases with age. To ensure that ads are not ignored, the solution lies in appealing ad design using innovative formats.
Digital flyers
When creating ads, it is crucial that the advertising is not perceived as intrusive. Effective mobile advertising formats include interstitial ads, for example. Furthermore, display formats can be adapted for mobile. This includes, for instance, the so-called digital flyer, which is structured like a classic print brochure and can be visually customized according to the industry. Due to increased transmission speeds and, in some cases, unlimited data plans, video formats are also well-suited for location-based advertising. The classic evaluation of click-through rates falls short in location-based and mobile advertising. Completion rates, which indicate how much of the ad was viewed, and the visibility of the ad itself are helpful, but they only represent a portion of the advertising impact. A meaningful determination of ROI is only possible when combined with media costs, target group reach, and the actual contact frequency, while also assessing the quality of the environment.
High-reach advertising impact
It should not be forgotten that location-based advertising is only one part of the conversion chain—tailored as precisely as possible to the user—and must be integrated into a broad marketing strategy to achieve the desired effect. A balanced marketing mix ensures that a high-reach advertising impact is achieved within the target group. And this extends beyond the mobile device into the entire life and media world of the consumers. Local retailers who use and continuously optimize various marketing strategies and formats have the best chance of reaching both new and existing customers. This allows them to position themselves strongly in the face of the dominance of online retail.
An important marketing channel for local retail
Location-based advertising is an important marketing channel for local retail that is becoming increasingly significant. To effectively reach one's target group, however, various factors must be considered to ensure that the displayed advertising is perceived as relevant. Only when the right combination of data and advertising formats is sensibly integrated into the overall marketing strategy can the desired effects, such as a store visit or a product purchase, be achieved. Defining the appropriate KPIs and continuously optimizing based on them forms the basis for success.
This article first appeared onecommerce magazin.