Location-Based Advertising: When My Phone “Knows” More Than My Friends
So a while back something happened that was kind of creepy.
I had moved into a new apartment and had been living there for what was maybe a week, completing the various day-to-day tasks that one does (i.e. going to work, hitting the gym, going to the grocery store) when I noticed something odd.
My phone knew that I had moved.
Let me be clear, I didn’t tell my phone I had moved. It’s not a person. I don’t talk to it (yes, I know I talk into it but that’s totally different).
It just knew.
How did I know it knew?
Because it started telling me how many minutes it would take for me to get home. It judged the time of day, the degree of traffic on my likely route, the overall distance in miles, and any other possible variable it could think of. It then processed it through a sophisticated algorithm that I have absolutely no chance of ever understanding.
I didn’t program my phone to do this. It programmed itself to do it by simply being in my pocket as I went about my days.
Within a week, it had determined that the place I used to call my home I no longer frequented. Then, using location data from its GPS technology, it determined that there was this new place that I tended to stay at every day from around 6 PM at night to 8 AM the next day.
For my phone, that was enough to determine my new home. And it was right.
Again, within a week my phone knew more about me than most of my friends.
It Get’s Weirder…
A few weeks later something similar took place.
It was the weekend of Mother’s Day. I had organized with my older brother an evening trip to a wonderfully delightful restaurant here in Columbus with our parents. We had made reservations, to which my brother followed up with an email reminder that included the reservation time and location.
The night of the dinner arrived. I was in the process of getting ready when I received a notification from my phone I wasn’t expecting.
I’m paraphrasing due to lack of memory, but the contents of the notification were essentially this: “In order to make your reservation, you should leave by this time (and then it proceeded to tell me when to leave).”
Again, I didn’t tell my phone to do this (you’re beginning to see a trend here). It just knew to do it.
It had pulled the reservation details from my email (the time and location) and then determined my location in relation to the restaurant. It then calculated how long it would take me to get there based on overall distance and the degree of traffic at that time of day.
The Power of Location-Based Advertising
The point of all this is not to creep you out (and in all honesty, if you accept that we lost our privacy years ago, it’s actually pretty awesome). The point is to demonstrate just how much our phones know about us, and how much they’re capable of determining based on what they know.
The smartphone is without a doubt the best targeting tool in the world.
It has access to so much of our personal data it’s almost silly. It knows where we are, where we’ve been, what we’ve done, the sites we’ve visited and the apps we’ve used, and from all this it can then determine where we’re likely to go and what we’re likely to do next.
That’s the premise behind location-based mobile advertising – a tantalizing prospect for marketers and advertisers.
And for those ad tech solutions at the forefront of location-based mobile advertising, this is what they do and how they do it.
Data That Fuels
Location-based advertising starts with – you guessed it – location data.
As you’ve already seen, location data is a byproduct of the GPS technology in our phone. Anytime we enable the GPS functionality on our device, which as of 2012 72 percent of us do, data about where we are is transmitted across the Internet.
That location data can then be used to power incredibly relevant and timely advertising.
When consumers are found to be at a specific location, advertisers can use knowledge about that location to derive important details. These details go towards informing how likely that consumer will be interested in the message the advertiser sends. Because each mobile device is unique and personal to the one who carries it, location data can be used to effectively “weed out” those consumers who are least likely to take the action the advertiser wants.
In short, advertisers get the most impressions for their money because they’re targeting the consumers that matter the most.
“Fencing In” Your Audience
Now, there are a few ways that advertisers can use location data, but perhaps one of the most common is what we call “geofencing.” As most things in ad tech, it sounds way more complex than it is.
I promise it makes a lot of sense once it’s explained.
Geofencing is a location-based targeting method that uses the GPS coordinates procured to create a virtual “fence” around a selected location. The location is chosen strategically based upon its correlation to the desired audience.
For example, say as an advertiser you want to target basketball fans. You could geofence basketball stadiums all over the U.S. and instantly reach a massive audience who’s incredibly likely to be interested in basketball. Or you could geofence the souvenir shop of a specific basketball team in a local mall.
It can be as large-scale or as granular as you want.
Keep Them Close
Or perhaps you want to serve ads that drive in-store traffic.
Using location data to determine proximity, you could send promotional advertisements to those consumers nearest to your physical store. Research has shown that proximity plays a significant part in deciding whether or not a consumer will act on a promotional offer.
By sending an offer to those consumers nearest to your store, you greatly increase the chances that they make a visit.
The Ultimate Weapon
Location by itself is powerful. But when you factor in location history, a new realm of possibilities opens.
Historical re-targeting is the process by which advertisers create entire consumer profiles just by understanding where consumers have been in the past.
The locations a consumer visits paint a picture of her life. It can tell us what she likes, what she doesn’t like, and the kinds of activities that form the bulk of her existence.
Every time a consumer goes anywhere or does anything, a data point is created. It is then stored and analyzed in a data management platform.
Mobile ad platforms on behalf of the advertiser will aggregate these data points until an entire consumer profile has been built, paving the way for the implementation of highly optimized and intelligent mobile advertising campaigns.
Location-based targeting, specifically historical re-targeting, is the future of digital advertising.
Gone are the days where advertisers recklessly broadcast their message to as many people as possible, regardless of whether they’re interested in what’s being sold.
If your advertising campaigns aren’t intelligent, if they don’t make use of the billions of data points our data points our phones now generate, then they’re going to be ignored. Consumers won’t put up with irrelevant advertising any longer.
Our phones know more about us as consumers than we even realize. We might as well take advantage of it.
Location-based advertising is just one of the many technologies that are pushing mobile advertising to new heights.
If you want to run truly intelligent, effective advertising campaigns, you need to know them all. Our free guide can help with that: