Guest Post: What location data really tells marketers

by David Petersen, CEO, Sense Networks

When it comes to driving ROI through mobile advertising, location doesn’t matter – at least not in the way you think it does. It’s true that mobile advertising campaigns that are location-aware, such as geo-fencing, can drive ROI. However, the more effective use of mobile location technology considers historical location data, and the consumer behaviour it reveals. Smart marketers are implementing ‘location for lifestyle’ targeting strategies as opposed to zeroing in on ‘location right now tactics’.

Sending an ad to a consumer based on their current location often isn’t as powerful as sending mobile ads based on the user’s lifestyle and behaviour that historical location data can reveal.

In fact, our research has shown that there is no correlation between distance-to-store and mobile ad clicks for retailer brands.

Also, consider that most consumers have their day planned out.

“The lack of a relationship between a mobile user’s real-time distance to a store and CTRs cannot be explained by bad location data”

They may be walking past a retail location and receive an ad, but they are unlikely to stop what they are doing and immediately head into the retailer to make a purchase – especially if the deal isn’t relevant to them.

Studies show that 80 per cent of purchases are planned. Therefore, marketers should deliver ads to consumers about relevant topics beforehand to influence purchasing decisions.

By analysing historical location data, marketers can tell more about a consumer’s lifestyle choices and preferences – fast food junkies, shoe-shopping addict, loyal WalMart customer, etc – and send them ads based on those preferences.

This reinforces the notion that simple geo-fencing is not an optimal targeting practice on its own.

Instead, it is critical to target users based on what location tells us about their behaviour.

Especially for national brands that have many well-known locations in a metro area – consumers’ historical shopping patterns, demographics and lifestyle will have a greater impact on driving store visit rates (SVRs) and ultimately purchases, than the fact that they are one mile from a retail outlet.

Critics of location-based technology are quick to blame the data, claiming it to be unreliable or inaccurate.

While the industry still largely struggles with the quality of location data, the lack of a relationship between a mobile user’s real-time distance to a store and CTRs cannot be explained by ‘bad location data’.

Location data is of varying quality, but even the best location data doesn’t prove valuable in this situation.

Retailers should keep in mind that targeting power comes from understanding what location reveals about the user, not just the location point itself.

It is who, not where, that more strongly impacts CTRs and SVRs.

The power of mobile location data lies in extracting context and meaning from historical location patterns to glean meaningful insights about users – not the fleeting, real-time moment that a consumer enters a geo-fence.

Author biog

As CEO of Sense Networks, David Petersen is responsible for setting the vision and execution path of Sense Networks. Petersen joined Sense following his tenure as senior vp at The Nielsen Company where he established himself as a leader in the mobile, analytics, and media industries.

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2 Responses to Guest Post: What location data really tells marketers

  1. Agreed that location should be used as an additional data point by marketers. As with all marketing campaigns, location-based mobile marketing is strongest when integrated with other data points including demographics, shopping behavior etc.

    We just proved this in a pilot program we ran with Alliance Data to consumers who had a store-branded credit card with one of six retailers in a Columbus, OH shopping mall, asking them to join in a text message pilot campaign. The shoppers who joined the pilot were sent texts when they were close to the mall encouraging them to use their store-branded credit cards for purchases to be entered in a drawing to win a $5,000 shopping spree at one of the stores participating in the pilot, including Express, The Limited and Pier One. And results showed that the SMS-triggered sales were 24% more than average. The full set of results from the pilot can be found here – http://bit.ly/10uBKCx.

  2. admin says:

    Tell us more!

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