Location-based Mobile and Digital Out-of-Home Advertising Share Unique Synergies for Reaching On-the-Go Consumers
NEW YORK, NY — Digital out-of-home advertising is a location-based business. Every digital display, public or private, is tied to a physical location, and that location is more than likely attached to a specific IP address. Location-based mobile service providers also have the ability to triangulate a smartphone user’s location to offer specific promotions and content tied to a user’s interests and specific location. These synergies of location between mobile and digital out-of-home advertising create unique opportunities for brand marketers.
Consumer receptivity to opt-in location-based mobile offers is growing. According to a recent online survey conducted by Harris Interactive and commissioned by PlaceCast, a location-based mobile marketing provider, one third of Americans who have opted-in to mobile marketing alerts indicated that such services impact their decision to go into stores—and 27% report that these programs impact their decision to buy products in physical retail locations.
According to Google, about one third of all mobile search have local intent. In fact, a recent study by Pew Research revealed that approximately 7% of adults who go online with their mobile phone also use location-based services. While 7% might not seem like very much, it’s important to recognize that location-based mobile users represent a high-value target for marketers, and their numbers are growing. Research from the National Retail Federation’s (NRF) Mobile Retail Initiative has projected that by 2015, consumers will use mobile phones to purchase goods and service worth almost $120 billion, representing about 8% of the total e-commerce market.
“When we think about digital out-of-home and mobile together, we think about it as being an amazing activation vehicle,” said Adam Towvim, Senior Director of Business Development at Jumptap, a provider of mobile advertising solutions. “It’s one of the most targeted and personal mediums around.”
Collaboration Creates Deeper Engagement
“Location-based marketing is about extending an experience for consumers in a particular place and tying people together through a shared media experience,” said Matt Welton, Vice President, USA, never.no.
Advertising agencies are looking to expand on their relationships with consumers and see location-based mobile marketing as a channel that can create deeper engagement for brands. They’re looking for customized solutions, not commodity-level ideas. Mobile marketing is currently being executed on a case-by-case basis, so it’s more of an experiential execution rather than one that’s driven by core business strategy. It requires a lot of thinking and strategic partnerships to develop strong creative solutions.
“Jumptap views location as a critical part of what a brand needs to do to engage with an audience,” said Mr. Towvim. There are many examples of advertisers who have run nationwide, geo-targeted campaigns with us. The media buy itself is large, most people still think of the mobile buy as relatively small compared to digital, but in 2009-2010 we have begun to see much larger number of buys into mobile. Mobile allows brands to reach a much larger scale than they had before with greater personalization.”
“Our screens are in locations and we know the IP address of every screen. When someone engages with our screens we know exactly where they are,” said Stephen Randall, CEO of LocaModa. “We know where they are because the screen is physically attached to a location. The digital signage industry could be turbo-charged by appreciating that we are in a location-based business.”
According to Mr. Randall, location-based technologies are often misunderstood. “People often think of the Minority Report example, but the reality is that you can’t push [information] to a mobile phone,” said Mr. Randall. “The beauty of using mobile activation with digital signage is that it creates the pull for information, rather than the push.”
This is one of the reasons why consumers who have opted-in to location-based services have become so valuable to advertisers. Location-based mobile services such as Foursquare, Booyah, PlaceCast, and Shopkick have the ability to engage with consumers, providing a deeper brand connection at the point-of-sale with special offers, coupons, and loyalty-based programs. Users engage with the medium at their own discretion and are more open to receiving offers for products and services. Most location-based providers such as are built around an opt-in model.
“I’m a great believer in competition, but there’s too much business that has to go across multiple networks for a brand to be interested in advertising with enough scale. This means that networks really should not be competing with each other, they actually need to work with each other in order to win business. Often the competition isn’t another network—it’s actually the Web,” said Mr. Randall. “There is a lot of digital media revenue that could be attracted to digital out-of-home. We are digital, and it seems strange that we are often competing for traditional budgets rather than digital budgets. I think that’s starting to change now.”
Bridging Content Across Multiple Platforms
Pulling all the content pieces together across mobile platforms and large-format digital signage screens is becoming easier. The Mobile Marketing Association (MMA) and the Interactive Advertising Bureau (IAB) have developed standards for mobile advertising; however, translating the mobile experience to a digital place-based platforms can be an issue because each experience is very different.
The emerging HTML 5 standard is providing more creative opportunities for consistent execution across multiple platforms, so rich media such as video and interactive games can be used on mobile devices that closely aligns with television, Internet, and digital out-of-home mediums. The h.264/MPEG-4 format is also part of the new HTML 5 specification. This should create a more efficient production model for content developers looking to develop media for mobile, on-demand streaming television, and digital out-of-home applications.
It’s a Digital Conversation
One of the key differences with location-based engagement is that it has less to do with the actual location and more to do with social networking. For example, Mocospace has built one of the largest mobile social communities that lets users connect and share videos, pictures, send instant messages, and play games on their cellphones. “When you bring location into the equation you are actually binding together interconnected communities,” said Mr. Towvim. “This is valuable to the advertising experience for both brands and media buyers to build relationships with an audience.”
According to Mr. Randall, we need to think about mobile as a behavior and not just as a device. “Everyone standing in front of a screens is mobile, the opportunity for us is understanding how to connect to that user,” said Mr. Randall. Location-based mobile services also need to benefit both the location and the consumer. “Location-based mobile services are providing brands with lead-generation and loyalty applications that are perfect applications for digital out-of-home media, but there’s no reason why the screen can’t also promote the fact that when a consumer checks-in that they are then entered into a store’s promotion and receive a benefit that then ties back into a loyalty program,” said Mr. Randall.
Targeting, Demographics, and Response Rates
When you measure mobile engagement it all depends on how well you target the media buy. A mobile marketing campaign can target a wide range of demographics that include age, ethnicity, gender, presence of children in a household, credit score, and how long someone has owned their handset. New mobile phone users tend to have a higher click-through rate in the first 30 days of ownership. “If someone has owned their phone for less than 30 days, the click-through rates are significantly higher because people are naturally interacting with their phones because of natural curiosity, but also because people are in an experimental phase. There’s the general newness factor of it,” said Mr. Towvim. “It’s also important for marketers to consider that with mobile there is only one advertisement on a screen, so the click-through rates tend to be a lot higher than with the Web.”
“Mobile marketing has a lot to do with how well you are targeting your audience,” added Mr. Towvim. “When you look at Apple iPod users and they tend to skew about 5 to 10 years younger than iPhone users because of calling plans, and iPad users also tend to be a little older than iPhone users.
One point that needs to be clarified for advertisers is that there’s an unrealistic expectation level for mobile marketing response rates that seems to have developed. “If we were running a traditional direct mail campaign and we had a response rate of 2% we would be delighted by it,” said Mr. Randall. “We know from data that 2% is good, and if we got 4% we would be celebrating; however, there’s an expectation level with mobile phones, because they are so ubiquitous, that we should be getting 90% response rate, and that’s not realistic.
“If you do a nationwide mobile media buy, a 1% response rate is considered to be very strong,” said Mr. Towvim. “The minute you bring location-based marketing into the mix and you layer across the same demographic you can easily begin to see 3% to 4% and higher click-through rates. There are ways to overlay the mobile and digital out-of-home experiences that do not have to be directly driven by the sign itself. A mobile media buy can be a very intelligent, highly targeted, and coordinated with digital out-of-home advertising.”
Free Trend Report: Why Location Is the New Currency of Marketing
Finding effective ways to deliver branded messages in today’s complex media environment is one of the biggest challenges facing advertisers. Traditional methods of advertising have become less effective as consumers spend less time in places where marketers have traditionally had an advantage in reaching them. In addition, consumer attention has fragmented across multiple channels as media options and device platforms increasingly diversify.
Active consumers spend money, and while they are going about their daily routine, they are also actively looking for information. According to Google, more than 50% of all mobile searches have local intent, and 17% of search happens while consumers are on the go.
Digital Out-of-Home (DOOH) advertising, also known as Digital Place-based (DPb) media, utilizes strategically placed, networked digital signage displays to reach on-the-go consumers while they are outside of their home with highly targeted messages. Location-based mobile and digital out-of-home media are part of a larger multiscreen ecosystem that effectively amplifies brand messages to create a deeper level of engagement with active consumers.
Why Location Is the New Currency of Marketing is aimed at CMOs, media buyers and strategists and provides insight into why marketers are increasingly shifting their advertising dollars to these rapidly emerging media platforms.
Highlights from Why Location Is the New Currency of Marketing include:
- The Connected Consumer
- Leveraging the Moment
- Multiscreen Campaign Planning
- Amplifying Reach With DOOH Media