GeoMinds: Get Ready For the ‘Big One’ in Mobile Marketing
Local ad analyst Gordon Borrell forecasts a “Perfect Storm” coming to internet advertising — with mobile marketing wiping away legacy formats and making a path for new ones.
I feel like the meteorologist in the Hurricane Center who goes on air and announces, “This is the Big One.”
By “Big One” I mean a major disruption in the advertising industry – the kind that has come along every few decades and wreaked havoc. The first recorded storm was in 1920, when radio swept the nation, changing media habits. The next came 30 years later, when the FCC started issuing broadcast licenses for local TV stations and people again radically changed media habits. Three decades later, cable programming started disrupting TV viewing habits. Then, 17 years later, the Internet burst onto the media landscape.
It’s been 20 years since the Internet was born as an ad medium, so we’re overdue for another storm. This next hurricane is coming, and it’s coming fast. It involves mobile media. Even though mobile devices have been around a long time, they’ve lacked practical advertising capabilities. Until now.
Why is this The Big One? Three reasons:
- Mobile isn’t “there” yet. Three-fourths of local businesses in our recent survey of 7,228 SMBs said they haven’t engaged in mobile marketing.
- Unlike other media revolutions, the growth of mobile media won’t be slowed by people needing to buy a radio or television set, wait for cable lines to pass by their house, or buy a PC and modem. Mobile has a pre-installed base (two-thirds of U.S. adults own a smartphone).
- These low-power Bluetooth devices (beacons) that are sweeping the country are the catalyst that turn smartphones into incredibly powerful geomarketing devices.
You can actually measure the intensity of the impending storm in any city with an app that detects these Bluetooth broadcast transmissions. The one I use is called Bluetooth LE Scanner, which checks for signals within range of my smartphone. Often there are none. Occasionally I get a half-dozen hits.
Barometric Pressure Builds From Beacons
A few weeks ago I visited what might be considered Ground Zero, a place honoring one of the greatest proponents of technological innovation of the 20th Century – Walt Disney. Standing in The Walt Disney Family Museum in San Francisco, my app registered a barometric pressure that was off the charts.
The museum has 150 beacons. The half-dollar-size disks are affixed to overhead air ducts. Only a handful of them push out messages to visitors’ smartphones as they navigate the museum. The rest collect data on their movements and time spent. In short, the museum has created its own broadcast medium, communicating with visitors and monitoring their activity.
A mile down the road, a Safeway store has installed these tiny transmitters to push marketing messages and monitor grocery shopper patterns. Dozens of other grocery stores, retailers and shopping malls throughout the city – and soon, through every city – are doing so as well.
The Geomarketing Disruption
This adds up to a wildly disruptive innovation in the business of geomarketing. Enabled by beacon messaging, mobile geomarketing will attack the $140 billion local advertising industry – principally print coupons currently distributed via direct mail and newspapers – but it will open up broad new opportunities as well.
Local marketers have begun to spend phenomenal amounts of money on marketing services. That’s because they now have a medium at their own disposal, the Internet. And as anyone who runs their own medium knows, costs can be high. It costs money to maintain the technology and to create designs and messages and push them out. In fact, local businesses tend to spend three to six times more on “marketing services” than they do on classic forms of advertising like banner ads, print ads, outdoor signs and broadcast commercials.
Beacons play right into those costs. Installing them and learning how they work is the least of the costs. Managing them effectively will be key. That’s where the opportunity rests for local ad agencies and media companies.
Note: These impending disruptions in geomarketing hold so much opportunity that an entire conference has been built around them. The Advantage:Geomarketing Conference keys off Borrell Associates’ hugely successful annual Local Online Advertising Conference in New York and drills down on things like beacons, locally targeted messaging on Facebook and YouTube, and neighborhood-based community sites like Nextdoor.
At stake is not only $50 billion in locally spent digital advertising, but 10 times that amount ($501 billion) spent on digital services. All of that money is in play as local merchants continue to adjust their marketing dials for the optimal mix that drives business.
I’m looking forward to the conference, and actually having a lot of fun talking to storm chasers as I program the agenda.
Hope to see you there.
*Gordon Borrell, the head of local advertising and media analysis firm Borrell Associates, is a sought-after speaker for conferences and company meetings and one of the media industry’s leading analysts. He is ranked in the top 2% among Gerson Lehrman Group’s 150,000 consultants worldwide and is quoted frequently in The Wall Street Journal, The New York Times, Ad Age, Forbes and other publications. He has appeared on CNN and other TV and radio programs discussing trends and forecasts for local media. Prior to starting Borrell Associates, Gordon was vice president for new media for Landmark Communications, where he worked for 22 years. He started his career as a reporter and editor for The Virginian-Pilot in Norfolk, Virginia. In 1989 he began pioneering interactive ventures and helped establish the first TV, newspaper, cable and network TV websites. Mr. Borrell conceptualized and helped create InfiNet, an Internet access and hosting company later split up and sold to Earthlink and to Gannett Co. He is a member of the executive board of the Local Media Association and is past president of the Newspaper Association of America’s New Media Federation.
**Editor’s Note: Our “GeoMinds” opinion series features posts written by outside contributors from all parts of the GeoMarketing community who want to share their views of the trends, issues, problems, and solutions changing the online-to-offline advertising and marketing landscape.
***Full Disclosure: The head of GeoMarketing’s parent company, Yext CEO Howard Lerman, is expected to participate in Borrell’s Geomarketing conference.