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Location-Based Mobile Ad Spending Rose 90 Percent In Q4

Black Friday appears poised for similar gains in the role of geo-marketing, says Verve Mobile.

Verve Mobile's James Smith
Verve Mobile’s James Smith

It’s been a week since we first took a look at Verve Mobile’s expectations for the impact of location-based advertising on Black Friday. We decided to follow up with Verve CRO James Smith to see how the geo-marketing platform’s predictions were holding up — and what a difference mobile is making this year in terms directing consumers in their offline purchases.

The big takeaway from Verve’s research, which included analysis of over 200 campaigns from a broad variety of consumer packaged goods categories, including household products, food and beverages, personal grooming, and pet food, was that CPG is the fastest growing area of location-based advertising.

Still, Verve’s findings indicate that, with 14 percent of CPG ads using location on their mobile ads, the category still has some catching up to do when compared with retail (which makes up 28 percent of location-based ad activity) and automotive (15 percent).

GeoMarketing: In terms of verticals, are retail, auto, and CPG the main kinds of marketers using location-based advertising on Black Friday? Aside from the emergence of CPG, have there been any other shifts or changes in the percentages of how often (is that what the 14 percent for CPG represents?) these marketers and others have been using location-based advertising?

James Smith: Overall, we saw a 90 percent increase in current spending on location-based mobile advertising in Q4 2014 vs. Q3 2013, which translates to Black Friday as well as a large increase in the number of retail marketers joining the party.

The auto, retail, CPG and quick serve restaurant sectors continue as mainstays of location-based mobile advertising, because of the vital importance of driving foot traffic to purchase locations for these businesses. As such, location-based mobile tactics are proving extremely effective on this front. For example, retailers are achieving an average lift of 143 percent in foot traffic when exposed to location-based ads, compared to those who are not.

We know the CPG category utilizes location-powered advertising tactics to a greater degree than most other advertising categories. Retail, auto and CPG are the top verticals in leveraging location data for mobile advertising, with CPG being the fastest growing of the three.

How did this year’s Black Friday differ from previous years in terms of location-based advertising?

For the first time we have deep, historic data from Black Friday and the holiday shopping season in general, and we were able to leverage that for marketers this year. This includes targeting the very devices and consumers we knew were in big box retailers, shopping malls and toy stores on Black Friday 2013! We call this Real World Audiences.

In 2013, we saw retailers expand their use of audience targeting as their ownership of geo-fences peaked. We also saw a decline in DMA targeting (-50 percent) and an increase in audience targeting (+300 percent) and geo-fencing (+400 percent) among advertisers.

Additionally, many of our retail customers are asking us to re-target consumers we saw in stores on Black Friday 2013 and 2014 with Cyber Monday advertising, followed by holiday sales messaging through the end of the holiday shopping period at Christmas. We’re taking real-world consumer behaviors — not cookies or third-party data — to use precise location data that correctly targets audiences.

What accounts for CPG’s sudden rise to the number 3 slot in terms of the verticals that use location?

CPG marketers ultimately have two goals: to target the right consumer audience at the right time and to fuel increased foot traffic to the critical retailers that stock their products. Location-based mobile advertising has proven its ROI on both fronts. In terms of audience targeting, the combination of real-world location data and layers of product-purchase targeting from sources like Nielsen Catalina is very appealing to CPG marketers. In terms of driving foot traffic, the average lift in foot traffic of 143 percent is extremely attractive to CPG marketers, as far as demonstrating the inherent and verifiable value of their advertising investments in key retailers.

What lessons are you looking for from this Black Friday that might inform next year’s holiday season activity — and Verve’s approach to the marketplace in general?

Verve continues to delve deeper into understanding the consumer’s precise path-to-purchase. In addition to knowing their exact location — i.e. “they were in a mall” — we continue to seek deeper data and analytics, including testing the use of in-store consumer behavior technology like beacons, to better understand exactly what ad is most relevant and useful to what consumer in a particular physical environment. We consider this the place in the physical world where the ad is most engaging for the consumer.

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.