What Is Location-Based Advertising?
What it is, how it works, and why it matters for your business.
By Nick Say
Location-based advertising is the future of digital marketing; it’s personalized to your audience, precision-targeted to reduce wasted ad spend, and as trackable as any digital media.
Here’s the best part: Powerful as it may be, location-based advertising remains relatively untapped by small- to mid-size businesses.
This is the perfect opportunity for you, the reader of this article, to get a leg up on your competition.
Location-Based Advertising, Defined
Location-based advertising is, for the most part, serving tailored digital ads to consumers in specific, localized areas. It’s about ad campaigns that fit your target customers' daily routine.
As stated previously, the types of ads served in location-based advertising are entirely digital:
- Internet Display: Also called internet banners or banner ads, these are ads that appear on websites and mobile apps on desktop and mobile devices. They can be served as static JPGs or PNGs, or be animated with HTML5.
- Video Display: These are essentially video ad banners that take up the same ad space as standard Display ads.
- Connected TV: Streaming video services like Roku and Hulu accommodate location-based television campaigns. Advertisers can run 30- to 60-second TV spots on streaming networks, whether watched on mobile devices, desktops, or smart TVs.
An Incredible Opportunity
What makes this all so exciting for advertisers is its scalability; campaigns can be targeted as broadly or as narrowly as the advertiser chooses.
Let’s say a hailstorm hits a city, causing more damage in some areas than others. A local roofer can advertise its services online and confine its advertising to the hardest-hit neighborhoods. Again, precision targeting makes ad dollars go further.
As localized as it sounds, targeting a single neighborhood is still comparatively broad. Location-based campaigns can be drilled down even further.
Imagine a professional conference at the Bellagio. This year, one large advertiser can’t make the show, but still wants to engage attendees. The advertiser can geofence the Bellagio and serve its message within—and only within. The brand may not have a physical presence, but it can run an entire ad flight within the confines of the Bellagio, reaching mobile devices from the conference floor to the blackjack tables.
How Location-Based Campaigns Work, in 5 Steps
Precision digital campaigns are set up slightly differently than other forms of advertising, mostly in terms of strategy. Here, we’ll lay out the steps in order.
- Step 1: Audience Discovery
Location-based campaigns begin by defining exactly who to target. Sykes Marketing Group uses third-party data to group individuals into audience segments based on who they are, what they do, what they like, and more. - Step 2: Location Defining
This is where the “location” bit comes from. It’s all based on geofencing: creating a virtual “fence” around a location, within which ads will be served. Anything you see on a map can be geofenced—from houses and office buildings to cities and states. An extension of this is geoconquesting, which is geofencing your competitors’ physical locations. In other words, consumers in your audience will see your ad while strolling through your rival’s store. - Step 3: Creative Design
Precision-targeted campaigns work best with equally precise creative. Customers can be reached anywhere, from their homes to the places they frequent throughout the day. It's important to design messages that fit within that context. - Step 4: Ad Serving
Location-based ads can be served via four methods:
Contextually, on websites, webpages, and apps that contain information relevant to the content of your ad.
Demographically, on websites, webpages, and apps that match your customer’s personal (demographic) data.
Behaviorally, on digital media the customer is likely to visit based on their past browsing habits.
Retargeting, which is the process of continuously serving ads to customers who visited your website.
- Step 5: Attribution
As with all digital marketing, ROI tracking is explicit and occurs in real time. Since you know where the geofence is and who saw the ads, you can track viewers who saw your ads in the target zone and compare that with visits to your store or website.
Final Thoughts
To sum it all up, location-based advertising is personalized to your audience, precision-targeted, and trackable in real time. The truth is, there's not much else you could ask of an ad campaign.
If your marketing mix doesn't include location-based advertising, you’re in the majority—for now. Get started and see what laser-targeted advertising can do for your business.
