How “Location” Evolved Into “Audiences” For Mobile Ad Targeting

An early paradox of location-targeted mobile display advertising is that it typically generated better results but presented smaller audiences. Brands and agencies often shunned geo-targeting (and geofencing) for this reason.

They wanted “scale” above all other considerations.

When brands used geo-targeting, it was often limited to the city or DMA level. It rarely got more precise than that. Targeting using lat-long coordinates was held out as an example of what differentiated mobile from PC adverting. However, lat-longs were rarely actually available (less than 5% of the time) and marketers had no idea what to do with them anyway.

Over the course of the last year and a half, however, something very interesting and even surprising has happened. Seeking to jump-start mobile display adoption, a range of (especially local) mobile ad networks shifted their tactics to focus on audience targeting.

Cleverly, companies and networks such as Skyhook Wireless, PlaceIQ, JiWire, Verve, Placed, xAd, Jumptap and Factual began to translate location into audience profiles and segments. Based on where the phone “lives” (zip or neighborhood) and other observed movements (e.g., to and from airports, store visits) these networks were able to draw inferences about locations and the types of people who frequent them, and bucket them into recognizable demographic, psychographic and other audience segments.

On a simple level, this is a cousin of traditional direct mail marketing, based on zip codes and related demographic/census data.

As a creative response to limited market demand, location-based ad targeting in mobile devices has evolved into a way to reach specific audience segments, both for branding and direct response. Location as location is, of course, still utilized in the form of geo-fencing (e.g., within one mile of McDonald’s locations) or selective location targeting (e.g., Chicago and Houston but not Los Angeles). However audience targeting has come to the fore as a primary selling point for these local-mobile ad networks.

The targeting data have become richer, more layered and nuanced over time. However the “paradox of location” has essentially been resolved through a focus on audiences. Agencies, enterprises and brands can now reach prospects at scale, using location as a background “methodology,” without thinking at all about geo-targeting or lat-longs.

The brand specifies the audience it seeks (e.g., “auto intenders,” tech-savvy moms, Wal-Mart shoppers), and the network identifies those segments through its location-based audience profiling. When someone visits a designated audience-location an appropriate ad is served. It’s more complex than that, but that’s the basic idea.

Agencies and advertisers have started to listen and to move budget.

Geo-fencing, conquesting and proximity-based ad targeting are all being used in tandem or in parallel with audience targeting. However, the translation of geo-targeting into audience targeting creatively helped make mobile location more comprehensible to brands and their agencies – by turning location into a language that they already understood.

If you’re interested in more discussion of these issues, I’ve written about them extensively on my personal Screenwerk blog.