UNDERSTANDING

LOCATION-BASED
ADVERTISING

HOW-TO GUIDE
 Understanding Location-Based Advertising
HOW-TO GUIDE

According to a recent Nielsen study of mobile phone users (June – August 2013), 64% of mobile
subscribers own a smartphone and 80% of the newest mobile users chose smartphones as their
mobile device. In comparison to just three months prior, smartphone ownership is up 3% (www.
nielsen.com).

With smartphone ownership growing steadily by the quarter, the need for companies to focus
more intently on mobile marketing strategies is now an imperative. As more marketers flood into
the mobile marketing sphere, it is important for them to ensure their company’s mobile presence
is competitive and relevant.

In the ongoing battle to stay competitive and relevant during 2014, one of the most crucial mobile
marketing concepts organizations should evaluate is location-based advertising. Utilizing loca-
tion-based data to illicit direct foot traffic to a brick-and-mortar location is as effective, if not more
so, than email marketing coupons or online store discounts.

This How-to Guide describes location-based advertising, how it can benefit your organization and
suggests a few common location-based advertising strategies.

What Is Location-Based Advertising (LBA)?

“Location-based advertising (LBA) is a new form of advertising that integrates

mobile advertising with location-based services.
The technology is used to pinpoint consumers’ location[s] and provide location-
specific advertisements on their mobile devices.”

www.wikipedia.com

“Location-based advertising [involves] advertisements that are matched to

your physical location. For instance, if you're a teenager and you're driving
by the local mall, your cell phone may suddenly ring to notify you that there
is markdown on sweaters, discounted just moments ago in a brand-name
department store. That's a location-based ad.”

www.netlingo.com

2 UNDERSTANDING LOCATION-BASED ADVERTISING

Benefits of Implementing LBA
Implementing LBA into a mobile marketing strategy can benefit many organizations. According to
a recent Verve Mobile study (State of the Market: Location Powered Mobile Advertising Report),
“advertisement campaigns that used location data performed twice as well as those that didn’t.

Some key benefits to implementing LBA into your mobile marketing strategy are
Targets Specific Audiences – By tracking the location and preferences of consumers, LBA
increases the likelihood of your mobile ads reaching interested parties in the general area of
your service/product.
Tracks Patterns for Future Campaigns – Known as the “cookie of mobile,” LBA has become the
easiest way to track click-throughs on mobile devices. Thus, LBA allows businesses to identify
consumer patterns for future, more-targeted campaigns.
Limited to No Cost for Implementation – Even the most advanced forms required to develop
location-based services are much less expensive than traditional marketing methods.
Enables Consumers to Choose Messaging – Intrinsically, LBA is designed to allow users to
choose what ads/messages they receive. This has become extremely attractive to consumers
since they feel empowered to pick the ads they want to see.

Common LBA Stratgies

A wide variety of LBA strategies exists, and each campaign requires a different network and/or
combination of strategic ad placement. A few of the most common LBA techniques include
Geo-Fencing – Geo-Fencing allows advertisements to reach LBA users in a defined area. This
method is designed to increase foot traffic to a specific location. The Verve Mobile study (State of
the Market: Location Powered Mobile Advertising Report) indicates that “The data demonstrates a
correlation between proximity and performance that suggests optimal distance [is] between 1 and
6 miles, [the] sweet spot [is] between 2 and 5 miles [and there is] a significant drop off after 6 miles.”
Geo-Aware Targeting – The foundation for location-based advertising, this strategy uses real-
time location data furnished by mobile providers to send mobile ads to potential customers in
the general location of the advertising vendor.
Place-Based Targeting – Utilize a certain location and timeframe to remit mobile advertise-
ments. An example of this may be a targeted campaign to the attendees of a sporting event
at a specific stadium.

Bottom Line
The influx of smartphone users and mobile marketing campaigns calls for more competitive posi-
tioning when it comes to mobile ad placement. Location-based advertising is a great option to stay
competitive. It is particularly cost-effective for companies with a mobile app already in place, easy
to implement for mobile app providers and highly appealing to consumers. As a proven method to
increase the success of mobile ad campaigns, adding location-based advertising to your mobile
marketing mix is an easy decision to make, and one which is also easily implemented.

3 UNDERSTANDING LOCATION-BASED ADVERTISING

 About ANA

The ANA (Association of National Advertisers) makes a difference for

individuals, brands, and the industry by driving growth, advancing the
interests of marketers and promoting and protecting the well-being of the
marketing community.

Founded in 1910, the ANA provides leadership that advances marketing

excellence and shapes the future of the industry. The ANA’s membership
includes more than 1,000 companies with 15,000 brands that collectively
spend or support more than $400 billion in marketing and advertising annu-
ally. The membership is comprised of more than 750 client-side marketers
and 300 associate members, which include leading agencies, law firms,
suppliers, consultants, and vendors.

Further enriching the ecosystem is the work of the nonprofit ANA

Educational Foundation (AEF), which has the mission of enhancing the
understanding of advertising and marketing within the academic and
marketing communities.
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5 UNDERSTANDING LOCATION-BASED ADVERTISING