What Counts as ‘Scale’ in Hyperlocal? Mobile Ad Players Weigh In

Is hyperlocal inventory getting easier to come by? The rate of smartphone ownership in the U.S. (106 million as of March, by comScore’s count) suggests yes, but many say it’s still tough to amass significant reach for highly geotargeted campaigns.

AdExchanger tapped several companies that are focused on this problem to answer the question, “What qualifies as ‘scale’ in hyperlocal mobile advertising?”

Click below or scroll to read their responses.

Alistair Goodman, CEO of Placecast:

“We see scaled media delivery in the mobile context as the ability to reach a high percentage of a target audience in a mindset to make a purchase, ideally when they are near a store. In mobile today, we’re beginning to see the emergence of many different ways of doing this but we’re still in the early days. Mobile search and display through Google, AdMob, Quattro and others are offering geotargeting, but it’s currently not granular enough to achieve real scale – most small businesses want local targeting that can be broken down by neighborhood, or a program that can place geofences around several blocks.

Additionally, only a small portion of display inventory available for purchases on exchanges today actually has usable, granular location – and most SMB’s wouldn’t even know where to start to buy this inventory. Social services like Foursquare are also worth a look, but outside of a few major markets, the scale just isn’t there. Placecast is seeing success through programs like ValuText, which is hosted by shopping-center operator DDR. In this case, DDR’s tenants are messaging mall customers when they are nearby. It’s a value-added service which has been translating to greater shopping frequency and basket size, particularly for smaller merchants.

The nexus of loyalty, payments and daily deal services actually has the best chance of succeeding in delivering integrated propositions that have both reach and measurable ROI. A small business wants to be able to reward loyal customers, and also attract new customers. These SMBs are often willing to pay for programs that aid in acquisition – but with small budgets, they need to be able to track what works. We’re seeing glimpses of the future in programs offered to small merchants by companies like Square and American Express, and the possibilities they hold are really exciting. We also see a big opportunity for companies like Living Social who already have these relationships with SMBs. I do not think the traditional ad players are going to win this. Hyperlocal is likely to be won by the folks that have the merchant relationships – that’s where the credit card companies and daily deal sites have an edge.”

Duncan McCall, CEO of Place IQ:

“For PlaceIQ, ‘scale’ in terms of hyperlocal means the ability to successfully enable the delivery for our customers of specific, highly targeted mobile campaigns – whereby 100 percent of the inventory has location attached to it. We’ve run and are currently running a significant number of these campaigns where the client wishes to reach a targeted audience.

While mobile campaigns relying on location-aware inventory can be run successfully today at scale, and the available inventory is likely in the billions of monthly impressions (if you include GeoIP zip based inventory, it’s very significant indeed) – it is still early in the evolution of a truly ‘location aware’ mobile advertising world.

Many of the publishers that can and should be location-enabled are not yet. (Yes, plenty still make you input your zip code manually!). And many of those that are, don’t yet pass that detail down stream – so it is unused. So while a huge pool of location ‘potential’ is now available in mobile, and early results are extremely encouraging – it is still a nascent period in terms of its mainstream adoption from an advertising standpoint.
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However as the value from location rapidly becomes better established to the publishers, networks, and ultimately the consumer – privacy sensitivity better understood – and it ultimately proves its worth as a powerful tool to help evolve the ecosystem and create a better experience for consumers, the tipping point to a mainstream ‘hyperlocal mobile world’ is not far away.”

Diana LaGattuta, Global Marketing Director, Location & Commerce, Nokia:

“Based on the way that digital media is bought and sold today, adequate “scale” for a hyperlocal campaign requires millions of impressions per day for a large city or combination of DMAs. As the expectation of geo fencing rises for hyper local targeting, the available audience will decrease. The more precisely we target based on location, while the reach decreases, the relevance of that reach skyrockets, particularly if the advertiser is a brick and mortar retailer trying to drive foot traffic. You can begin to imagine a funnel with mass audience reach at the top, narrowing as we eliminate people who are not nearby, narrowing even more so that we are left with just consumers who are nearby and needy. Campaign results are proving that location targeting is a more efficient and effective way to reach the right consumer. Speak to any merchant and they will tell you that they measure their advertising spend not on number of people they reach but on the number of people who walk in the door.”

David Staas, Interim CEO of JiWire:

“Scale is defined on mobile or hyperlocal the same way as it is digitally – by reach. And reach can be difficult to achieve on the hyperlocal level. You can get an extremely targeted audience in a given location, but it may only be 30 people. How do you speak to over a million at once? Successful brands blend channels, devices and media to engage consumers in the immediate vicinity of a location and drive them into the store – clicks to bricks, so to speak.”

By Zach Rodgers

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