"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Jim Caruso, vice president of product strategy at Varick Media Management.
Advertisers are very excited about the rapid growth of mobile usage among consumers. By keeping Internet-connected devices close at hand at all times, consumers are essentially carrying an ad delivery mechanism with them day and night. Total monthly mobile app and web impressions available have more than tripled since August, according to AppNexus, one of the largest digital ad marketplaces.
Despite constant connectivity, reaching consumers on mobile devices is harder than it looks. Several mobile-specific targeting capabilities have been slower to scale than advertisers had hoped. Still, we’ve reached a point where advertisers have no choice but to adopt and integrate mobile into their media mix.
Yet there is no universal cookie targeting option for mobile advertising, so audiences built on top of the consumer behavior patterns that advertisers have come to rely on aren’t available. In order to get the most out of buying mobile in real time, three separate mobile ad targeting tactics need to come together.
The first of these capabilities is techno-graphic targeting, which uses different parameters associated with a device to infer behaviors or psychographic information about a target user.
For example, with every ad call advertisers can see the consumer’s device type and carrier. This allows a carrier, such as T-Mobile, to target a competitor’s subscribers, such as Verizon, with outdated phone models, enticing them to change plans and upgrade.
The Geo-Targeting Myth
Then there’s geo, or location-based, targeting, which has a wide variety of possible use cases for mobile that advertisers have just begun to leverage. Initially, there was an expectation that advertisers could reach consumers as they walked past their retail stores and draw them inside. While that is possible, the circumstances have to be so perfectly aligned that they almost never happen.
Not all time spent on devices, however, is addressable. Consumers may walk near a retail location, but if their phones are in use, they are likely in a map application, texting, calling or listening to music and are therefore not addressable.
Right now, it’s nearly impossible to push ads to consumers who aren’t in an app or on a mobile browser. So, it’s incredibly hard for a retailer to target consumers who are sitting in their cars in a competitor’s parking lot and persuade them to go to their own store down the street instead.
This audience targeting is so difficult that the advertiser would spend a lot of money trying to reach an audience with an anemic conversion rate. The reality of geo-targeting is stark compared to the myth.
The Behavioral Targeting Conundrum
The third and final part of the equation is behavioral targeting, which is trickier on mobile devices than it is on desktops. Leveraging behavioral data comes down to getting the highest possible match rate of desktop cookies to mobile devices, in a privacy-friendly manner.
Advertisers can cookie a user on a desktop, and then make an assumption that they are looking at the same user on a specific mobile device. As there are no cookies on mobile devices, this is usually done via IP address or latitude/longitude coordinates passed when an ad request comes from smartphone or tablet connected to WiFi.
While advertisers can currently leverage all three of these tactics, some use them quite well individually. Incorporating RTB gives us the necessary scale to allow for a blend of all three tactics simultaneously.
For instance, an advertiser may find that iPhone users in the Chrome browser during the day perform better than those using a Google Nexus tablet at night. By analyzing real-time bid data across marketplaces, they can direct their investment toward these high-performing audiences on the right device at the right time.
There are still issues of scale that need to be addressed. Right now programmatic media buying on mobile is dominated by applications. Recent reports still point to mobile inventory being around 80% in-app compared to 20% mobile web, which doesn’t match consumer usage patterns. This discrepancy will level off so that programmatic inventory availability will align much closer to consumer mobile habits and better web technology advances with HTML5 and responsively designed websites.
This growth will finally enable a combination of these three targeting options, which will help advertisers leverage much richer audience profiles in real-time. Mobile is and will continue to be a crucial media channel. Every day, marketers are being equipped with better real-time targeting tools to reach their mobile audiences.