As LBS continues to flourish, location-based advertising has picked up major steam as well. New data out from ABI Research suggests marketers will spend $1.8B on the medium in 2015, up substantially from the $42.8M expected for 2010.
While the concept has been around a while, marketers were unclear how to best leverage the technology. As LBS apps continue to define advertising models and rewards programs based on location, options for marketers are becoming better defined as well. “For a number of companies, especially ones with physical stores, the value in knowing a prospect’s location is the opportunity to drive that person to a store, and thus increase foot traffic,” said Neil Strother, research analyst at ABI Research, adding that the industry is now “seeing the first shoots” of location-based advertising being commercialized. “Once in store, the retailer has a high probability of converting that visit into a sale, which is the ultimate objective.”
The report noted that analyzing customers’ mobile and location habits is a good strategy for marketers to begin taking on location-based advertising, as well as determining which platforms are best for a particular brand. Location-based advertising (LBA) is unique compared to other methods in that each campaign is highly targeted and relevant to a particular audience, meaning marketers need to take the time to plan and optimize for the best results.
“There is a value exchange between marketers and consumers that goes along with location-based advertising,” said Strother. The consumer is asked to share his location via phone in exchange for something of value from the marketer, which could be information about a nearby store, a coupon or a special offer, he explained.
