With location-targeted ad spending expected to more than double from $11.3 billion in 2016 to $26.7 billion in 2020, marketers need to diversify the way they use location data. It is time to expand beyond just driving in-the-moment store traffic to recognizing location as an invaluable step in creating a total picture of the consumer’s mindset and purpose.
Imagine that you’re a block away from the grocery store. In the early days of location-based advertising, proximity was enough to trigger an ad on your phone for a product on the grocery store’s shelves. That was “Location 1.0,” and while it was an improvement on analog out-of-home ads like billboards and posters, it wasn’t much of one.
In the world of Location 2.0, your proximity to the grocery store still matters, but it’s merely one data point (arguably the key data point) in a much more complete picture of you that is about to make the ads we all see on our phones less intrusive and far more meaningful.
Location isn’t simply about real-time proximity; it’s also about consumer mindset. Your phone might sense that you are a block away from the grocery store, but for ads based on that data point to be uniquely relevant, they have to take into account a whole series of questions: What time of day is it? Are you leaving to go somewhere or are you coming home? What’s the weather like? Is it the weekend or a work day? Is your adjacency to the grocery store an irregular event or a repeated behavior?
All of these factors affect our needs and our moods, and for the first time in history we can design ad experiences that take those inputs fully into account. Trying to assemble a complete picture of consumers from aggregated data is nothing new, but precise location and location context has been the missing piece of the puzzle–until now.
Let’s go back to the grocery store example. Location 2.0 tells us that for some consumers, the best time to serve an ad for an item on the grocery store shelves isn’t when they are near the store or in the parking lot. The right time is when they are taking a moment to plan out their grocery list. Depending on someone’s personalized data profile, that might be while they are sitting on the bleachers watching their kids play soccer, or it might be when they are riding the bus to work. Location 2.0 does take into account your habitual proximity and visit patterns to your local grocery store, but it also finds the right time and place to serve you an ad based on that data and other individual data points that build a more complete picture of the consumer’s needs and wants.
The kind of deep context associated with Location 2.0 is also about to change the experience we have with mobile ads by allowing mobile marketers to tailor creative to the moment. Serving up a beautiful, full-screen, expanding movie preview doesn’t make much sense when all you’re trying to do is check the weather on your way out the door. Yet it makes a lot of sense when you’re sitting on your couch in the evening, looking for something good to watch.
Location 2.0 capabilities are arriving at just the right moment in the evolution of the Internet. The distinction between “mobile” and “the Internet” is rapidly becoming less meaningful. The vast majority of time that people spend online, especially in the developing world, is now spent on mobile devices, and 81% of that time is spent in apps rather than on browsers, enabling powerful data capture from native-on-the-device capabilities that further illuminates consumer understanding. Even more than PCs, smartphones are an ecosystem-changing technology, on the order of clocks, trains, cars, radios, and televisions. Contextual location data will soon be built into every Web-based experience we have, not only advertising.
Whatever your industry and whatever your product, if you’re not location context-aware, you’re about to be obsolete.
A version of this article originally appeared on CMO.com.
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