If a customer signs up for Pandora or some other service in San Diego, then moves to Pittsburgh, he could continue to hear useless ads for California winery events for months or even years.
While mobile-users are the #1 growth audience for marketers today, there are big challenges ahead. Frankly, too many targeted ads miss their mark by the proverbial mile — if not many, many miles.
Ads targeted to prospective customers based on geography now represent as much as $2.4 billion in the marketplace. And experts say that as much as 65 percent of location-targeted mobile ads go substantially off-target from intended destinations, according to recent research by mobile-ad network Thinknear, a unit of Telenav Inc. (TNAV)
“Local mobile ad spending is on the rise,” says Catherine Boyle, an analyst at eMarketer Inc. “But the definition of local for one advertiser can be very different from another. It’s when you want to get into a one-to-three block radius around a specific location, that’s where the advertiser really needs to do a lot of research.”
SInce everyone is moving to mobile, the location issue is serious. How do locations get plotted? Pandora, for instance, lets advertisers target users by the zip code they used at sign-up. Tough luck when the customers move — which they do.
According to Thinknear, 34 percent of mobile ads using longitude and latitude to target users in a specific location are accurate within 100 meters (328 feet), according to a recent survey of 53 million ad impressions. Another 27 percent are off by more than 10,000 meters.
“It’s a buyer-beware sort of market,” Boyle says.
Blue Chip Marketing Worldwide, which helps manage advertising campaigns for big companies, including Procter & Gamble Co. and Ricola, does a lot of research. For Blue Chip, that involves locating an ad network (a business that matches marketers with the apps or websites they seek to reach) capable of placing localized ads.
“It’s definitely challenging,” offers Sarah VanHeirseele, vice president of digital at Blue Chip. “You have to know who you are working with, and really peel back the layers and understand how it works.”
“The industry is moving very, very quickly, and location is very hard,” Eli Portnoy, general manager at Thinknear said. “A lot of publishers are not location experts, and they are trying to get location, and they don’t understand how.”
Of course, not all publishers targeting by location are trying to hit the smallest dot on the biggest map. Again, Pandora, which uses the zip code, believes it’s a moot point to some degree because most of its advertisers place nationwide, large-scale campaigns that don’t need to reach a specific street corner to be effective.
Location-targeted campaigns are on the rise, and more than 67 percent of all mobile ads available now contain location data, up from 10 percent just two years ago, according to Thinknear. Publishers have an incentive to try to target their ads because location-specific ads can garner double the regular rates, according to research by Millennial Media.