Which Businesses Will be Pioneers in Location-Based Mobile Advertising?

By aiwpadminAugust 24, 2015

By John Egan

If a new forecast from market research company BIA/Kelsey is correct, national brands, franchises and multi-location businesses will be trailblazers in the emerging field of location-based mobile advertising. BIA/Kelsey predicts spending by national brands will make up 43 percent — or $68 billion — of location-based advertising by 2019. Those brands will include restaurant chains and retail stores.

“Nowhere do ‘national’ and ‘local’ come together more than with multi-location businesses,” said Michael Boland, Vice President of Content at BIA/Kelsey. “They are inherently national in their footprint and resources, but they are local in that they compete for customers in the local markets where they are present. This makes them a significant participant in the local advertising ecosystem.”

This year alone, location-based mobile advertising will reach $6.6 billion in the US, BIA/Kelsey predicts.Why is location-based mobile advertising on fire?

In a post on the BIA/Kelsey blog, Boland cites Google data showing 80 percent of smartphone owners search for local information, and 80 percent of those users want ads customized to their locale. On top of that, Boland wrote, mobile users are “high intent” customers who frequently are ready to buy.

Another factor in the growth of location-based mobile advertising is the advent of wearables like the Apple Watch, marketing professional Michael Georgiou wrote on Business2Community.com.

“Hype over location-based marketing continues to grow for good reason. Knowing one’s location significantly expands a brand’s ability to engage a consumer and increase conversions by closing the loop with information on nearby stores, offers and events,” according to AdExchanger.com.

Faisal Ghaus, vice president of market research company TechNavio, said examples of location-based mobile advertising include alerts about flash sales at retail shops, happy hours at nearby bars and special discounts for customers at restaurants.

US consumers are open to those types of promotions, according to a 2014 survey by software company Adobe. Fifty-five percent of consumers surveyed said they’d welcome location-based promotions on their smartphones while they’re in a store while 34 percent said they’d already received such messages.

“Location is the sweet spot of mobile advertising,” said Martin Kristiseter, vice president of mobile solutions at Marketron, a provider of advertising software and services.

But hitting that sweet spot means you can’t deliver just any type of ads on mobile devices. 

“Understanding the consumer and bringing them closer to the brand through a mobile experience is critical,” said Deborah Bothun, leader of the US entertainment, media and communications practice at professional services firm PwC. “It is not just repurposing existing advertising, but creating advertising that will appeal to consumers in the mobile space. Understanding the nuances of how consumers want to receive content and tailoring programs to address those preferences will advance the brands and the bottom lines of those who are doing it right.”

Location-based mobile marketing will be discussed in-depth at LeadsCon New York in a session called "Location-Based Mobile Marketing: Time to Get Real." 

Click here to register for LeadsCon New York 2015.

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