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Mobile: The Future of Location-Sensitive Advertising

  |  February 11, 2010   |  Comments

Recent product releases from Yelp, Google, and Facebook provide clues on where location-sensitive mobile advertising is headed.

Location, location, location. This longtime real estate adage rings truer today more than ever as a local business success criteria. Location-sensitive mobile advertising, however, has provided a few new wrinkles. As the movie Minority Report helped depict over seven years ago, media now targets your every move and is ready to serve you a promotion or advertisement at every corner.

Recent product releases from the likes of Yelp, Google, and Facebook have given us clues as to how our mobile-enabled lives will take shape.

Yelp

Yelp has offered the "Nearby" function in its smartphone apps for some time now and actually beat Google to market. This function provides consumers immediate visibility into the nearest restaurants, bars, coffee shops, banks, gas stations, drugstores, and other local amenities.

"Nearby" even offers a consumer insight into nearby sales and special offers. It works by allowing consumers to access coupons and offers that local merchants have posted on their Yelp profile pages. As of this writing, there were few offers available in suburban Connecticut. But when I accessed the same app in New York City, I was pleasantly surprised with the depth of offers available.

Google - Near Me Now

The great thing about Google's "Near Me Now" function is that it's built right in. There's nothing to install - consumers just need to access Google in the U.S. through a browser on an iPhone (OS 3.x) or Android-powered devices with version 2.0.1 or later. Finally, they just need to allow Google to access their location via GPS for the "Near Me Now" link to appear. This link provides a simple navigation to local merchants within the area. Similar to Yelp's "Nearby" function, consumers can find restaurants, coffee shops, bars, ATMs, and banks, as well as a link to additional categories. The mobile SERP (define) provides 10 local merchants ordered by a combination of proximity and relevancy based on Web citations (define) to the particular business. In addition to the 10 business listings, three Google AdWords paid positions are featured.

Also, just like Yelp, the "Near Me Now" function really pays off in the big cities. While in New York City on Monday, I tested this function and its accuracy and availability of content was impressive.

Interestingly, the emergence of many of these location-sensitive platforms is signaling an intersection of mobile and social. It makes sense if you look at the numbers. According to eMarketer, there are over 21.9 million U.S. mobile social network users (which constitutes 9 percent of all U.S. mobile users and 32 percent of all U.S. mobile Internet users). Due to this growing trend, a large number of Facebook application developers have been busy creating tools that enable consumers to leverage their proximity to one another and add location-aware offers. One specific example of this is YellowPin.

YellowPin

YellowPin allows consumers and their Facebook friends to share their activities and whereabouts through a series of text messages (or clicks if accessed through a PC). Because it works via text message, YellowPin does not require the consumer to have a smartphone. YellowPin provides the social aspect by allowing you to find friends close by and popular places for you to meet.

Advice for Advertisers

How should advertisers get started in this location-based mobile-enabled world? Start with the basics. These applications deliver back structured data results - meaning your local business listing information is the most important building block. Check out one of my previous columns for details on the importance of local business listings and how to establish, update, and enhance them.

Next, look at performance-based advertising opportunities that fit your vertical and ROI (define) goals. Because we are very early on in the mobile game, volumes are smaller. In most cases, the media rates are highly negotiable. Now is a good time to test location-aware media prior to an increase in popularity or the inflation of associated costs.

As more local/mobile tools emerge, publishers will continue to monetize the space by charging advertisers for sales leads via clicks. But as consumers seek more direct connection in the form of telephone conversations, many are adapting a "click-to-call" functionality.

Advertisers who participated in a beta trial of "click-to-call" saw results ranging from 5 percent to 30 percent increases in their click-through rates, according to Meredith Papp of the Google Mobile Ads team. This comes as no surprise considering that the latest comScore/TMPDM Local Search Usage Study shows that consumers prefer to use telephone as their primary method of contact over clicks (additional data on preferred response channels for local search can be found here).

Many advertisers question whether any special handling is required for mobile/local leads versus leads they receive from any other channel. In terms of style of handling? Probably not. However, with mobile leads (and given the location-based apps like the ones listed above), consumers are more likely to close on a sale within hours and minutes, not days and weeks. Because of this immediacy, it's important for local merchants to handle these leads with a sense of urgency.

The takeaway is that location-sensitive mobile advertising has upped the ante for local merchants and advertisers by allowing consumers to find products and services when they are ready to make a purchase. Advertisers that address the information needs of these consumers and provide quick sales answers will stand the best chance of profiting from this fast-emerging group.

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ABOUT THE AUTHOR

Gregg Stewart

Gregg Stewart is founder and president of 3rd Act Marketing, a full-service marketing agency and consultancy, specializing in digital solutions, headquartered in Connecticut. 3rd Act supports businesses and agencies of all sizes, including Fortune 500 companies. With more than 20 years experience, Stewart applies his successful tenured career in interactive advertising and local search to the ongoing development of digital and mobile solutions for his clients' online-marketing campaigns. Through his strategic counsel, national and local brands become better equipped to target and reach niche consumers for increased leads and sales. In addition to his ClickZ columns, additional columns can be found in the Search Engine Watch archive. In 2013, Stewart was recognized with the ClickZ Hall of Fame award.

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