The sharp rise in the use of mobile devices not only has an impact on online retail but offers local retail new opportunities with location-based advertising. But in times of huge amount of data available, it is more important than ever to properly analyze information before using it for marketing activities to achieve the desired effect. Only when an advertisement is relevant - that means sent at the right time, with the right content to the right person - a positive impact can be achieved. If the relevance-oriented approach is not considered, there is a risk that users will ignore the advertising or even be negatively influenced by it.

For instance, a study by Appinio and Adzine shows that the target group of 16 to 24 year old is particularly difficult to reach with location-based marketing activities and that the willingness to visit a retail store due to the use of mobile advertisements increases with age. For the advertisements not to be ignored, an appealing advertising design using innovative formats is needed, and it is important to make sure that it is not perceived as intrusive.

Effective advertising formats in the mobile area are, for example, interstitial ads, which are interactive, full-screen ads that cover the interface of their host app or site. In addition, formats from the display area can be transferred to mobile, such as e.g., the so-called digital leaflet, which is based on a classic print brochure in terms of structure and can be visually prepared individually, depending on the industry. Due to increased transmission rates and in some cases unlimited data volumes, video formats are also ideal for location-based advertising.

The traditional analysis of click rates falls short in location-based and mobile advertising. Search rates, which show the extent to which the advertisement was viewed, and the visibility of the advertisement itself are helpful, but reflect only part of the advertising impact. A meaningful determination of the ROI is only possible in combination with media costs, target group attainment, and achieved contacts when evaluating the quality of the environment.

It should not be forgotten that location-based advertising is only one part of the trigger chain, tailored as precisely as possible to the user, and must be integrated into the broad marketing strategy to achieve the desired effect. A balanced marketing mix ensures that a high-reach advertising effect is attained in the target group - and that goes beyond the mobile device into the entire life and media world of consumers.

Local dealers, that use various marketing strategies and formats, have the best chances of reaching new and existing customers. Location-based advertising can be an important marketing channel for local retail, especially since it steadily gains momentum. However, to reach your own target group effectively, various factors must be considered that ensure that the advertising displayed is perceived as relevant.

Today, marketers target specifically on behavior and geographical location, since the key to any advertising campaign is to find the people who connect with the message. Using location-based advertising is making this possible for brands by capturing those they want to speak to, since smartphones are becoming the norm. Businesses can target users based on their GPS location with tailor ads and offers, providing a contextual ad experience that people, especially millennials, are becoming more and more accustomed to.

The key types of location-based advertising (LBA) are:

• Behavioral targeting is based on a user’s actions or geographical location that enable marketers to send specifically tailored messages. By using this technology, brands can work out the key characteristics of their audience such as whether they are into fitness (frequent gym goers) or if they are regular travelers and tailor their ads accordingly. This can be taken a step further if used to target competitors’ customers.
  
  
• Radius targeting allows you to display your ads to people in the direct vicinity of your store. Historically, businesses would advertise to a whole town in a directory or on a billboard but now, they have the power to target those walking past their store which is a powerful way of capturing your audience in real-time. This can have a significant impact on their decision to shop with you.
  
  
• Local search advertising is when you type into Google ‘restaurants nearby’ and you will be presented with a map featuring pinpoints which indicate where they are in your area. You may also have prices and reviews pop up which is all part of local search advertising. With almost a third of all mobile searches now related to location, brands are becoming increasingly aware of the importance of this channel and are investing budgets to ensure they appear clearly on the map. These local searches can also link to your business page, which in turn helps to drive more traffic to your site and generate enquiries.
  
  
• Geo targeting is helping businesses to be much more strategic and target people in the vicinity of their stores and, in turn, incentivize them to shop there.

The desired effects, such as visiting a store or purchasing a product, can only be achieved if the right combination of data and advertising formats is meaningfully integrated into the overall marketing strategy. Certainly, the definition of the appropriate KPIs and the continuous optimization form the basis for success and guarantee to stay ahead of the competition.

By Daniela La Marca