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Location targeting more than doubles performance of mobile ads: report

Mobile campaigns leveraging location targeting outperformed non-location targeted campaigns by a factor of two times, according to a new report from Verve Mobile.

The Location Powered Mobile Advertising Report found that all location-based strategies exceeded the industry average click-through rate of 0.4 percent, with geo-aware campaigns leading with a one percent click-through average. For the report, Verve reviewed over 2,500 mobile campaigns run across its location-based ad platform in 2012, with the findings reflecting the state of premium location-based mobile ads.

?The big news is that location powered mobile advertising outperforms other mobile targeting strategies by 2X,? said Tom MacIsaac, CEO of Verve Mobile, New York.

?Not only is location a must-have but it is really the key value mobile brings to the table for marketers ? location targeting is the ability to reach consumers on their uniquely personal devices while they are out and about, on the go, and closer to the buying decision than ever before,? he said.

More marketers embrace location
Other location-based strategies also proved effective, with geo-fencing averaging an above 0.90 percent click-through rate followed by city, ZIP code, DMA, audience and third-party place-based audience targeting.

The report also reveals that marketers are increasingly embracing location-based targeting, with the number of location-based campaigns across the Verve network jumping from 17 percent in 2011 up to 36 percent in 2012.

Also highlighted in the report are several successful case studies.

For example, H&M saw a click-through rate of 2.3 percent when it geo-fenced stores locations in San Francisco, Los Angeles and New York to generate excitement around the David Beckham Bodywear line via mobile ads that were dynamic, expandable, included tap-to-map and social media integration. The goal was to drive traffic to store locations and participation in a mobile sweepstakes program.

Audience and location-based audience targeting were also used.

In another example, Central Market saw a 4.1 percent click-through rate with a geo-aware effort that put "user distance to store from location x" into the creative. The campaign, which continued into 2013, was used to raise awareness of special products being promoted through in-store events.

Driving foot traffic
The addition of location information in mobile advertising brings real value to users by helping them find products and services where and when they want them.

Location data is used by brands nearby real-world locations to drive foot traffic or to reach people who are not currently nearby and to retarget users who have recently been at a store or location.

Location data can also be coupled with audience segmentation data, enabling marketers to reach only the users they want to reach. And, by incorporating third-party data, location-based campaigns can reach users based on demographic or transactional histories.

In 2012, 30 percent of location-based campaigns were targeted based on a designated market area, 24 percent used third party data and place-based targeting; 22 percent were geo-fenced; 14 percent were geo-aware, 6 percent were targeted based on ZIP code and 4 percent based on city.

By vertical, the biggest users of location-based targeting were grocery, political, healthcare, lottery, real estate and education marketers. Automotive, restaurant, telecom, retail and travel were also heavy users.

?The most surprising finding was how poorly exchange-based inventory performed ? we knew much of the location data in exchanges was specious but didn?t realize that the majority of it was inaccurate,? Mr. MacIsaac said.