Shopping on High Street? Expect an ad deluge

Imagine you're out for a high-street shopping and suddenly an advertisement pops up on your smartphone about the massive discounts and cashbacks at an apparel brand. Chances are you might head straight to this particular store to check out the collection and buy. This strategy of location-based advertising has been known for its multiple benefits for brands right from enhanced consumer eyeballs and footfalls to better sales and is valued for being personalised, real-time and hyper-targeted. From Samsung to Starbucks and Shopper's Stop to Sony, brands across categories have leveraged it to their advantage. In fact, brands in the US alone are slated to spend $26.5 billion in 2019 on mobile location-targeted ads. "Location-based advertising works well for any business that is tied to a specific location like a restaurant, training institution or a retail outlet. It allows anyone walking in the vicinity and operating a smartphone to immediately get an offer from the business that entices them to walk into the shop. Smart businesses can also analyse the demographics of the person walking by to determine if they are the right profile to push an ad to,'' says Akhil Shahani, managing director, The Shahani Group.

According to Shashwat Das, founder, Almond Branding, location-based marketing has better returns when compared to content marketing or social media marketing, providing targeted messaging based on where people live, shop, work or are at the moment.

However, a new research states that location-based advertising is today not moving in the right direction. A research by Location Sciences, which is a global location intelligence company, states that nearly 65% of the spends on location-based advertising gets wasted due to poor targeting and bad quality of data.

Experts say it's time for brands to strategise and chalk out measures that can ensure their spends on location-based advertising get utilised effectively, delivering best returns on their investments.

Harsh Shah, senior vice president, client services, Dentsu Webchutney, says location accuracy and data speeds currently is a challenge. Furthermore, advertisers and platforms will need proof of footfalls and revenue against every penny spent, adds Shah.

Hitesh Rajwani, CEO, Social Samosa, says Indian brands struggle with location-based ads due to too broad or too specific targeting sets and engagement from irrelevant profiles. "Brands can use location-based ads effectively by testing multiple ad sets, planning a sequence of objective-oriented ads to funnel down audiences and by defining consumer personas with precision and accuracy."

Das also feels that inaccuracy of location data is a big challenge for marketers and this can crop up due to unreliable methods of pulling data, poor data interpretation, etc. "Privacy is another challenge for brands. With growing concerns about privacy worldwide, more and more consumers are hesitant to share their location data with apps fearing that companies might share their private information with third parties. Going forward, when more services get on to location-based push notifications and content, it can become very overwhelming for the consumers. The challenge then will be to stand out in the clutter and make your brand still relevant so that consumers would love to hear more from you,'' explains Das.

Experts feel brands should leverage social media for location-based marketing. Daksh Jaiswal, vice president, One Impression, says Facebook allows advertisers to pick a specific location and run a specific ad campaign, targeting users in such an area. "For instance, a fast-food chain could target people in an area and drive them to the specific outlet in their area, by promoting discounts, offers, etc. Similarly, with this power of identifying and targeting users in a specific area, brands can tailor campaigns as per the local language and culture. Instagram has a similar modus operandi, when we talk about location-based advertising, while Twitter allows advertisers to geo-target using location, country or language. Brands can use these as lucrative advertising channels, targeting users and engaging them using campaigns customised for them," says Jaiswal.

According to Shah, location-based advertising needs to be exploited with a combination of parameters namely offline network of the brand, existing data the brand has, and consumer insights and pattern analysis. "Objectives for the brand might differ. Objectives then need to be mapped to various parameters effectively. For example, a geo-targeted campaign to get consumers to a street-level outlet or a business will work effectively as opposed to one situated on the 3rd floor of the mall. Also, with just one aspect of the location-based campaign, you cannot expect the consumer to walk in. It needs to effectively be part of a bigger strategy to get the brand in the consideration set and then close the deal with a timely exposure which is geo- targeted." Shah explains that the future for location-based marketing contains three significant elements: regulation, a proliferation of new data sources, and attribution.

"The end goal is a uniform framework that both consumers and businesses willingly embrace, and one that provides more transparency and control over data practices across the entire data ecosystem," adds Shah.