A crowd of people staring into their smartphones as they walk down the street is no longer a scene from a satirical movie. It’s exactly what we see every day around us.
At home, in the street, in a parking lot—we’re ready to get our smartphones out of our pockets any moment. It makes a good reason for restaurants, barber shops, stores, and other businesses to use geo-targeting to advertise to us when we’re literally close to them.
Geo-targeting is in trend. The location-based advertising market is expected to grow at a CAGR of 13.20% during 2022–2027. Let’s take a look at the reasons for such a takeoff.
What Is Geo-Targeting and Who Benefits from It?
In-app geo-targeting is based on the GPS data collected by smartphones. As long as people feel comfortable about permitting apps to track their location, it works. And marketers eagerly rely on it heavily according to GoodFirms Research 2022.
To run in-app ads targeting specific locations, you need to have appropriate features in your ad serving software. Geo-targeting is certainly available on Google and Facebook. Yet, you also can have it in your own ad-serving platform.
However, there are a couple of limitations to location-based advertising. First, the share of people concerned about their data privacy is growing. They are unavailable for in-app geo-targeted ads. Second, some people use VPNs. Targeting them by location doesn’t make much sense, as it’s determined incorrectly.
How Geo-targeting Enhances In-App Advertising
The major benefit of location-based targeting for advertisers is focusing on people who live in the most relevant areas. For example, a coffee shop can target people from nearby streets that are more likely to visit their location than those who live farther away. It translates into more conversions and a better return on investment for their ad campaigns.
The developers monetizing their apps with ads benefit from geo-targeting in advertising too because they strive to localize content in their apps to make them more relevant to users. There is more to it than just showing information in the right language and displaying prices in the right currency. The whole user experience, including the ads served in the app, should take into account users’ location.
The Geo Factor in Broad-Reach Campaigns
Geo-targeting helps create broad-reach campaigns that target people living in a particular country, region, or city. Let’s consider some examples.
Imagine a national restaurant chain that owns locations in different cities and regions. Due to the specifics of the local climate, they can serve different seasonal promotions to their customers. And to know what dishes to offer to each customer, they need to tune geo-targeting into their ad campaigns.
A large store chain running outlets all over the world can leverage geo-targeting to advertise to people only the products that can be delivered to their location. Moreover, fashion trends and outdoor temperatures vary across the globe and location-based targeting helps advertise clothes that are in demand.
The Power of Hyper-Local Ad Targeting
Using geo-targeting you can also run hyper-local advertising campaigns to reach people on a particular street, near a particular shop, or at an event venue. Let’s consider some examples of hyper-targeted campaigns.
- Say, you own an online store and want to empty your stocks with a minimum delivery burden. Then, your final sale campaign should target people who live near your stock location.
- If you own a brick-and-mortar store, you can attract customers by promoting time-bound coupons in apps for tourists to people visiting nearby attractions or entertainment venues. If you reward them with a great deal, a five-minute walk to your store won’t seem daunting to them.
- Another way geo-targeting can empower your business is by upselling people who are already in your place. You can advertise products available at that location inside your own app if they use your store’s app at checkout and increase their transaction value with last-minute purchases.
- You can also target loyal customers when they’re visiting your competitors’ locations. For example, you can send push notifications to your app enticing users with discounts to prevent them from making purchases when they’re at your competitor’s store.
Many hyper-targeted campaigns rely on geofencing technology, which is a specific type of location-based targeting.
Geofencing vs. Geo-targeting
Geofencing allows you to target customers whose GPS indicates that they’re within a radius specified for a particular location. It works as if people crossed a virtual “fence” built around a venue. When people are inside the fence your ads target them, but when they are outside—they don’t.
For clarity, geo-targeting and geofencing are two different things. Geofencing is primarily used by brick-and-mortar businesses for quick conversions in a very specific narrow location. As for geo-targeting, any business can use it to target audiences in an area of different sizes, whether it’s a one-mile radius or a country-wide campaign.
In recent years, geo-targeted in-app advertising has grown exponentially. That’s because geo-targeting proved to be a win-win-win for advertisers, app owners, and app users. Localized ads result in higher ROI for advertisers, smoother monetization for app owners and better user experience for consumers.