Great, another ad network that offers some kind of twist on behavioral targeting. Except this one might actually be different. Instead of relying on cookies, scientific modeling, semantics, or old school contextual relevancy, LocalResponse says it can deliver ads to people who actually say they are going to visit a specific business, or even better are already at that business — where they might just buy something.
The startup has rolled out a new ad network which aggregates data from social media posts and ‘check-in’s’ consumers register via applications like Foursquare and Gowalla that are specificaly related to local businesses and/or national chains.
LocalResponse is the brainchild of Nihal Mehta — a serial entrepreunr who founded the local city guide Buzzd and the early mobile marketing agency Ipsh. In March, the company brought on Kathy Leake, founder of Media6Degrees, which culls data from social media sites for ad targeting, to serve as president.
Back in April
the company introduced its first ad product, which enables local merchants to send ads to users as they check in or post where they are going. For example, a user who tweets that they are heading to a favorite restaurant might receive an instant tweet back from that restaurant promoting a special offer.
The new product is aimed at big brands — think national retail chains like Starbucks and Target.
Initially, advertisers will be only able to send LocalResponse ads via short messages using Twitter. But the plan, according to Leake, is for LocalResponse to establish similar ad partnerships with Facebook, Twitter, Foursquare, Gowalla, Loopt, Whrrl, Booyah, Instagram, Path, Color, Flickr, and any other social service in which consumers are declaring a location, either implicitly or explicitly.
For now, Twitter represents a pretty major opportunity. According to Leake, one of every 18 tweets are location based, and 60 percent of people who use location based services like Foursquare, Gowalla and even Facebook Places link their check-in messages to Twitter, providing lots of opportunities for brands to message back with ads. LocalResponse claims it compiles data on a billion check-ins each month, from 200+ million unique users.
And even though LocalResponse ads take the form of short messages, each tweet contains a Bit.ly URL that links to a customized landing page where brands can include all sorts of messaging, creative and offers.
Essentially LocalResponse’s new brand platform is designed to be a turnkey for brands looking to capitalize on the real-time check-in/social shopping pheneomon. It is easy to see the appeal; instead of setting up marketing programs with a dozen companies, agencies and advertisers could theoretically reach consumers on all these properties in one fell swoop.
“Most clients are looking for scale,” Leake added. “And the scale we provide comes from our ability to aggregate across platforms.”
The company is working on some interesting deals that could go beyond CRM and into “conquesting.” For instance, a person tweeting complaints about Time Warner Cable might get a Verizon FIOS ad. You can imagine Verizon would have ample opportunity to do the same with complaints about AT&T’s service in New York and San Francisco.
Plus, targeting users who are announcing to the world that they are visiting a business or favorite brand means they are probably more likely to be in purchase mode — or may actually be at the point of purchase when they encounter a LocalResponse brand ad.
The big fly in the ointment is whether consumers will see these kinds of messages as helpful and welcome or as spam. LocalResponse is keeping a tight lid on the number of ad messages people get. It is working closely with Twitter, according to Mehta, which is critical because Twitter has shown a willingness to cut off services it finds detrimental to the user experience.
LocalResponse’s early beta campaigns, of course, show success. According to LocalResponse data, click-through rates have ranged from 25 to 40 percent, with redemption rates for coupons, rewards programs and the like approaching 50 percent. Most new services boast high click rates initially before declining.
“Every other ad network out there is using some kind of approximation [for targeting],” said Leake. “Ours is based on explicit or implicit intent.”