You walk by a Starbucks with your smartphone in your hand and the advertisements on the app all change to tell you about their latest drink. We’ve all heard this pitch for years and it’s still not here yet.
Mobile geotargeting has grown leaps and bounds since smartphones hit the scene. But speed as well as privacy are two of the major reasons why the above-mentioned scenario is far from the norm. Mobile advertising can definitely target to where you are, but to what level of granularity? Below are the five hurdles to overcome before geotargeting can become that detailed.
DMA as a Default: Most geotargeting for advertising is handled at the DMA level as the information passed back up from the device is easily processed through open information to locate exactly where they are. Millenial Media, Jumptap, and Greystripe all offer DMA as the most granular form of geotargeting advertising available. The problem here is DMA targeting is great for something like a TV, but not so for mobile. A TV doesn’t move around, but a phone does. What about GPS? That’s not going to help. Mobile networks don’t get this granular — and don’t have any near-term plans to do so.
GPS is Not Instant: Even if networks were to use GPS for targeting, it wouldn’t help much. Opening up a map app on any smartphone will prove just how slow GPS is. In some areas with a clear signal and not a lot of cellphone congestion, you can probably get it up pretty snappy, but is that the audience that we’re trying to target as they walk by Starbucks? Probably not. In New York, it can take minutes for the map app to work and that’s if they don’t give up on it. Now, add in the fact that the map app has one purpose, to show a map. Most applications have several other functions going on at launch that will be taking up device and network bandwidth to fully load. Take Foursquare, for example. An app that focuses solely on your location, yet it can take quite a while for it to figure out where you are.
Battery Life: For all the incredible advances in mobile technology, battery life remains a significant barrier. A constant GPS connection would drain a smartphone pretty quickly, so there are few applications that offer it, especially for advertising. The rest are mostly car-navigation apps. When the app loads, it makes a call to the satellite. Unless prompted again by an in app function, the app is unlikely to try to pinpoint your location again. Turning off a smartphone with the app open then coming back to it can often result in the original location still registered as where the device is. The issues this brings up relate more to where geotargeting can go, when it gets down to where the exact user is. If technology can’t keep constant tabs on him, how will it know when he’s walking past Starbucks? In its current form, there’s not a lot of worry about a user crossing DMA on foot or car right now and losing impressions that way.
Audience Size: There is the typical problem for any targeting technique. The more defined you get, the smaller the audience and the more likely it won’t be worth the trouble. For all the talk of small as the new big, advertising is still a scale game. Mobile has particular issues. Adding such strong targeting parameters to a campaign will obviously limit the audience size, which explains why there’s no real support for it in mobile so far. The smaller the campaign, the less revenue, and the more cost spent configuring and running it. Let’s take Manhattan as an example. Around 1.6 million people there. If one out of every three people has a smartphone, that’s 528,000 smartphone users in Manhattan. Now, depending on the popularity of the app and its availability across all platforms, the number will decrease drastically, unless of course you’re Facebook. For the user to see your ad, they need to be using their phone, accessing the specific app, broadcasting their GPS location, and walking past the store. With those variables, it would be hard to calculate any sort of realistic numbers for the campaign to reach.
User Approval: For most smartphones, the apps have to ask to gather your location. Apple has made it even harder than that as not just any app can ask for your location, it has to have a valid reason (like providing a local news section). The user can then decide if they want to share his location. Some completely disable their location services through the phone so that nothing has access to that information at all. Networks like Millennial Media have published reports that they’ve been able to target very specific locations, in fact it claims to have targeted within given New York blocks in its McDonald’s campaign. Millennial declined to comment on when they were getting the information to target the user– was it their home, office, or were they right outside the location? It also would not provide the size of the audience and engagement statistics. So while there are companies out there that are dipping into this type of service, these campaigns are still more effort than return.
Make no mistake: geotargeting on mobile is a huge opportunity. The industry will get to where it can show ads to people in very defined areas. But it’s not there yet.