Retail spend on local campaigns up 433pc during holidays: Nexage
February 10, 2014
In the fourth quarter, retailers increased spend on local, mobile campaigns during the holidays by 433 percent for those based on ZIP code and 142 percent for those based on latitude or longitude, according to a recent report from Nexage.
The Nexage Analytics Report: Brand Spend Takes Flight report found that 46 percent of marketers and agencies thought that mobile was important as an advertising vehicle and 85 percent think it will be important in three years. Nexage claims that since more consumers have shifted to mobile, marketers and agencies are now playing catch-up.
"I think retailers are creating different geo-fence structures for different campaigns, which is giving them different methods of attracting consumers to events or stores," said Victor Milligan, chief marketing officer of Nexage, Boston, MA.
"Larger geo-fences can leverage ZIP code, smaller geo-fences rely on lat/long," he said. "The portfolio of both gives retailers the greatest options and likely the best results.
"ZIP-based targeting can be a powerful method to extend reach, especially in areas where tight geo-fencing may inadvertently create reach scarcity. The trick is to play with the location structure that makes the most sense for the campaign, for different days of the week, among other considerations."
Now that mobile is becoming a more respected channel for marketing, ad spend is increasing. Total ad spend on the Nexage Exchange grew 80 percent during the holiday season.
Retailers in particular embraced mobile more aggressively. Brand spend specifically increased 135 percent during the holiday season, peaking at 70 percent of total spend.
There was a spike on Black Friday, topping the daily average the preceding weekend by 29 percent and the following weekend by 21 percent. During the three weeks after Black Friday, daily retail spend increased by 103 percent on Saturdays, compared to other days.
One of the main goals of retailers in the fourth quarter was to increase store traffic, so retailers pushed a lot of geolocated campaigns.
Local campaigns that leveraged ZIP codes or cities increased 433 percent, and hyperlocal campaigns that used latitude/longitude increased 142 percent.
While an increase was definitely expected around the holidays, Nexage expects this increase to kick-start a long-term acceleration in mobile ad spend. The company predicts that mobile spend will overtake online spend by 2017.
Mobile ad spend
As marketers realize the greater potential in mobile advertising, it is interesting to watch how the ad themselves evolve.
This past quarter seems to show a greater interest geolocated ads.
Last summer, marketers were focusing on real-time bidding, with Smaato reporting that its RTB ad exchange hit a $110 million annual run rate this month, while Nexage saw more than 50 percent of revenues on its exchange coming from RTB (see story).
"Retailers took greater advantage of mobile to drive more lucrative in-store sales," Mr. Milligan said. "Retailers like Walmart and Target have shown significant growth from 2012 on the Nexage Exchange, and it shows that the power of mobile is significantly enhancing holiday sales."
Rebecca Borison is editorial assistant on Mobile Marketer, New York
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