Location-based mobile advertising is expected to become a major marketing tactic with ad spend totaling $1.8 billion in 2015, according to an ABI Research study.

National brands are already adopting hyperlocal strategies as mobile technology improves and location-based services gain prominence. Geotargeted campaigns could be a major component of many advertisers? marketing mixes in five years time.

?The key finding beyond the data is that location is now becoming an actual parameter that marketers can use, and leverage in new ways that they haven?t been able to in the past,? said Neil Strother, Kirkland, WA-based practice director at ABI Research. ?Location has obviously been important to advertisers in the past.

?But, with the personalization of technology on the mobile phone, it?s possible to target people when they?re really close, or even right in the store,? he said. ?The technology is becoming robust enough as we speak to be able to use it in lots of different ways.

?The first shoots, if not the first fruits, of location-based advertising are now apparent.?

ABI Research provides analysis and quantitative forecasting of emerging trends in global connectivity.

Location-based boom
Three sets of technology will drive the burst in location-based ad spend: GPS, Wi-Fi and Cell-ID, which locates users based on proximity to cell towers.

The tactics that will see the most play are geofencing and check-in services, followed by navigation.

The brands likely to spend the most on location-based services are those who have physical locations and are aiming to increase foot traffic.

Prime candidates include bricks-and-mortar retailers, restaurants and bars, hotels, entertainment venues, automotive companies and consumer packaged goods brands.

Mr. Strother outlined five important steps in the planning process: establishing marketing goals, analyzing mobile and location habits to develop a marketing approach, chosing a location partner and determining the right technology, executing the campaign and measuring the results to iron out inefficiencies.

Brands hoping to drive sales via location-based advertising must understand the role of context in good messaging.

For example, there is little value in targeting a mobile user with a location-based ad with an offer for dinner if the time is mid-morning.

Here to stay
Location-based advertising has been gaining clout this year as early campaigns have produced promising results.

In fact, geotargeted mobile coupons and ads are more effective than their online counterparts, according to a FitForCommerce executive (see story).

A number of national brands such as Pizza Hut (see story), Sheraton Hotels & Resorts (see story) and Sonic (see story) have already tested out location-based mobile advertising initiatives.

More brands will begin investing heavily in location-based advertising as early success stories prove the high degree of precisions afforded by the technology.

?I was surprised by the granularity [of location-based advertising],? Mr. Strother said. ?You can really highly target by location, almost hyper-target.

?The concept isn?t new,? Mr. Strother said. ?But, it?s now being leveraged, even at early stages, and it?s in the market.

?This is not just some theory ? it?s here.?

Final Take
Peter Finocchiaro, editorial assistant at Mobile Marketer, New York

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