Using location data to make advertising more contextual

Ankit Rawal

Since time immemorial Indians have attributed great fascination and pride to "location.” As any real estate agent will tell you, “There are three things that matter in property: location, location, location.”

One's “location” can help others draw inferences about your preferences, needs and consumption behaviors. In essence, the locations frequented by a user can help advertisers understand their real world behaviors and therefore location becomes critical to help users discover propositions that would interest them.

Until the recent widespread adoption of smartphones, advertisers only had billboards as a medium if they wanted to target consumers based on their location. While outdoor advertising has tried to innovate, multiple challenges exist with billboard advertising. It is a broadcast advertising medium, which tries to appeal to all audiences without any focused targeting or feedback loop mechanisms. The messaging is largely static (unless digital) and typically loses oomph after several viewings.

Hence, the smartphones that we carry with us everywhere have interestingly become a powerful medium for location targeting.

In the PC era, a mouse was magical as its actions made changes on the desktop screen. Mobile, with real-time location information has effectively become the cursor of the real world. Today, with a few taps on your smartphone you can get a taxi to pick you up, or find the closest Chinese restaurant, petrol pump or ATM machine. Interestingly, all the new on-demand services such as cabs, grocery and food delivery have existed for quite some time, it is just that the smart phone has removed a lot of real world friction, making the user experience magical.

Over the last few years, companies have made significant investments in location targeting capabilities.

The location targeting product capabilities may broadly be analyzed on two dimensions:

1. Targeting users based on where they are in the real world. The use cases within this category include:

• Targeting administrative regions such as country, state, city or zipcode as per the advertiser requirement. A typical use case for the above targeting includes on demand services (such as cab aggregators, food delivery companies) wanting to run campaigns only in their geographic service areas.
• Geo-fencing and Geo-conquesting (targeting within a specific distance of a predetermined location) is largely used by retailers, automobile dealers and quick-service restaurants to drive footfalls into their stores and distribute coupons or offers.
• Points-of-Interest Targeting: Another interesting manifestation of location-based targeting is the ability to use location as a proxy for audience and target users around specific points of interest such as airports, universities, railway stations, shopping malls and IT parks. Some of the use cases for this targeting include youth-focused brands targeting around shopping malls or universities and perhaps real estate companies targeting IT parks.

2. Crafting audiences based on the history of real world places visited by users: Places visited by a user can provide very clear insights into their behavioral attributes, enables creating custom audience segments based on real world actions. Some of the examples of such segments include:

• Business travellers: Users who visit airports and business hotels frequently.
• Working parents: Users who visits schools in the morning and an IT park subsequently.
• International travellers: Users who frequently travel abroad for business or leisure.
• Commuters: Users who visit bus or train transportation hubs frequently within a week.

The strength of the solution lies in the ability to combine “location” specific user information with “context” i.e. time of day/ week, weather, phone position (user leaning back or forward). This combined information is like a power tool in the hands of an advertiser.

As with all power tools, this one too needs to be used carefully and with responsibility. Successful advertising campaigns have always thought consumer-first and have benefited from collaboration with partners who bring in, apart from technology, an understanding of consumer targeting best practices. After all, the consumers’ interests need to be paramount.

The author is General Manager, India, InMobi