Location Based Ads: The Future of Advertising?

Location-based ad targeting is a growing trend in the advertising industry. These ads are sent to mobile users via text or Tweets as soon as an individual checks into a store or location using Facebook or Foursquare. LocalResponse is a new company that has received $5 million from venture capital investments, according to an article by AdWeek. The article discussed that there are two types of location-based ads, explicit and implicit. Explicit is when someone checks-in via Foursquare or Yelp, and implicit is when people tag photos when they are at different locations.

According to the article, LocalResponse has software that allows them to tweet replies to a user’s check-in with a link to that business’s site or an offer. They say this has received an average of 40 percent clickthrough rate. This trend will most likely increase during the holiday season as advertisers and businesses like Macy’s are using QR codes and location-based targeting to reach customers. If effective, this should increase sales significantly.

Another interesting use of location-based targeting was used by Verizon. When people would check-in at competing cellphone companies or post complaints about a company, Verizon would respond with a tweet offering $100 to switch services to Verizon. According to the article, this campaign generated a 135 percent clickthrough rate. Location-based ad targeting will likely increase in the next few years, but there may be issues of privacy. Not everyone enjoys the idea of people knowing exactly where you are and what you’re doing; however, there are those that have boarded the technology train that will empower this type of advertising.

To read a few articles about this topic visit:
http://www.adweek.com/news/technology/location-based-mobile-advertising-real-135758
http://www.adweek.com/news/advertising-branding/dreaming-mobile-christmas-136213

This article counters mobile advertising and says that social media marketing is the future:
http://www.adweek.com/news/technology/facebook-brand-exec-rip-traditional-marketing-136326