Why You Should Geo-Target For Your Advertisers

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(by Gabriel Barnes) When looking to pinpoint an audience based on geography, the terms geo-fencing or geo-targeting are often used. These terms are often incorrectly used interchangeably, creating confusion, so let’s clarify what they mean.

Geo-targeting is a broad term for the method of pinpointing an audience based on their location — ranging from as wide as the state to as granular as an address. Any and all advertising types can use geo-targeting to define a location applicable to each campaign.

Geo-fencing refers to a more specific application of geo-targeting, where a virtual barrier is created around a defined area, usually determined by a geo-targeting strategy. A geo-fence can be as broad as a state or as hyperlocal as a city block, and the smaller the geo-fence, the more granular the targeting. Geo-fencing is almost always used alongside other targeting elements, including demographics, search history, etc.

Both of these tools are finding their way into the hands of radio groups across the country, and with much success. Picture the following scenario:

Station X and Station Y are both pitching the same local Mercedes dealership on running a digital marketing campaign with their stations.

Station X educates the dealership on the value of advertising on the station website. The AE provides the dealership with the usual information about the station, including demographics, and analytics for its website. To the dealership it sounds very intriguing, because the average household income of the station’s visitors makes for a perfect prospect. However, in the back of his mind, the dealer feels like much of the site traffic wouldn’t be great prospects, and he is weary of having to “pay” for non-qualified traffic.

On the other hand, Station Y educates the dealer on the value of location-based advertising. The dealer is unaware of the concept, so the AE explains that the dealer can create virtual fences around all of his dealership’s competitors and show its Mercedes ads to anyone within range of those competitors.

Also, the dealer can draw a fence around his own dealership, add an additional targeting layer — household income — and show ads only to individuals who are inside that “fence” and meet the income criteria. The AE informs the dealer that there is a potentially smaller “prospect pool” than Station X’s website, but the smaller pool consists of highly qualified prospects, because ads are only shown to those who meet the requirements — resulting in a higher ROI.

Although this is a hypothetical scenario, who would you choose to do business with?

As “big data” continues to be dissected and businesses begin to have a very clear understanding of the who, what, when, and where of their revenue, the ability to strategically target areas that will drive traffic to stores or to websites will be invaluable. If you are still thinking you can pitch your “digital marketing” products — i.e., your website and some Facebook posts by your on-air personalities — you will continue to lose out to those who have the means to deliver geographically targeted ads.

So what can your station do now to get involved in geotargeting and geo-fencing for your advertisers? Here are three things I recommend:

  1. Do your own research. There are numerous businesses that offer geo-fencing or geo-targeting services, so be sure to compare. You can start by searching for “best geotargeting companies” or “geo-fencing solutions.” Be sure to be clear on whether you are looking to help an advertiser with being found on search engines or help them with branding through targeted display advertising.
  2. Categorize your advertiser database. Identify business categories that have many competitors in close proximity to each other. Car dealerships, for example, are everywhere, but the average person couldn’t list half of the dealerships within 10 miles of them. We know that most people do their shopping close to their home base and that the businesses they frequent tend to be located on streets or in areas that they drive most often. Helping advertisers target people who are nearby and who might be unaware of the business will increase site and foot traffic.
  3. Offer location-based advertising as part of a radio buy. Inform your advertisers that you can deliver custom online ads or messages based on their location — something a radio commercial can’t do. Due to demographics and other factors, a display for one location might need to be completely different from that designed for another area.

As always, it’s important to have a strategy in place before beginning something new. The beauty of this particular concept is that it doesn’t require any kind of upfront technology investment on the part of a broadcast station. It’s a matter of incorporating it into the rate card and then making an infrastructure investment.

So take some time to research the benefits of geotargeting and geo-fencing to increase your revenues. Who knows, you might be able to target competitor stations “steal” away listeners!

4 COMMENTS

  1. Indeed, radio (in general) is not ready for another “plug & play” technology – even if this one (above) represents a potentially worthwhile tack.
    “wayne” makes the point by implying – by bringing Roy Into the mix – the quality of the locally-produced ads is the most important element in generating more continuous sales – by generating more continuous results for the advertisers.

  2. While the Mercedes dealer might be wowed by the geek-speak and new technologies, alleged geo-targeting ignores how transient the market can be, especially for major ticket purchases. As Roy Williams says, over-confidence in qualitative targeting, is one of the twelve causes of advertising failure. In fact, Roy says “It’s amazing how many people become the right people, when you say the right thing.”
    The glamour of these new technologies might help make the sale, but I’m not sure we’re doing what’s best for the client by not reaching beyond the so-called ‘qualified’ boundaries.

    • Thank you for the feedback Wayne. I would agree with Roy’s point on having over-confidence in qualitative targeting might be a cause of advertising failure from time to time. I do think he is also making the point that qualitative targeting when used as the primary strategy above the creative being delivered is the true cause for failure.

      By no means am I saying that geo-location, as a standalone means of advertising, is best for all marketing purposes. Again, much of the pushback from those who are accustomed to traditional on-air advertising comes from the inability (from a technology standpoint) to do targeted audio advertising. I have a feeling most local advertisers would prefer to ONLY pay for those audio ads that are geared for those who they want to walk through their doors, instead of having to pay extra because of “reach” when most of those people listening aren’t real prospects.

      Give it 5 years or so and we should begin to see better targeting (coupled with the creative) for traditional ads as the technology lends itself to that capability.

      Again, thanks for the comment.

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