Live at AdTech: Some Love for Local

Neal Polachek and I are at AdTech today and tomorrow and noticing some love for local — something traditionally missing from the mostly brand marketing-focused show.

This mostly came in the form of a location-based advertising panel this afternoon. Local was first framed as one of the oldest targeting metrics — before behavioral and contextual — including merchant signage that traditionally hung outside stores to attract those who walk by.

When marketing moved online en masse, location was pushed aside by brand marketers in favor of newer, and more popular, targeting mechanisms possible in this medium (behavioral, contextual, etc.). But things now happening in the mobile world, such as better location targeting, are starting to lead the way for what is possible online.

Moving Beyond IP Targeting

Location targeting generally is enabled by three main data sources, explained moderator Josh Goldman, partner at Norwest Ventures. These include solicited (ask users), inferred (i.e., behavioral targeting), and computed (IP targeting, Wi-Fi positioning, etc.). It’s this last category where many of the panelists’ companies focus and where things are happening to make location targeting more “sexy.”

Placecast, for example, thinks of its targeting based more on the place than the user. This flies in the face of things like behavioral targeting but maintains that the world can be looked at as a series of tiles. Depending on what tile a user is standing on, much can be gleaned about his or her receptiveness to different content and advertising. As we’ve written, this takes into account other important vectors such as time of day, day of the week, timing of events, holidays, etc.

“We’ll take in information on all of these vectors and decide what is most relevant to return to the user,” said Placecast CEO Alistair Goodman. “This can create marketing that is a service, rather than an intrusion.”

Loopt meanwhile is building a self-service ad platform to show location relevant “mapvertising” on its popular mobile social network. This allows advertisers to likewise target based on time of day and other factors that are hooks to get nearby users transact. The targeting radius is defined by CEO Sam Altman as a function of population density; his example is of Manhattan seeing desirable target audiences to be within blocks rather than miles.

“There is an inverse relationship between density and the value radius of an ad,” he says. “Rural areas clearly go for bigger hit zones for where you sell ads, and their proxy for radius differs wildly from a place like Manhattan.”

Make Love, Not War, With Local

NearbyNow‘s Scott Dunlap weighed in with the perennial research online/buy offline (ROBO) concept. Better location targeting and mobile technologies will do a great deal to push this forward. One example is QR codes — small bar codes that can feed product data into a phone via its camera. This is something that has seen a great deal of traction in Japan and signs of development here.

For years, e-commerce sites have been in a war with physical stores to disintermediate them — or “turn JCPenney into the world’s largest display case,” says Dunlap. But more recently, many sites have come around to the reality that more than 95 percent of U.S. retail activity happens offline. So we’ve seen growth in sites (and new functionality on existing sites) that “find it locally.” NearbyNow is one of the early movers.

“We’re seeing a 17-to-1 ratio of users that choose to find it offline versus buy it online,” he says. “You have to be in this game, or things like QR codes are pretty scary. As soon as [QR capability] gets embedded in more phones and applications in the U.S., it will take off and then the war is really on.”

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