What is hyperlocal advertising?

23 Jun, 2016

By Neil Alldritt, CEO at Crimtan

As people continue to shift their attention away from traditional media to mobile-enabled platforms, marketers need to evolve the ways in which they engage with targeted groups who have grown more resistant to advertising.

Consumers now spend less time in places where marketers have traditionally had an advantage in reaching them, such as in-front of the television, while people’s attention has fragmented across multiple channels as media and technology increasingly diversify.

Interestingly however, one of the oldest forms of advertising, out-of-home, is flourishing in this new digital world, thanks to screen innovation and a rise in the number of poster and billboard sites.

Last year, advertisers in the US spent $2.96 billion on digital out-of-home (DOOH), according to eMarketer. Digital made-up over 40% of all out-of-home spend during 2015, up from 38% in 2014. By 2018, DOOH will capture 53% of total out-of-home ad spending in the US, or $4.08 billion. While globally, DOOH will experience double-digit growth for the next few years.

However, if changes in consumer behaviour has resulted in a population that looks down to their smartphone and tablet screens, how will the effectiveness of a media which requires people to look up and around their environment to absorb out-of-home messaging be maintained?

Better bedfellows

One answer is to ensure that out-of-home and digital become better bedfellows, complementing each other to reach people in whichever position their heads are tilted.

In the UK, new research carried out by industry body Outsmart, shows how OOH already connects to people’s smartphone habits and has the potential to radically impact on consumers’ online interactions with brands.

Working with research group Ipsos Mori, Outsmart recruited 470 people aged 16 to 44 for a study that ran in November.

Each participant downloaded two apps onto their smartphones; one that tracked their location and another that monitored their online behaviour on the phone, such as URLs visited and search terms entered into their browser. The participants were told the study was about how they use their smartphones, but were not told that it related to OOH advertising.

This allowed Outsmart to passively capture behaviour and see if there was any relationship between smartphone activity and the OOH sites that people walked past or were exposed to.

It discovered that people who had seen an OOH advert were 17% more likely to interact with the brand or campaign in question on their phone than those who had not.

It also found that 57% of people who engage with a campaign on their smartphone after an OOH exposure are either new or lapsed customers of the brand in question (a vital target audience for business growth). Outsmart calculated this statistic by surveying the participants about their shopping behaviour and preferred brands.

According to the research, the 20 most effective OOH campaigns achieved a 38% uplift in smartphone ‘brand actions’ compared to people who had not been exposed to the campaign.

This included direct actions such as searching for the brand name or campaign tagline, or navigating to the brand’s website, as well as secondary actions such as researching a particular aspect of the advert’s creative or something indirectly related to the brand.

The research also found that 66% of all smartphone actions were direct to the brand, while 57% of all actions occurred within two days of the last exposure to the outdoor ad.

Deeper connection

So out-of-home already has a synergy to how people consumer media, shop and search on the move. But what if that connection could go deeper?

If a brand like Waitrose for example, was planning an out-of-home campaign for the recent launch of its premium-owned brand Waitrose 1, it could support its posters and digital billboards with geo-targeted digital display ads, aimed at web and app users in the same locations.

We call this ‘hyperlocal’ targeting. It means the brand could run a poster or digital billboard in selected postcodes around the UK and digital ads could then be delivered to mobiles, tablets and PCs in the precise locations where the posters are being displayed.

Not only that, but the digital ads could be targeted to a specific demographic such as women, aged between 30 and 45-years-old who own a MyWaitrose loyalty card.

It doesn’t stop there either. It can also be done with DOOH on the move, such as taxi advertising.

By assigning audience profiles to each London postcode, hyperlocal targeting makes it possible to automatically change the ads displayed digitally on the roof of a taxi as it moves between different audience groups.

The point is that customers don’t just exist online or offline anymore. When we walk around our towns and cities, we may observe our surroundings or we may be distracted by our mobile devices.

For this reason, advertising shouldn’t operate in isolation. It should help to improve the impact of different formats. By out-of-home and digital display working better together, a sea of data can be used to amplify specific poster sites so that your customer will receive relevant messaging at the right time and when they are in the right place to respond.

For those looking to pursue a hyperlocal advertising project, I have these tips:

  • Marketers should examine whether they could use recent advertising technology developments to create a more connected media strategy and get the best ROI on their spend. Could all the elements be coordinated so they work better together rather than as separate elements?
  • All retailers need to know how each part of the marketing plan affects sales; for example, does a poster or online campaign drive more sales locally? By benchmarking site visits, online and offline sales, you can run elements in isolation and then together to see how they affect sales.
  • The latest marketing technology is more measurable than ever, and should more than pay for itself, so make sure the CFO knows there are clear marketing goals with a measurable ROI.
  • The biggest challenge is seeing through the marketing hype. Make sure that any company you are considering offers full transparency of technology and performance. You should have full visibility into what data, inventory and strategy works, and make sure to ask important questions about data sources, targeting ability and dynamic creative options.

This article appeared in MyCustomer