The location data that consumers share makes it possible for advertisers to reach consumers with unprecedented precision. By interpreting mobile signal locations and attendance patterns, we can reliably understand which mobile consumers are athletes, frequent shoppers, business travelers, and more. This data enables not just advertising but marketing programs of all types to be tailored to consumers using their real-world behavior. This precision makes audience reach largely irrelevant.
Precise targeting starts with correctly interpreting consumer behavior captured by location data—by no means can this information be treated the same way. Broadly, consumer behavior falls into three categories: 1) habit, 2) interest, and 3) intent. Depending on your campaign objective and the product or service to be promoted, you’ll want to focus on the location data and consumer behaviors that are the most relevant to your campaign, which in turn helps right-size your audience.
Much of location data reflects the daily habits of U.S. consumers. If I routinely visit a neighborhood Italian eatery, chances are I’ll visit again one day soon. It could be my favorite restaurant, or it might just be convenient. But, it doesn’t mean that I’m uninterested in other restaurants, or that I don’t like steakhouses or sushi.
Data about our habits signals intent to revisit a venue or repurchase a product or service. From a marketing standpoint, this data is well-suited to promote more frequent, less expensive purchases – such as a meal at a restaurant. For purchases in this category, it’s okay to be less precise and to reach a more general audience with location-based behavioral targeting. If I were to advertise my favorite Italian eatery, I might choose an audience like “pizza lovers” or “casual diners,” since both groups are likely to be interested in my restaurant offer, and a broader audience reach will result in higher foot traffic and sales.
Other location data reflects consumer interests and affinities, like sports or music. While not daily purchases, consumers may attend local sports events each week, or purchase game tickets once-a-month. Consumers are also likely to spend more disposable income on their interests and hobbies.
Consumer interests, however, are far more individualized and specific. If I’m from Philadelphia and attended the Super Bowl this year, I may be interested in Eagles’ season tickets. But I’m highly unlikely to be interested in season tickets for another team.
When promoting a product or service tied to consumer interest, you’ll want to be more precise with audience targeting. If you’re advertising tickets to the Masters, look for consumers who’ve attended other golf tournaments, or who’ve visited golf courses or golf stores. If you’re promoting Tim McGraw and Faith Hill’s upcoming concert tour, advertise to “country music fans.” While total audience size will be smaller, targeting more people in related categories—like rock concerts or jazz festivals—is unlikely to boost conversions.
Finally, location data can signal intent – consumer behavior that suggests a different, future behavior. Intent is critical to effectively marketing infrequent and expensive purchases. Think of buying a new car: It’s an infrequent purchase that, once made, won’t be repeated for several years. That’s why it’s critical for marketers to anticipate what happens next.
A great indicator of intent in the real estate industry are visits to an open house. These consumers are likely in-market for a new home and will soon buy new furniture, purchase homeowners insurance, and order internet service.
The strongest signals of intent can also be a combination of behaviors. If I’m marketing a high-end exercise bike, I want to reach consumers who bike, have high disposable income, and perhaps live in an area with frequent inclement weather patterns that prevent them from biking outside regularly. This means including people observed at events like spin classes and places like higher-end hotels, department stores, or country clubs. My resulting audience reach will be small, but highly targeted.
When is audience reach relevant?
Audience reach is still relevant for brand campaigns where the primary goal is to drive awareness by reaching as many consumers as possible. Reach without relevance is fine for mass-market consumer goods that are used and purchased indiscriminately. Consider paper towels or toothpaste – products are used by virtually everyone and purchased multiple times a year. There’s little differentiation between products and multiple opportunities to capture that customer again.
But for everyone else – the trade-off between reach and relevancy is an easy choice. The rarer the purchase, the higher the stakes – and the more targeted the audience. A fast food restaurant targeting “fast food diners” or customers of a competitor chain will generally see 40-60% improvement in CTR. An ad campaign promoting a rare or specialized purchase, like a high-end media system, can see CTR improve by 200% if they choose the right audience. As targeting increases, so does ad performance.
The more expensive and infrequent the purchase, the less relevant the audience reach becomes. Given the data options that exist today for targeting – from demographic and purchase data to location and consumer behavioral data – marketers are remiss not to use the data available for their marketing campaigns. After all, it’s in service of what the consumer really wants.