25
Oct
2019

Commentary: The State of Localized Programmatic – Why Marketers Need to Adopt a Personalized Digital Strategy

10/25/2019

This article originally appeared in MarTech Advisor

By: Ryan Horn, Senior Vice President of Marketing for Simpli.fi

 

National campaigns have traditionally been at the forefront of every marketer’s strategy and are consequently where the majority of advertising dollars are spent. However, within The State of Localized Programmatic Report you’ll find that for years there has been a growing demand for more personalized advertising. In fact, BIA/Kelsey forecasts that national brands will spend $62.7 billion to reach local consumers this year, which represents a $600 million increase compared to what national brands spent locally in 2018.

 

The Explosion of Personalization

Every marketer knows that customers expect a personalized experience, but where did it all begin? A good bet would be: the smartphone. These personal devices forever redefined how people find information and purchase goods and services and in turn, provided another avenue for advertisers to reach individual consumers. The daily lives of consumers have changed, with most people spending more than five hours a day on mobile devices, and for marketers to succeed, they need to meet the consumer where they are—which happens to be on their smartphones.

Mobile phones are one of the greatest resources for personalization due to the ubiquitous use of location services and location data. This data provides marketers highly targeted insights in order to reach the right consumer, at the right time, in the right place. In 2018, programmatic mobile ad spend in the U.S. grew 25%, from $24 billion the year prior. Mobile will soon account for around 78% of the $46 billion programmatic ad market, according to eMarketer.

Location intelligence also makes the online-to-offline connection more transparent, and allows marketers to track the ROI for personalized, location-based targeting. According to data from Simpli.fi, location-based mobile targeting solutions drove an average 391% increase in incremental physical site visits for clients from target areas as reported by Geo-Conversion Lift in 2018. Advertisers need to embrace measurements that relate to sales and push their partners to adopt conversion-based metrics so that they can track how mobile advertising spend has impacted their business.

The use of mobile and the resulting power of location-based targeting sits at the center of a massive industry-wide shift in the way marketers deliver targeted ads. Location-based intent data helps marketers go beyond targeting on things like cookies and search data, and precisely reach the right consumer based on how they have interacted with both the digital and physical world together.

 

Localized Programmatic: Who Has Adopted It and Who Needs It

The importance of localized targeting cannot be overstated. Nomenclature, local preferences, and buying habits vary widely from city to city across the country. But it’s rare for advertisers to have the technology or staff to personalize campaigns to the needed degree for tens, hundreds or thousands of markets.

The need for advertisers to adopt a localized programmatic strategy to increase performance is clear. The advertisers who stand to benefit the most from a localized programmatic strategy are multi-location brands, agencies who service them, and local media groups seeking to localized audiences for national campaigns.

 

The Transformative Power of Unstructured Data

One of the most successful developments for a localizing programmatic strategy are technology innovations that allow for the use of unstructured data. Structured data and audience segments have traditionally been leveraged as the most effective means for targeting. However, these segments have significant limitations when it comes to programmatic marketing, including unknown data sources, no visibility into recency of intent or actions, along with the fact that optimization can only occur at the segment level, not the data element level. These limitations are not a concern with unstructured data, as it provides the ability to target dynamic audiences with pinpoint precision, based on the desired individual data points, allowing advertisers to create and customize their campaigns at scale, in real-time.

 

Growth Areas in Localized Programmatic

For marketers to understand which programmatic mobile strategies are working, and optimize these strategies in real-time, geo-fencing, addressable geo-fencing, and OTT/CTV have emerged as the leading trends in the state of localized programmatic.

  • Geo-Fencing
    The entry point for many advertisers into localized marketing is Geo-Fencing. Geo-Fencing is a location-based mobile advertising technology that utilizes latitude and longitude data to target specific geographic areas. These data sources and filtering models ensure highly accurate GPS data so that advertisers can reach individuals based on the locations the’re in or have visited previously. Advertisers have been quick to adopt this targeting tactic and it has largely been responsible for swaying national advertisers to invest in localized mobile ad spend. In fact, the Global Geo-Fencing Market is estimated to cross $1.7 billion by 2024.
  • Addressable Geo-Fencing
    One of the largest growth areas for localized programmatic is Addressable Geo-Fencing. Addressable Geo-Fencing is a revolutionary way to target specific households and businesses with digital advertising, such as mobile, video, and/or OTT/CTV ads. Addressable Geo-Fencing is the next logical step in the localization and personalization of programmatic advertising. This solution uses plat line and GPS data, rather than IP-based targeting, to deliver programmatic advertising to specific households from first party databases or curated lists based on various demographic targeting variables.
  • OTT/CTV Advertising
    As new consumer TV viewing habits shift towards streamed content, it is becoming more important than ever for marketers to incorporate CTV advertising into their marketing strategies. In fact, streaming video subscriptions has now surpassed cable subscriptions worldwide for the first time. In response, programmatic has seen an incredible amount of budget shifting this year as TV buyers rearrange their linear budgets to test the reach and frequency, along with the targeting capabilities, analytics, and attribution that come with CTV advertising. This is most certainly the space to watch, and it looks like streaming content is not only here to stay but is poised to continue taking over the video content market.

 

Adopting A Strategy

Marketers see the need for more personalized, localized targeting when it comes to their advertising, and the market is growing in reaction to this need in order to achieve higher performance. It is imperative that advertisers understand the consumer expectations that are behind the shift to localization and have informed conversations about the benefits to adopting a localized programmatic strategy. Multi-location brands, agencies that serve them, and local media groups seeking to localize audiences for national campaigns are the advertisers who stand to benefit the most from a localized programmatic strategy. Through utilizing geo-fencing, addressable programmatic, and OTT/CTV advertising tactics, advertisers can precisely reach the right consumer at the right time, tying together both the digital and physical worlds.