From King Arthur, to Dorothy in her ruby slippers, to the unlikely hero of Professor Robert Langdon inThe Da Vinci Code, legions of characters have found themselves on the quest to uncover the unknown, the solution to the core question of their time. For marketers, the question had fundamentally always been how could an advertisement be crafted so to be so hyper-targeted to a consumer’s wants and needs that it would fundamentally seem as though it were speaking directly to the consumer in question.
And then January 2007 came and Steve Jobs introduced the world to the iPhone – a multi-function smartphone that, through a previously unimagined user experience, enabled consumers to interact with the world around them. This was it. This was marketers’ Holy Grail. We salivated thinking of the potential that this handheld device had – one day, we dreamed that we would be able to target consumers directly outside stores with promotions on the products and services that were only footsteps away! How much more personal could we get than to actually speak to consumers based on the precise location they were in? We waited patiently. Slowly over the next years, we walked along the yellow brick road as a critical mass of consumers adopted smartphones (regardless of the platform), a number of publishers converted their desktop sites to usable mobile versions and technology advanced to allow banner ads to be delivered against an individual’s specific latitude/longitude. And then suddenly in 2012, like a perfect storm, it all started to come together as suppliers started to ping me to present how they had cracked the code and were now able to deliver hyper-local targeting.
Without hesitation, I called up a contact at an international retailer and asked whether they’d be interested in running a hyper-local test with us. Without a second thought, we found ourselves deep in the designs of a test construct whereby we were building geo-zones around 5 stores in the Greater Toronto Area. The plan was that, with the help of a market research firm, we would match consumer (demographic) interests to each of the postal codes found in the 5 geo-zones. Next, we would deliver a banner promoting savings on the correlated products outside each of the stores. For 2 weeks, we gleefully pushed millions of impressions to the webpages that smartphone users were generating in and around the retailer’s locations. The result: click-through rates that were moderately above industry benchmarks (0.57% CTR). It felt as though we had finally made it to Emerald City and ripped back the curtains to discover that The Wizard was little more than a really short AV geek.
We struggled with the results for weeks. What could have gone wrong? Did we not buy enough impressions on the mobile exchange? Was our creative not compelling enough? Was our geo-zone too small? Was our geo-zone too big?
While some truth likely lies in each of our doubts, the real problem with our initial test was that we had somehow moved away from what our original intent had been: to deliver ads that the user felt were speaking directly to him/her. The smartphone users that saw our ad already knew where the store locations were and that the products/services offered were priced at unbeatable price points. Our banners added little value to what they already knew or, frankly, against what they wanted to know at that specific time. Suddenly it all made sense. All of the hyper-local targeting suppliers who had been ringing me were going about it all wrong. By pushing brand messaging to consumers outside retail locations, they were assuming that passersby hadn’t seen the flashing branding in the storefront windows. By delivering hyper-targeted messaging within the brick-and-mortar locations, they somehow believed that the small 320×50 mobile ad would somehow deliver more punch than the flashy promotional offers that stood on the tables in front of the consumer. To truly go about mobile targeting differently and add consumer value, we needed to think differently. We needed to start targeting consumers with relevant advertising when and where they would most want and need the advertised offerings.
With this, we developed the notion of “Lifestyle Zones”: targeting audiences of consumers depending on their location but also their motivations given the time of day and their environmental surroundings. We sent out 5 differentiated creatives that spoke to varying consumer intentions depending on weather and time. Across the board, they delivered substantially higher than the industry benchmark and our previous test. The banner that we sent to Toronto, Montreal and Vancouver’s business districts that nudged consumers to go to the retailer after work to pick up the makings for their dinner that night delivered a 1.03% CTR at 4 p.m. – the exact time and environment when/where consumers were asking themselves what they would eat that night. Likewise, our ad that encouraged consumers to purchase discounted swimwear at the retailer delivered 1.85% CTRs via our hyper-targeted delivery to a small geo-zone built around Canada’s Wonderland, on the hottest day of the year. For full results of our test and our conclusions, download our whitepaper In a Customer State of Mind.More