Location - The growing importance for marketers - presented by Posterscope
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This report from Posterscope highlights the growing significance of location data in marketing, emphasizing its potential to enhance audience targeting in out-of-home (OOH) advertising. Key findings indicate that while marketers recognize the ROI opportunities from location-based strategies, challenges regarding data integration, privacy concerns, and the disconnect between creatives and planners hinder effective implementation. The research underscores the need for better collaboration and education among marketing professionals to leverage the full capabilities of location data for more impactful campaigns.
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Location - The growing importance for marketers - presented by Posterscope
- 1. The growing importance of location for marketers
- 2. About this report Location, and especially consumer location data, is becoming increasingly important for the marketing industry to connect with audiences and build brand recognition. Location’s role in marketing planning has been augmented by advances in technology, infrastructure increases and new data sources. Following qualitative and quantitative research into location’s evolving role, Posterscope published this report to share the audience targeting opportunities behavioural insight creates for business. This whitepaper also highlights research findings, including that increased collaboration between marketers, creative industry and media agencies is required to make location-based targeting a reality. Posterscope held a roundtable with industry leaders – including TfL, Asics, EE, Camelot, Doddle, JCDecaux, Havas, Media IQ, VCCP, Zenith Optimedia, Starcom MediaVest Group and xAd – to understand the challenges the industry faces in realising the new potential of location. Posterscope also surveyed more than 100 UK marketing leaders to determine current attitudes towards using location data in OOH campaigns. Key findings • Marketers believe location data holds significant ROI opportunities for the OOH sector, and are planning to increase investment as a result • The full potential of location data will be realised in 2019, according to marketers • Location data improves OOH, marketers believe, but an inability to consolidate big data channels is preventing them from turning it into actionable insight • Privacy remains top of the agenda regarding the exploitation of location data • Better integration and education is required between planners and creatives to ensure that the sector fully understands the capabilities of different data sources. 82% Believe the biggest challenge for marketers is the disconnect between creatives and planning 95% Believe location data makes OOH better 93% Believe it’s crucial to balance consumer data with providing value 93% Believe digital inventory increases will improve location data use 87% Believe mobile data is being underused 60% Over half believe relevant ads using location data will increase advertiser ROI by more than Marketer Insights:
- 3. The state of play Location has never been more important than it is today, and its role is growing. Where consumers are and how brands speak to them in the local environment is increasingly a key driver of business growth. New businesses like Uber, Airbnb and even Tinder have charmed the public by creating new consumer behaviours, all based around location. Now, consumers expect location-related content, and they’re increasingly happy to share their location data in return for this sort of reward. According to the latest Berg Insight research, worldwide mobile geo ad spend is worth €1.2 billion already and that’s expected to grow to almost €11 billion by 2019. In the US, figures from BIA/Kelsey state that 32 per cent of current total ad spend is geo-targeted, which is expected to rise to around 43 percent by 2019. Google claims four out of five consumers want search ads customised to their immediate surroundings. Geotagged Instagram posts receive 79 per cent increase in engagement compared to non-geotagged posts. IBM recently found that 36 percent of global consumers are very willing to share their location data with retailers. In short, location has found its footing, and now the outdoor advertising industry needs to incorporate this target audience specific data. In the out-of-home (OOH) advertising industry, location has always been of paramount importance. Having a great poster has never been the whole route to success, you also need to put it in the right place. New location technology has changed the media landscape, creating a new capability for OOH that enables advertisers to reach the right audience, in the right place and at the right time. Two key developments have fostered this new location capability. The first is the unprecedented growth of digital infrastructure. 2016 will see media owners across the board invest more than £100m into the creation of new digital infrastructure, in excess of 10 percent of turnover. Research conducted by Posterscope in January 2016 found that 95 per cent of marketers believe this growth in digital inventory represents a major revenue opportunity, and certainly the recent performance of the sector provides many reasons to be optimistic. Digital revenues have been growing dramatically, in excess of 25 per cent in 2015 year, and we estimate that digital’s share of total OOH revenue will grow to around 45 per cent in 2016. The second is the increasing range of new sources of geo-location data, which provide a deeper, more granular analysis of consumers’ locations and behaviours than the OOH industry has ever seen. We’ll explore the ways in which this data can be matched with outdoor commercial targeting opportunities in the next section, and how it can create exciting new opportunities for location-based marketing by enabling advertisers to plan with more accuracy than ever before. Research conducted by Posterscope in 2016 has found that marketers believe the full potential of location data will be achieved in the next three years. This has highlighted out-of-home's role to share new location capabilities with marketers so they can begin to adopt these highly targeted, impactful campaigns. By taking a proactive role in sharing these innovations with marketers, they will become better positioned to adopt oncoming changes and this paper will explore how these changes can be overcome.
- 4. Glen Wilson, Managing Director, Posterscope: “The prolific increase in available data and data sources is helping us to understand location in a deeper way, and enabling us to better understand patterns of consumer behaviour. Mobile data empowers us to understand people’s openness to messaging in specific areas, which might not be immediately obvious from the physical context, while social sentiment provides an extra dimension to that analysis. “In combination, these data sources can start to help us understand the emotional connections people have to particular places and the best times to reach them, for example in underground stations. People have a connection to their local underground station in a way that exceeds its practical purpose. For the marketing and communications industry there’s a clear opportunity, where if you use richer data to plan, you get a better result.”
- 5. Context and the consumer The proliferation of available data that can be used in OOH campaigns has been a revelation to the sector. Robust audience data and a standard audience currency are well served by Route in the UK, arguably the most sophisticated OOH audience research tool in the world. New data sources are now enabling advertisers to better understand who and where their audiences are, and most importantly, how to reach them. By layering different data points, advertisers can gain far richer insights into audience behaviour in specific locations. Often this behaviour is contrary to that which might be expected in terms of physical context, revealing the ‘hidden’ relevance for OOH locations. Data enables advertisers to achieve a new level of contextual relevance, placing the consumer at the centre of a campaign and enabling advertisers to deliver the right message, at the right time, in the right location. This in turn drives more efficient and effective OOH communications. Three data sources in particular now provide this greater depth of understanding and contextual relevance: • Real-time data: Live data – such as weather, temperature, travel, time of day – enables ads to react to the world around them in realtime, automatically activating or updating screens using live data or content. A great example is the Santander Cycles campaign, in which live maps across London showed commuters where the nearest cycle stations were located and how many bicycles were currently available in each. • Mobile data: Tracking the apps and sites people use when they are on their smartphones provides a powerful insight into their interests and behaviours, and therefore what sort of ads might work for them. By monitoring anonymised and aggregated data at Surbiton station, for example, Posterscope was able to determine that a high proportion of the audience in that location were visiting fashion websites and using fashion apps, and thus concluded that they would be more receptive to fashion ads. • Social tracking data: Social media activity can now be tracked to identify where people are when they are engaging in relevant conversations. Once hotspots for relevant conversations have been identified, OOH campaigns can be planned around those key target locations. An example is a recent campaign Posterscope worked on for the hit video game Fallout 4, in which ads were placed in locations where gamers were engaging in Twitter conversations. Using these data sources, ads can be made far more contextually relevant, but what’s important about this contextual revolution in OOH planning is that it’s just as relevant to classic OOH as it is to digital. It is universally true that using richer data delivers better results, and Posterscope has seen some spectacular increases of up to 200 per cent for brand KPIs vs. control areas. Inevitably, as useful data in the OOH space proliferates exponentially and becomes more accessible, the challenge and opportunity will be the ability to ingest this data in significant volumes and spot the interesting patterns and correlations. Nonetheless , Posterscope’s research indicates that marketing departments and agencies are not yet set up to take advantage of this new level of available data. Two thirds of marketers (66 per cent) believe an inability to harness big data is holding campaigns back from fully embracing the power of location, and 82 per cent of marketers say there’s a
- 6. disconnect between creatives and planning processes. Other challenges include the scale of digital inventory, which 72 per cent of marketers believe is a key barrier, while 71 per cent said privacy was a big challenge, which will be addressed in the following section. The industry needs to see greater consolidation. Presented with a large scope and quantity of disparate data, marketers are forced to use multiple providers for individual, specific tasks. This pushes up fees and makes the data difficult to analyse when put alongside different data from another provider. Ultimately clients want cost-effective, simple solutions that connect multiple data sources and turn them into actionable insights that can be used to fuel superior campaigns. Theo Theodore, General Manager EMEA, xAd: “Location isn’t just about proximity. It is about understanding people. Once you can start segmenting audiences, the message changes. It starts to be more about the path to purchase as opposed to just getting to someone where they are. Understanding that path to purchase and the different touchpoints, that’s really the power of location.” Harriet McDonald, Commercial Partnerships Lead, TfL: “At TfL, our data is open, so people can use it to create apps that they can then use. Citymapper are a class example of an organisation that now know probably far more about our customers than we do. They know exactly how they’re moving, and there will be people at Visa and MasterCard who know not only how they’re moving but also how they’re spending. The opportunity for TfL is actually how we create our own native apps where we layer on our own added value on top of that, so that people willingly give up their personal data if the value exchange is in their favour.” Michael Price, Marketing Director EMEA, Asics: “‘Big data’ is an overused term which actually doesn’t mean anything. You want the right data, not big data. As a client, I want the right stuff that helps me be better informed. Eventually, I think there will be greater consolidation back in agencies over again, because the current model is unsustain- able for clients. You get lots of different charge fees for different tasks, where actually you want less fees, greater quality, creativity, and better connection. Marketers need a simple solution that connects e-commerce, retail and marketing data in a simple way that adds value, and enables them to get to the right data.”
- 7. Theo Theodore, General Manager EMEA, xAd: “Location, particularly in combination with mobile, is an extremely powerful tool that can be used through what can be called a ‘real-world cookie’. Thinking about the web how people move through desktop, what advertisers are doing is looking at where they’ve been, where they are, where they might be going. When you start transferring that to the real world, and then look at the context of those locations, suddenly that becomes a very powerful platform that you can actually activate in the real world. In this context location becomes very, very powerful, and can actually be considered a category on its own next to social, search and other channels.” Privacy vs personalisation The proliferation of data represents a tremendous opportunity for the OOH sector, but it brings inherent risks as well. Consumers are now constantly connected through their mobile devices, interacting with sites, apps and social media that reveal more information about who they are, what they like and where they’re going than advertisers have ever had access to before. Using this data, advertisers can start to understand how people move through the physical world in almost the same way as people move through the digital world. It’s a digital footprint that can be read in a geographical context – a real world cookie. However, such power also brings with it great responsibility. Privacy remains top of the agenda for consumers, and advertisers ignore the issue at their peril. The Market Research Society found that 70 per cent of people believe the privacy of their personal data is more important than it was five or ten years ago. According to the DMA, concerns over privacy remain high, at 79 per cent, but this actually represents a gradual decline, down from 84 per cent in 2012. The DMA also found that the
- 8. majority of the population (55 per cent) are willing to share reasonable amounts of personal information in exchange for better services. Encouragingly, research conducted by Posterscope in 2016 shows that marketers understand this responsibility; 93 per cent said it is crucial to get the balance right between using consumer data and providing something of value. 69 per cent said privacy is a major consideration when it comes to location data, while 83 per cent recognise that consumers will only part with personal data if they receive something of value in exchange. The research shows that advertisers recognise the importance of treating consumer data with the respect it deserves. Consumers understand the value of their personal data, with the DMA’s research indicating that 52 per cent see their personal information as a way to command better deals from companies. There’s a clear value exchange, and advertisers understand that getting the balance right is crucial. Meeting this value exchange is a key creative challenge, which we’ll talk about further in the following section. Consumers are only willing to part with their data if they’re going to get something in exchange which provides them with value, and advertising campaigns need to reflect that. Max Lucas, Media Strategy Manager, Camelot: “There are clearly challenges and privacy issues that come with data. But there are ways to avoid the data privacy route, using internal data to be more relevant by location rather than player data. For example, from our internal data we know that on average there are about 144 different grants in every postcode that benefit from lottery funding. That enables us to match relevant good causes in different locations, and makes our advertising more relevant. “Likewise, retail data can provide valuable insights. We know that some stores are much more likely to attract players that come in for the occasional last-min- ute EuroMillions jackpot versus other retail outlets where people will go week in, week out to get their Lotto ticket. Using data in that way we’re able to use location to be more relevant without being too intrusive.”
- 9. Creative challenges: Location data and digital infrastructure present creatives with a challenge to integrate concept and strategy to maximise audience cut through. However, Posterscope’s research reveals that four in five (82 per cent) marketers believe that a communication disconnect between creatives and planners is the biggest barrier to successfully using location data in campaigns. 87 per cent of marketers believe better use of location data could help creative agencies establish a point of difference, but a knowledge gap in the creative community is perceived to prevent agencies from taking this leap. 85 per cent of marketers believe creatives need to better understand how to use location data in campaigns. The responsibility for this, however, lies with planners, as 83 per cent of marketers believe planners need to teach creatives the power of location data. In particular, creatives are exploring new ways to embrace how ‘programmatic creativity’ can extend the magic of a creative in an entirely new, impactful and relevant way at scale. There is a need to educate and inspire creative teams in agencies so they have a better understanding of the full capabilities of location data, and how it can be used at scale. The systems are now in place to implement campaigns that make innovative use of location data at scale, but creatives need to develop a better understanding of the power of location first. Understanding how it can be deployed will enable creative agencies to develop work that makes full use of the data and produce better, more impactful and more engaging campaigns as a result. Jim Thornton, Creative Director, VCCP: “I think the technological advance we’ve seen in recent years is just incredible. However, I think unless we’re careful we’ll find ourselves in a hideous race to the bottom, which is going to irritate and annoy the consumer to the point where they will start to actively reject. “It’s always been true that a bad ad is not just a bad ad, it is an incrementally worse ad every time you’re forced to watch it. Ultimately consumers start to actively reject brands if they pollute the consumers’ environment. The value exchange is where consumers are telling brands ‘reward me, abuse me, interest me, intrigue me, but don’t just shout at me and don’t batter me.’”
- 10. Michael Price, Marketing Director EMEA, Asics: “Data will never win over common sense. Data will tell me the more efficient way to buy, which means I get a load of six-sheets at a good price, yet for brand behaviour one massive poster can actually have a bigger impact. “People love great communication and great advertising, especially in the UK. I remember 25 years ago people liked the advertising more than they liked many of the TV programmes. It’s on the client and the agencies to come up with great stuff, because actually, over the years I think the quality has gone down. “Ultimately I hope everything doesn’t go digital. But that needs creative people to take action, because I think creativity is probably more powerful than the data. The data just helps us get that somewhere, but what we need are powerful creative agencies and departments that are willing to fight back.” Stewart Easterbrook, Chairman, Media IQ,: Most clients are focused on running their own businesses. They’re not data businesses. Now, businesses are realising there’s a massive opportunity to understand more about their customers because of the wealth of data and potential insight their marketing activities are generating, but they haven’t built themselves to be able to absorb that data, and act on it. Many businesses are now starting to draw interesting insights, but what’s important is not only how that gets plugged back into the marketing activity, but also how the business adapts to that better understanding of the customer.”
- 11. The future for location in OOH As with the geolocation industry, which in mobile ad spend alone is predicted to top €10 billion in the next five years, our relationship with mobile’s location capabilities in OOH continues to improve. But it’s not just the media industry that has a closer relationship with location – consumers do too. People are sharing their location information more than ever. Social check-in services have made us more aware of location, and CRM platforms are helping us earn loyalty points and rewards. In return, consumers expect more communications to be tailored to their location, and brands can benefit by understanding that increasing demand. Both Google and Instagram have reported that location has become a much stronger driver in delivering the right results and engagement with consumers. However, as this paper has explored, consumers increasingly understand the value of their personal data. As a result, advertisers need to be careful about the way in which they use it, to ensure that the value exchange they’re entering into meets consumers’ expectations by delivering something of high quality. Enhanced targeting powered by location as well as mobile, social and real-time data, enables ads to be more relevant, affecting and impactful than they’ve ever been before. But the power of location is only just beginning to be explored. There’s a tremendous opportunity for the outdoor advertising industry, not least in terms of profit. Posterscope’s research reveals that marketers believe location data can increase ROI for advertisers by up to 60 per cent, and on average marketers are planning to increase investment in location targeted campaigns by 45 per cent. However, there’s an education job for agencies and planners to do with clients first. There’s a huge creative opportunity that could be taken advantage of, with adequate buy-in from across the industry. Investment will increase alongside advances in infrastructure, particularly digital. Posterscope’s research reveals that a tipping point is coming in 3 years. The research also finds that marketers estimate that the out-of-home industry will be able to maximise location data by 2019. If the challenges detailed within this paper are overcome, the outdoor industry will seize the potential of location data, and start producing campaigns that not only meet, but exceed consumer expectations.
- 12. Jodie Stranger, President, Global Network Clients, Starcom MediaVest Group: “As we get so caught up in this digital programmatic world, you have to remember that out-of-home is the one medium that you cannot turn off, switch off, choose not to buy. It’s a powerful thing that will always be there. How we use technology and data to enhance that experience and open up and unlock new opportunities, whether that’s couponing, or virtual opportunities, or whatever that may be, that’s the opportunity.” Paddy Earnshaw, Chief Marketing Officer, Doddle: “We’re two-screening constantly now. So walking down the street you’re constantly viewing information. Proximity though, I’m not sure whether it’s to do with location or actually to do with your heart. So if the message is closer to your heart then clearly it’s going to work better. Serving something that touches on sentiment is so key. For clients, data is becoming part of our day-to-day business, but customers have to be willing not only to share their information, but also what matters to them.” Glen Wilson, Managing Director, Posterscope: “There’s a fantastic opportunity to put location to work today, but at the moment the outdoor industry is missing it. Three years is too long to wait for something that we could do now. It’s already started happening, but now we need creatives and planners to come together to ensure that campaigns can use location targeting techniques at scale, to deliver maximum impact, increased ROI and, ultimately, better campaigns.”