Location is Back

I was chairing a panel on Monday at W2Forum’s excellent Mobile Search and Advertising Forum in London. It was great to catch up with many old friends and meet a bunch of new people too.

One of the curiosities of the conference was that Location Based Marketing kept highjacking the day, despite enjoying really very little progress in the last 10 years or so and not even being on the conference agenda.

But the audience was clearly fascinated and questions kept returning to the topic.

There are two basic problems to be resolved with LBM.

First is the technology. There’s lots of work arounds these days, but we’re still quite a long way from an obvious solution, either provided by the mobile operators or a solution that bypasses them altogether. Unfortunately, I think the operators have sat on their laurels for too long and the eventual solution that will emerge simply won’t use their feeds. Another lost opportunity, but I’d love to be proved wrong on this.

The most promising solutions that I’ve seen are mapping applications, from players like Google and Nokia. One of the issues with LBM is how you deliver ads in a useful way and popping up an ad (unobtrusively) when people are browsing a map seems a great way of doing it. Clearly, it also depends on the content of the ad – it needs to add value somehow and be relevant and targeted.

There’s a lot more to the ad execution and my free White Paper on this area covers lots of thoughts about how ads might work. Ask me for a copy.

But the biggest challenge isn’t really technology, it’s the sales and logistics of sourcing the ads in the first place. Even for a relatively small market, such as the UK, you need a very high quantity of ads available to cater for all areas and time slots – and that’s before you even think about relevancy issues. In other words, you might get an ad for a women’s clothing store, but even basic targeting means that you can’t display that to males.

If you do some rough maths, you’ll see what I mean. You wouldn’t do it quite this way, but let’s say we have 10,000 areas we want to cover – that’s about 10,000 clusters of 2,700 houses in the UK as something to get your head round. Assume we make ads available 10 hours a day in 10 time slots. We have basic male/female targeting and ignore that in the real world, we’d need more ads to start real targeting.

That means 54,000 ads available per day, just to have one ad per cluster per person.

Of course, many of the ads could be the same, but it does start to show what kind of numbers are involved. And all these ads need to be sourced from somewhere by a salesforce, then stored in a very large database, which needs to programmed to be able to serve the right ad to the right person at the right time. This isn’t a trivial task.

Despite these challenges, many people are clearly excited about this area and this bodes will for its future.

My panel (representing Google, ex-Yell, Vodafone and Tanla Mobile) said this kind of scenario is 3 – 5 years away, when they were pushed into an answer. I think they’re probably right.

Of course, it might be that this dream is never realised. Privacy regulation, for a start, could be the Black Swan that settles on the LBM nest and kills it before it’s even seriously begun.

Let’s hope not though. If enough people feel passionate enough about it, they’ll certainly find a way to make it happen. Just please don’t underestimate what’s involved if you’re going to try and make something happen in this area.

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