Location targetted advertising - not a simple holy grail

There is much excitement in mobile circles about the potential, and risks associated with location based services.

The W3C has a Geolocation API which will appear for the first time in a mobile device on Friday when Apple release mobile Safari 3.0 on the iPhone. Google will then immediately use this in Latitude on the iPhone - a location based application.

Many people are actively seeking interesting and novel ways to use the ever growing number of devices that have location information. Traditionally the main value here has gone to the Portable Navigation Device manufacturers - Garmin, Tom Tom and others. Whenever location is mentioned in mobile it's normally a short time until "advertising" is mentioned.

A simple example is something like:

"Imagine if your local dentist could advertise over internet/mobile to only people in their local area - what would the market potential be?"

This is a seductive concept - however it's exactly the business model that is the stalwart of Yellow Pages, and has been a core market for local newspapers for years.

Local newspapers across the UK are closing and being consolidated into larger areas, and large local advertising businesses such as Yell Group plc have underperformed the market over the last few years.

The reality of both of these businesses is that they are need to sell to very large numbers of small & medium sized local businesses, who will deliver small numbers of adverts to small numbers of people.

The internet has been successful in connecting large numbers of businesses with large numbers of people.

When you consider the options for location based advertising you have to look at the range of advertising opportunities presented to a local business - some simple examples are:

• Poster displays in local sites
• Leafletting local households
• Sponsorship of local events

All of which have more reach than any form of internet or mobile location based advertising.

For location targetted digital advertising to succeed it needs to achieve two key things that traditional forms of advertising have not achieved

1. Significant cost reductions compared to posters/leaflets/classified
2. Time based targetting - a different advert at 10pm to 10am

Neither of these are easy to achieve - as the demise of local newspapers and the challenges facing Classified advertisers has demonstrated.

Comments

[Rog]

Obviously, we couldn't agree more.