Location based advertising

It was not long ago, when a Russian, aspiring location based content provider stunned the industry with their service.

The concept was to provide location-based information via voiceover; their solution stayed in beta forever. Originally it was planned to be a tourist sightseeing escort, but later they realized how useful it is for shops. Still, their solution didn’t make it.

It’s a simple concept really difficult to realize. But this is something many are trying to do ever since, geofencing and location based advertising are one of the hottest topics right now.

From geofencing to behavior based advertisement

A few years ago the best way to distribute messages to the targeted audience based on their location was geofencing. It is basically creating a virtual fence around an object and targeting everyone entering it with the message-note: most of the time via it happens via text message. So you receiving a daily special offer of that restaurant you pass on your way to work was no coincidence.

Well, the principle is good here, but the execution is strongly restrained by targeting based on only GPS data, it is not that precise and it is not working indoors.

Location is only one component of location based advertising, it’s the shopping preferences and behavior that really makes this opportunity unique. What makes it an incredible business or new industry per se is the ability to gather and analyze that data in real time.

Some (including us) dare to say that this is going to be bigger than cookies for web… We know it sounds shocking, but potentially could be true.

So, who owns data?

There is no room for privacy, our cell carries all the information on where we have been, how much time we have spent there and what products and services we browsed for. The question is if mobile operators can or have to share it with third parties. The combination of location based information and behavioral data enables really edged out targeting and timing.

Targeting technology and all the necessary information is available to advertisers, but there is more than one step before they can kick off a campaign.
The above mentioned data is accessible to the vendors, developers, third party analytics companies and mobile operators. The first three are restricted to share any data, operators simply choose not to share or utilize them. In the Hungarian region Telekom Hungary is the only one utilizing this opportunity. This is going to change, especially if the EU passes regulation bills on the subject.

Using Wi-Fi for location based advertising

Users can also be identified when connected to a Wi-Fi network, the available targeting options aren’t nearly as satisfying as traditional location based advertising. Internet operators in the region share their network data with 3rd parties, this way advertisers gain the necessary information and target the users based on their location. Just like Madhouse did several times successfully.

These advertisement solutions gather the location-relevant information dynamically, making the advertisement message relevant for the user.

Our take on what’s next

Madhouse is an advocator for location based advertising, we know that both mobile operators and companies have to see the benefits and opportunities first. And then we can take it from there. But as always, we are thinking positively and hope that user behavior data will be available soon.
PS.: until then we are perfecting our location based advertising solution based on Wi-Fi data… Sign up for a demo.

September 11, 2015
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