Exploring the Location-Based Advertising Space

Digital marketers are investing heavily in social and performance marketing. The reason? As social ad impressions are growing at an average annual rate of 20%, there are better chances of targeting prospective customers efficiently. But the challenge posed by ‘Ad Fatigue’ is quite ominous as consumers might get tired of looking at the same ads across all digital platforms.

This challenge is even greater for the retail sector as there are already too many brands vying for the customers’ attention. As a result, marketers need to think out of the box, and this is where location-based advertising comes into the picture. An increasing number of consumers are responding to location-based ad campaigns as they are more relevant to their requirements. These campaigns offer a great solution for marketers as these ads are 20x more effective than any generic ad.

What is location-based advertising?

Location-based advertising is a geographically targeted marketing strategy where the focus is on creating customized messages for the users present in a specific location. This strategy enables businesses to target their customers at a personal level through a range of offline and online messaging channels depending on the physical location of the consumer. With the help of the location data, marketers can reach their target consumers based on certain qualifiers like vicinity to a store, ongoing events, and several others.

This strategy delivers effective results across customer lifecycles, ranging from a discovery about the product or service to long-term retention strategies. With the help of location-based advertising, marketers are able to create targeted offers for customer segments and improve customer experiences to deliver instant gratification. Location-based advertising is especially beneficial for local businesses where the location is the deciding factor for the consumer.

For instance, if a consumer is looking for a dry cleaner, the chances of selecting a store located near his or her location are extremely high. Likewise, restaurants will benefit from location-based advertising as their promotional offers will yield better results.

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Growth Factors for Location-Based Advertising

The location-based advertising industry is growing at a rapid pace, as it has crossed $56 billion as of 2022 and will touch $300 billion as of 2032. The rate of growth is expected to pick more faces in the coming years, making location-based advertising a great strategy for marketers. Some of the most important growth factors for location-based advertising are as follows: –

• Internet access: – Gone are the days when users had to pay exorbitant charges for using the internet. In most countries, broadband and mobile internet have become extremely cheap. As the internet is becoming more affordable every year, an increasing number of individuals have started using it regularly, taking internet penetration levels to great heights. As more consumers are accessing the internet, location-based advertising is offering better results for marketers as their default advertisement strategy.
• Smartphones and IoT: – Prices of smartphones in developing countries have been reducing continuously. Likewise, IoT-powered devices have become commonplace in most locations. As more consumers are spending multiple hours on their smartphones every day, location-based advertising is yielding better results for marketers. Companies can offer hyper-local offers for consumers and are able to enjoy better sales as a result.
• Personalized messages: – Location-based advertising lays emphasis on personalized messages being shared with the customers. These messages are based on the local needs of people living in each geographical location. As the products and services being offered cater to the needs of numerous consumers in a region, sales levels witness considerable growth over a period.
• Receptive audiences: – Many internet users use ad-blockers to save themselves from irrelevant ads. But this is not the case with location-based advertising. Research has also proven that customized ads get a better response as compared to generic ads. As the audiences are more receptive to localized ads, marketers are actively investing in them.

Revenue Forecast and Trends for Location-Based Advertising

As consumer behaviour is evolving at a rapid pace, marketers always need to be on their toes when it comes to advertising strategies. Staying on top of the latest trends is essential to formulate effective advertising campaigns. Some of the key trends and forecasts related to location-based advertising are as follows: –

• The CAGR of location-based advertising between 2022 to 2032 is pegged at 18.10%. Mobile location-based advertising will be the biggest growth driver for this sector.
• As per GSMA, there are 5.16 billion mobile phone users and 4.5 billion internet users across the world. This bodes well for the expansion of location-based advertising services.
• The total market value for the location-based advertising market is touted to touch $300 billion by 2032. Its present valuation is around $58 billion.
• Search-based advertising will be a great contributor to the development of location-based advertising. It will register a growth of around 17.3% during this period.
• In the US, location-based marketing services will touch $91 billion by 2032 with a CAGR of 18.3%.

Location-based advertising services are set to dominate the digital advertising landscape in the future. Companies will do well by investing in these services to expand their operations and target their customers efficiently.

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