As marketers become more sophisticated in using geolocation for advertising, research is indicating that more targeted—that is to say, closer—is not always better.
Research from Eyeview spanning more than a year-long period from Q2 2012 to Q3 2013 showed that, for auto brands, geotargeted ads for dealers within 15 miles of the mobile device being served tended to do significantly better than those served to users farther away. The closer a user was to a dealer when the targeted ad was served, the more likely, by and large, that user was to visit the brand’s website in the next month.
At the same time, however, lower rates of brand site visits for those farther away do not necessarily indicate that dealers are wasting money reaching out to people outside the traditional distance they might target. Those mobile users that do respond to such ads can be retargeted with price incentives or other offers to entice them to travel a bit farther to buy.
And results vary by industry. Research from JiWire on the performance of CPG ads targeted toward people near or in a store did best at middle distances, between 1 and 5 miles. Ads served to people already in stores actually caused a decline in performance, though not as strong as the one seen in ads served more than 10 miles away.
These results are not surprising—consumers already shopping in a store have little incentive to click on an ad for the same store, unless a deal is offered. And generally, shoppers are less likely to travel long distances to buy toothpaste and laundry detergent, whereas high-touch purchases like autos may require significant comparison shopping and trips to many dealers.