Step by step, programmatic has been spreading throughout the corners of digital marketing, journeying from buzzword to a way of doing business as usual. Its impact on advertising has been crucial, reshaping the way digital inventory is bought and sold. With its expansion into the mobile ecosystem, many have already taken things further, embracing a programmatic approach through mobile location marketing.

Mobiles are a tech staple and as a platform they have the potential to reach masses. Programmatic can use this to connect offline data with online behaviour, allowing campaign managers to really get an insight into who their audience is and engage them in more personalised, relevant efforts.

In this smartphone-dominated world, mobile advertising booms by the year and programmatic shows no signs of slowing down either. Together, it’s a highly exciting mix, as the first testers are finding out.

Next big thing

Location-based programmatic can tackle advertising head-on, reaching consumers as they go about their daily lives; out there, in the real world.

Data from Forrester shows that smartphones influenced more than $1 trillion of purchases, both online and offline, in the last year alone. Plenty of retailers are aware that product research is a given when buying online, but it’s interesting to see that, according to the same source, 70% of shoppers compare prices or check out reviews on their phones before deciding whether to buy an item while in a physical store.

Imran Khan, the head of programmatic at location advertising specialist xAd, believes mobile programmatic “acts as a real-world cookie based on the places you go”, akin to the way digital cookies measure behaviour based on the websites you visit. Backed up by the geographical information retrieved from people with their location data switched on, marketers can build a more precise picture of consumers based on their real-world movements.

Mobile, programmatic and location-based technology can make for a game-changing combination for media buyers looking to get the most out of strategies like proximity targeting. And for those wondering just how it works, there are a number of different techniques to reach customers.

A popular strategy within campaigns is prospecting. It helps to reach people in real time in “locations that matter” by putting ads in front of users who might not know the brand. Prospecting campaigns are used to build awareness of a brand, its products or services.

Retargeting has become a buzzword used across different marketing categories and it still finds a use within programmatic. This technique helps to re-engage with past buyers who visited a particular location. The aim is to encourage them to purchase again with an attractive offer.

Store visitation targets people in real time to drive them into a particular shop, while audience targeting is a way of addressing segments of consumers based on the multiple places they visit.

Given the ubiquity of programmatic, there is a range of possibilities for where that messaging goes. One of the most popular is the app, which – with location services enabled – can fire out notifications once the person enters a certain area.

Marketers know about the potential in programmatic and its use in adding efficiency to mobile. They also recognise its targeting accuracy, speed and the opportunity to strengthen loyalty. Mobile is one of the most effective online-to-offline connectors, directly reaching consumers while they’re on the move. And as marketers learn to harness its full potential, location-based programmatic is fast becoming the next big thing.

Khan states: “Despite the growth in e-commerce, 90% of commerce happens offline – in brick-and-mortar stores, with 80% of transactions occurring in the spur of the moment.

“Along with the importance of offline commerce, the shift in media consumption is another major trend. Most of our media consumption is happening in mobile devices and in-app. Cookies, which have commonly been used by the digital advertising community to track user behaviour, do not work in-app, therefore location effectively helps you address these two growing trends.”

Fighting challenges

With all the promise that programmatic brings, it’s hard to see what’s stopping marketers from taking what they already do with programmatic to the next level. One of the key challenges is, ironically, location.

“Location is very difficult, with thousands of address changes occurring in the UK on a daily basis,” says Khan.

“The primary challenges surround the accuracy and precision of data signals, as well as the understanding of the quality and integrity of data in the real world. Solving these challenges is crucial in using location effectively.”

This is not, however, to say these limitations are insurmountable. XAd is solving certain issues using blueprint technology to draw outlines of buildings and weighted signals to verify a location and reach customers with precision.

Another big challenge is a lack of education. A study released by IAB earlier this year revealed that half of  marketers use programmatic for buying mobile inventory. However, 44% admitted they had little or no knowledge of it.

Education will be crucial for marketers looking to explore this space, particularly because 79% admit that mobile advertising is a significant element of their overall marketing strategy.

The research also revealed that investment in mobile will increase within the next couple of years, although a lack of funds is currently a real challenge for nearly one in three of those surveyed. It also  highlighted barriers such as difficulties in tracking and restraints on creativity.

Like any burgeoning technology, programmatic faces its challenges in the mobile ecosystem. How and when these will be resolved is yet to be seen, but one thing is for certain: programmatic is not just a hot trend, but a true game changer both online and offline.

Imran Khan will be presenting a session on ‘Grabbing Local Audiences with a Programmatic Approach’ at PMI: Europe next month. Within this, Khan will share his tips for the campaign preparation phase and what he learnt from his own group’s work with KFC.