Location-Based Advertising and Marketing - 2nd Edition

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Apr 15, 2013, 01:21 ET

NEW YORK, April 15, 2013 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:

Location-Based Advertising and Marketing – 2nd Edition

http://www.reportlinker.com/p01159671/Location-Based-Advertising-and-Marketing-–-2nd-Edition.html#utm_source=prnewswire&utm_medium=pr&utm_campaign=Advertising

Executive summary

The mobile channel is gradually strengthening its position in the marketing media mix as smartphones are becoming ubiquitous and drive mobile media usage. One of the key developments in mobile advertising is the increasing integration of location-sensitivity, which releases the full potential of the mobile channel. A notable divide can be made between static and real-time location-based advertising (LBA). Targeting by static variables involves using information which is part of user profiles such as place of residence and work. Real-time location targeting instead uses location information which is gathered when an ad is delivered to a mobile user. Such LBA campaigns leverage the same type of technologies to determine user location as other location-based services (LBS). Common methods include GPS, Cell-ID and Wi-Fi positioning which are all based on real-time information.

Targeting by location in combination with other contextual and behavioural segmentation greatly enhances the relevance of mobile advertising. It has been demonstrated that location targeted ads generate considerably higher returns than conventional mobile advertising. The associated eCPM and CTR levels are several times higher. Berg Insight estimates that the total global value of the real-time mobile LBA market was € 526 million in 2012, representing 9.1 percent of the total mobile ad spend. Growing at a compound annual growth rate of 65.2 percent, the real-time LBA market is forecasted to be worth € 6.5 billion in 2017, corresponding to 32.8 percent of all mobile advertising and marketing. This means that location-based advertising and marketing will represent around 5 percent of digital advertising, or more than 1 percent of the total global ad spend for all media. Asia-Pacific is estimated to be the largest LBA market in 2017, followed by North America and Europe.

Key drivers for LBA include the growing adoption of both outdoor and indoor location technologies, as well as the increasing consumer acceptance of LBS in general. Local advertising is further a major market and LBA opens up the mobile channel for new advertisers such as local merchants. Big-box retailers can leverage LBA to combat both online and physical competitors. The fact that LBA has higher performance has moreover translated into premium rates. The main barriers to adoption are related to the inherently limited reach of LBA which acts as a mental hurdle for advertisers. Education of advertisers and new methods for campaign performance evaluation are thus called for. Privacy issues can further not be ignored, but can be beneficially handled by privacy control options beyond simple opt-in mechanisms. The demand for geo-targeting remains comparably limited, but is bound to increase given the proven results such campaigns generate.

The LBA value chain is still forming and there are a large number of players involved in the ecosystem. The industry remains fragmented and far from mature. Many different companies are involved, ranging from LBA specialists such as Verve, Placecast and xAd, to LBS players including Telmap, Telenav and Waze, and operators such as AT&T, SFR and the new UK joint venture Weve. There is furthermore an abundance of location-aware applications and media which serve geo-targeted ads, with examples such as Foursquare, Shopkick and SCVNGR. Other stakeholders include coupons and deals providers including Vouchercloud, Yowza!! and COUPIES, search solutions such as Hibu and Yelp, and proximity marketing providers like Proxama, NeoMedia and Scanbuy. A number of traditional mobile advertising players are also active in the LBA space, for example Millennial Media, Madvertise and Nexage, as well as major digital and telecom players such as Google, Apple and Facebook.

There are a number of key takeaways from the current trends in LBA. It has been established that geo-targeting improves the performance of mobile marketing and greater shares of ad budgets are devoted to LBA. High-precision real-time geo-targeting is still sparsely used, and rightly so as most campaigns do not require an accuracy of a few meters. Hyper-local LBA is nevertheless becoming more common. Location is furthermore only one of many valuable targeting variables and marketers must also strive to leverage other contextual and behavioural data. It is then crucial to ensure sound opt-in procedures and individual privacy measures for consumers. Marketing methods such as conquesting and combating of showrooming can further leverage location-based advertising. Current important high-volume LBA formats include mobile search and SMS campaigns. Berg Insight anticipates that geotargeting gradually will become ubiquitous and available across the entire mobile channel.

This report will allow you to:

• Identify tomorrow's most profitable LBA opportunities in the mobile space.
• Understand the fundamentals of the ad-based mobile media revenue models.
• Recognise the key enablers of growth in the LBA market.
• Comprehend the relative importance of digital channels compared to other advertising media.
• Learn about the experiences of LBA campaigns by top global brands.
• Profit from valuable insights about LBA business models.

This report answers the following questions:

• In what ways can location technology improve the relevancy of mobile advertising?
• What are the experiences from mobile LBA campaigns so far?
• How should mobile LBA be integrated in the marketing media mix?
• Which categories of companies can leverage mobile locationbased advertising?
• Which are the LBA specialists that stand out of the crowd?
• How are mobile operators such as AT&T, Telefónica and SFR approaching LBA?
• How are traditional mobile advertising players and major digital and telecom players positioning themselves in this market?
• How well suited for LBA are different existing and future mobile media channels?
• Which are the main drivers and barriers affecting the mobile LBA market?

Who should buy this report?

Location-Based Advertising and Marketing is the foremost source of information about the status, future trends and technology developments on this market. Whether you are a telecom vendor, mobile operator, advertising agency, investor, consultant or application developer, you will gain valuable insights from our in-depth research.

Table of Contents

Table of Contents i
List of Figures vii
Executive summary 1

1 Advertising and the mobile channel 3

1.1 Advertising and digital media 3
1.1.1 The marketing and advertising industry 3
1.1.2 The Internet media channel 6
1.1.3 The mobile media channel 7
1.2 Mobile advertising and marketing 10
1.2.1 The mobile handset as an advertising platform 11
1.2.2 Advertising on the mobile handset 13
1.2.3 The mobile advertising ecosystem 15
1.3 Mobile media channels and formats 16
1.3.1 Messaging 16
1.3.2 Mobile web 20
1.3.3 Mobile applications 25
1.4 Mobile marketing industry overview 30
1.4.1 Factors influencing the potential market value of mobile advertising 31
1.4.2 Current state and future trends 31

2 Mobile location technologies and services 33

2.1 Mobile network location architectures and platforms 33
2.1.1 Location architecture for GSM/UMTS networks 34
2.1.2 Location architecture for LTE networks 35
2.1.3 Control Plane and User Plane location platforms 36
2.1.4 Handset client and probe-based location platforms 37
2.2 Mobile location technologies and methods 38
2.2.1 Cell-ID 38
2.2.2 Enhanced Cell-ID 40
2.2.3 RF Pattern Matching 40
2.2.4 E-OTD, OTDOA and U-TDOA 40
2.2.5 GNSS: GPS, GLONASS, Galileo and Compass 41
2.2.6 Bluetooth and Wi-Fi positioning 42
2.2.7 Hybrid, mixed mode and indoor location technologies 43
2.2.8 Comparison of location technologies 44
2.3 Overview of mobile location-based services 48
2.3.1 Mapping and navigation 49
2.3.2 Local search and information 51
2.3.3 Social networking and entertainment 51
2.3.4 Recreation and fitness 52
2.3.5 Family and people locator services 53
2.3.6 Mobile resource management 53

3 Mobile location-based advertising and marketing 55

3.1 Definitions and variants of LBA 55
3.1.1 Static versus real-time location targeting 55
3.1.2 Push and pull LBA 58
3.1.3 LBA formats 59
3.2 Market receptiveness 62
3.2.1 Adoption patterns among brands and merchants 63
3.2.2 Outcomes of different LBA strategies 64
3.2.3 Consumer attitudes 67
3.2.4 Privacy concerns 70
3.3 Case studies 71
3.3.1 PlaceIQ and Medialets deliver location-aware rich media ads for Meguiar 71
3.3.2 Kiehl's leverages Placecast's technology to drive store visits 72
3.3.3 Coffee shops in event area promoted in The Weather Channel apps 72
3.3.4 Days Inn advertises locally in Poynt application 73
3.3.5 In-app advertising promotes eco-friendly BMW car events 73
3.3.6 LBS application Gettings promoted using Madvertise's LBA solution 73
3.3.7 Sherlock Holmes movie marketed using Bluetooth solution from BLIP 74
3.3.8 French Leboncoin monetises inventory using Admoove's LBA network 74
3.3.9 MINI's location-based reality game generates a PR value of € 1.2 million 75
3.3.10 L'Oréal and Superdrug leverage O2 More's geo-targeted SMS program 76
3.3.11 Angry Birds campaigns mix real-world and digital components 76
3.3.12 Young people encouraged to vote through NFC-enabled OOH campaign 77
3.3.13 P&G's Charmin eases public restroom finding with SitOrSquat app 77

4 Market forecasts and trends 79

4.1 LBA industry analysis 79
4.1.1 Classification of LBA offerings 79
4.1.2 LBA specialists 80
4.1.3 Mobile operators 81
4.1.4 LBS and navigation providers 82
4.1.5 Location-aware applications and media 83
4.1.6 Mobile coupons and deals providers 83
4.1.7 Mobile search providers 84
4.1.8 Proximity marketing providers 85
4.1.9 Traditional mobile advertising players 85
4.1.10 Major digital and telecom players 86
4.1.11 Industry associations 86
4.1.12 Mergers and acquisitions 88
4.2 LBA landscape trends 90
4.2.1 Drivers for success 90
4.2.2 Barriers to adoption 92
4.2.3 Overcoming the barriers 94
4.3 Market forecasts 96
4.3.1 Total, digital and mobile advertising market value forecasts 96
4.3.2 LBA market value forecast 98
4.4 Final conclusions 100
4.4.1 Location filtering improves the effectiveness of mobile marketing campaigns 100
4.4.2 Steadily increasing shares of ad budgets devoted to LBA 100
4.4.3 Real-time hyper-local geo-targeting is sparsely used 101
4.4.4 Location is only one of many valuable targeting variables 101
4.4.5 Mobile search and SMS campaigns are important high-volume LBA formats 102
4.4.6 LBA offers new possibilities for all categories of advertisers 102
4.4.7 Location targeting will eventually become ubiquitous 103

5 Company profiles and strategies 105

5.1 LBA specialists 106
5.1.1 AdMoove 106
5.1.2 CityGrid Media 107
5.1.3 LEMON Mobile 108
5.1.4 Placecast 110
5.1.5 Verve Mobile 112
5.1.6 WHERE/PayPal Media Network 114
5.1.7 xAd 115
5.1.8 Xtify 117
5.1.9 YOOSE 119
5.2 Mobile operators 120
5.2.1 AT&T Mobility 120
5.2.2 Orange Group 123
5.2.3 SFR 125
5.2.4 Telefónica Group 126
5.2.5 Verizon Wireless 128
5.2.6 Weve – mobile operator joint venture in the UK 129
5.3 LBS and navigation providers 130
5.3.1 Appello Systems 131
5.3.2 Intersec 132
5.3.3 Telenav 135
5.3.4 Telenity 137
5.3.5 Telmap 139
5.3.6 TomTom 141
5.3.7 Waze 143
5.4 Location-aware applications and media 146
5.4.1 Badoo 146
5.4.2 Foursquare 147
5.4.3 Gbanga 149
5.4.4 SCVNGR/LevelUp 150
5.4.5 Shopkick 152
5.5 Mobile coupons and deals providers 153
5.5.1 COUPIES 154
5.5.2 Groupon 155
5.5.3 Vouchercloud 157
5.5.4 YourbanDeals 157
5.5.5 Yowza!! 159
5.6 Mobile search providers 160
5.6.1 Hibu 160
5.6.2 Mobile Commerce 162
5.6.3 Poynt 163
5.6.4 Yelp and Qype 164
5.7 Proximity marketing providers 165
5.7.1 NeoMedia 166
5.7.2 Proxama 166
5.7.3 Proximus Mobility 168
5.7.4 Qwikker 169
5.7.5 Scanbuy 171
5.8 Traditional mobile advertising players 172
5.8.1 InMobi 172
5.8.2 Jumptap 174
5.8.3 Madvertise 175
5.8.4 Millennial Media 177
5.8.5 Nexage 178
5.8.6 Sofialys 180
5.9 Major digital and telecom players 182
5.9.1 Apple 182
5.9.2 Facebook 184
5.9.3 Google 186
5.9.4 Microsoft 188
5.9.5 Nokia 190
5.9.6 Yahoo! 193

Glossary 197

List of Figures

Figure 1.1: Global advertisement expenditure by media (World 2011) 4
Figure 1.2: Top 20 advertisers (World 2010) 5
Figure 1.3: Online advertisement expenditure by region (World 2011) 7
Figure 1.4: Mobile subscriptions by region (World Q2-2012) 8
Figure 1.5: Stakeholders in the mobile marketing value chain 15
Figure 1.6: SMS ads – number of receivers and response rates (EU5 July 2011) 17
Figure 2.1: Location architecture overview 34
Figure 2.2: Cellular frequency reuse pattern 38
Figure 2.3: Cell-ID location methods 39
Figure 2.4: Performance and limiting factors for network-based location technologies 45
Figure 2.5: Performance and limiting factors for hybrid location technologies 47
Figure 2.6: Examples of LBS apps and services by active users (World 2012) 49
Figure 3.1: Examples of location granularities suitable for LBA 56
Figure 4.1: Categorisation of LBA players 80
Figure 4.2: Acquisitions in the LBA ecosystem (2011–2013) 89
Figure 4.3: Total, digital and mobile ad revenues by region (World 2011–2017) 97
Figure 4.4: LBA revenues and forecasts by region (World 2011–2017) 99
Figure 5.1: Overview of LBA industry players 105
Figure 5.2: European operator offerings powered by Appello Systems (December 2012) 132
Figure 5.3: North American operator offerings powered by Telenav (December 2012) 136
Figure 5.4: Waze user interface showing expanded business detail 145
Figure 5.5: SCVNGR LevelUp offering and FTUB white-label payment solution 151
Figure 5.6: YourbanDeals user interface 158