MappingTheWeb //

[The Future of Location-Based Advertising] - Back on February 6th of this year, Gavin asked:

“I am interested in what you think about location-based advertising, and its prominence going forward? Do you think it will succeed?”

Anyone who reads my blog on a regular basis knows how much I love the concept of “local”. I see many benefits, both for the user and the company. That in mind, my answer to the stated question becomes obvious. I think that location-based advertising will play a key role in the evolution of the advertising space.

It seems like a lot of companies are trying to re-invent the wheel nowadays. Many are looking to capitalize on ‘the next big thing’ in advertising. Well, they’ll be happy to know it’s already here and I just saved them millions in research costs (thank me later). Location-based advertising, though nothing revolutionary, is both pertinent to the viewer and lucrative for the company. Just think about it for a second. Instead of viewing ads for whatever online shop or site, the viewer is subject to an ad from a business in their region. If further segmentation can be exploited, the ad becomes even more pertinent to the reader. This usually translates to higher conversions for the company as well. It’s really a win-win situation. The downside for the company is a (potentially) pricy CPM. In addition, inventory levels may easily be maximized given a strict set of constraints.

In any case, I see more companies entering this advertising vertical and others expanding into it. From the other side, I see more advertisers leveraging geographic-based advertising to target potential customers. Internet penetration rates are now at a point where inventory levels in a given region make a case for local advertising. This potential supply is lucrative and should be capitalized upon. Mark my word, local is here to stay.