Location-based Advertising Needs to Scale to Get the Attention of Wireless Carriers #ctiaw2011
A group of industry executives gathered to discuss the prospects for location-based advertising and it truly seemed like they had nothing new to report. Alistar Goodman of Placecast, who was been around this business for a long time, identified both a business model problem for his company and a truism of the industry: scale. The applications are only now reaching enough handsets that it is making a difference to retailers…and carriers. Placecast's ShopAlerts now has 2 million users. That's a lot for some; perhaps a bit under the radar for carriers to take notice. Placecast is launching with AT&T and it’s the first time an operator has offered solutions to their clients. Goodman said that what brands really care about is to be able to do this with millions of users and do it in real time and not intrusive. Currently ShopAlerts is a SMS-based notification, not a true application like we see from Shopkick.
The moderator of the session, Linda Barabee, Research Director, Connected Intelligence of the NDP Group asked a very basic question and somewhat obvious question about where the industry stood at this time. Indeed, everyone believes that it's early days but some of the panelists were able to put their finger on how to improve the user experience and consequently drive revenue to the retailer.
Mort Greenberg, Head of Sales, Americas Advertising for NAVTEQ said that, if you can tell someone how close they are to a location it should improve their ability to click on an ad. You have to provide them an offer and a call to action and when you blend in location, this will improve the click through ratio on the ad. Andrew Osis, Poynt's president and CEO said "It's not just location; its about context." Osis indicated that if you can discern things from individual users and their habits then you can engage them. Goodman said that people will share their data but get concerned when that data is "broadcast" so his service is double opt-in … you opt into the service and then opt in to share the data.
However, the main take away from this session was that the panel believes that the merchants need to be educated about building their advertising plan and how location-based advertising will help them drive revenue.