The promise of hyperlocal: opportunities for publishers and developers

1 Summary

Advertisers have long been enamored with the promise of location-based advertising (LBA). To date, however, national advertisers’ and agencies’ enthusiasm has been tempered by fragmented audiences, and advertisers and agencies have been slow to embrace LBA. Capitalizing on the growing adoption and use of smartphones and the explosion of flash sales and local offers, local mobile ad networks are creating seismic shifts in mobile advertising. Leading analysts are projecting that mobile ad spending will increase by more than five times between 2011 and 2015. Small- and medium- sized businesses (SMBs) in particular are contributing to the extraordinary growth, especially in hyperlocal mobile (HyLoMo) advertising, which we define as ads targeted to individuals in specific, relatively homogeneous locations (latitude and longitude, neighborhoods, zip codes, and so on).

HyLoMo advertising represents an important new asset for mobile publishers and app developers. Executed properly, HyLoMo delivers more-relevant ads to audiences and, due to the proximity of opportunities, generates higher levels of engagement. Compared to ads that are not geotargeted, HyLoMo ads are producing higher click- through rates and are yielding higher effective CPMs (eCPMs) for publishers and developers. With the aid of local mobile ad networks, advertisers, publishers and developers are integrating HyLoMo into their strategies and reaping the benefits.

Intended for mobile publishers and developers as well as industry audiences interested in the topic, this report outlines factors contributing to the rapid growth of HyLoMo advertising, describes results that are being achieved, and summarizes key criteria to consider in comparing and evaluating local mobile ad networks.

Next: Introduction