Tips on How Geotargeting Can Reduce Ad Spend and Increase ROI
Geography and location have played a role in marketing for many years from advertising campaigns on local radio and television stations to displaying a restaurant billboard 6 miles ahead of the interstate exit, marketers have been utilizing the context of geotargeting for years.
With the proliferation of technology over the past several years, geotargeting has become mainstream in marketing as more precise tools and technologies have enabled businesses to conveniently reach their audiences in their homes, at work and in the palm of their hands. However, marketers often forget about the subtle nuances that make geotargeted marketing truly effective. Some believe targeting a simple radius around their store is enough. However, there are many geographical factors that play a role in the effectiveness of a geotargeted marketing campaign, whether you are targeting customers with digital or direct marketing.
When considering a geographical area to focus your marketing efforts on, it is important to think about the competitive landscape in your area. For example, a grocery chain may want to reconsider marketing to customers who must drive past three or more competitors to reach their store. Even if a customer decides to redeem an offer at that store, the likelihood of them becoming a loyal customer decreases for every competitor they pass during their drive. However, for more specialized industries like furniture or electronics, customers may be willing to drive past competitors because your price points fit their budget.
2. Travel Time
With consumers paying a premium for convenience in today’s world, travel time is an important consideration when evaluating your geotargeting strategies. As consumers have become more accustomed to convenient shopping, like same-day shipping, businesses are finding much higher response rates from consumers who are within a 5-7-minute drive from a business. Although, while you might assume your store is under a ten minute drive for everyone within a 3 mile radius, it may in fact take consumers vastly different amounts of time to reach your store depending on traffic, number of stoplights, highway versus city streets, etc. Think about the last time you got takeout for lunch during your workday. With most people having between 30 and 60 minutes for a lunch break, our research has shown that consumers respond most to marketing campaigns focused on consumers within a 5-7-minute drive.
A better practice might in fact be to create a custom trade area based on the actual amount of time it takes to drive to your store from anywhere within your desired radius. Below is an example of this using DBM Group’s proprietary geotargeting tool:
3. Natural Barriers
Every business has unique geographical features that should be considered when identifying the best trade areas to focus marketing efforts on. For some businesses, it could be a body of water, a bridge or highway that acts as a natural “psychological barrier,” meaning customers rarely go out of their way to drive past these barriers when they can go to a on their side of the feature. These barriers also include nearby stadiums or national landmarks that residents avoid due to heavy traffic. Or in urban locations, there may be factors like one-way streets, cemeteries and railways that can sway a consumer shopping or dining decision. Using DBM Group’s proprietary geotargeting tool we are able to draw custom maps around a given location to know exactly how many households and businesses are within these geographically boundaries:
4. Delivery Radius
We’ve previously mentioned consumers becoming accustomed to convenient shopping and one way to offer tremendous value to your customers is by offering and promoting delivery services. That being said, it’s important to only market to consumers within your delivery boundaries. The consumer being sent marketing promotions for a service they cannot use can become disgruntled with a business for inadequate marketing. Imagine how frustrating a customer might find it to receive an offer promoting delivery and have already decided what they want to eat, only to find out that they are not eligible for service in their area.
When considering an agency to implement geotargeting, choose one who has the experience and technology to take these practices and strategies and create more effective marketing campaigns.
Learn more in our follow up blog, Geotargeting Best Practices: CTA and Technology.