Evolving Advertising: Geofencing

We are all familiar with advertisements in the form of pop-ups, banners, and posts, but there is a new type of target advertising that many companies are now taking advantage of.

The ads you commonly see on websites and social media come from digital cookies in your computer that track your usage and the sites you visit. This type of targeting is effective, but not nearly as accurate as new forms known as geofencing. According to Data-Dynamix, a company known for their digital marketing expertise, geofencing is “…a location-based digital marketing tool that lets marketers send messages to smartphone users in a defined geographic area.” For example, if you go to shop at the mall, stores within that mall can send you ads and promotions because they know you are there via your location.

“Digital marketers can take the gps capabilities to feed ads to people who are geographically ready to make sales decisions.”

The increase in geofencing’s popularity is directly correlated with the transition to social media usage on mobile devices. Although geofencing is not strictly mobile, because Apple iBeacons are in all of their devices, it is used for the majority.

iBeacons are Apple‘s bluetooth beacon technology, and are extremely accurate as they give off a 10 centimeter radius from your iPhone. Fast Company looks at iBeacons used for advertising, but also its use in social apps and apps for your home: “Innovative developers are applying Apple’s iBeacons to improve our social lives, make our smartphones more intuitive, and save us money on electric bills.”

When looking at what geofencing does for advertisers and companies economically, it has proven to increased their revenues since they implemented it. It is more cost efficient than print ads, and are simultaneously more effective. The Wall Street Journal‘s article “Geofencing: Can Texting Save Stores?” looks at the correlation between mobile device users and its influence on their shopping habits. 15% of consumers check competitors prices while in store, 8% use their phones to “check in” to stores, and 7% use their devices to learn about in store promotions or events. Although the percentages aren’t high, they also accumulated over 3.4 billion mobile coupon uses over the year.

Geofencing is a new wave of personalized and unavoidable advertising. Since its increase in usage, both consumers and companies have seemed to benefit.

 

Sources:

Apple Developer: iBeacon Technology

Data Dynamix

Fast Company: Apple iBeacon

Mass Communication: John Vivian

WSJ: Geofencing

 

Advertising as a Key Driver to the Economy

We all hate having to watch a 30 second ad before a Youtube video, or a couple ads while streaming shows through Netflix or Hulu, but these advertisements contribute to the $5.8 trillion in overall consumer sales that are attributed to the advertising industry.

ANA, the Association of National Advertisers, commissioned a report to prove the significance of advertising to the nation’s economy and the projections for its future contributions. The image below reflects their findings:

Findings & Projections

 

As shown, advertising plays a huge role in the US’s economy both directly and indirectly.

The increase in advertising has lead to a promising symbiotic relationship between producers, consumers, and the advertising industry. All parts of the equation benefit from each other’s success.

Advertising Connections

John Vivian, in The Media of Mass Communication, also recognizes the importance of advertising, stating that it is “essential to a prosperous society.”

Advertising is vital in a consumer economy. Without it people would have a hard time even knowing what products and services are available. Advertising, in fact, is essential to a prosperous society. Advertising also is the financial basis of important contemporary mass media.

The most effective media reach, or the size of the audience exposed to an advertisement through a certain medium, has shifted over time. To track this shift, and provide the best media plans for media buyers, organizations like The Audit Bureau of Circulations and companies like Nielson monitor audience response and supply reliable information.

The knowledge of advertising’s benefits, its impact on the economy, and the strategies behind it are important when looking at the economics of media. Advertising has become a major player in the creation and perception of media, and is influential to the consumer as well as the industry.

Like both the ANA and John Vivian agree, advertising has proven to be a key driver and contributor in our economy.

 

Sources:

Association of National Advertisers 

Media of Mass Communication

Photo featured

Why Advertisers Choose Social Media

Since social media’s popularity increase, it has played a large role in how people receive information, news, and entertainment. As people spend more time with social media, advertisers are noticing and shifting their strategies.

Popular social media platforms

The Economist explains this strategy shift in their article A Brand New Game. They show social media’s benefits, such as BMW advertising on popular communication apps in China, as well as some of the downfalls, like DiGiorno’s misinterpretation of a popular hashtag trend, causing them to send out a public apology.

DiGiorno’s public apology

When used efficiently, companies utilize their social media presence to create “online personalities.” These personalities help create a seemingly-more personal relationship with their targeted consumers. Looking at their online presence, the platforms Twitter and Facebook have shown to be the most beneficial advertising outlets for both the advertiser and the consumer.

The abundance of information social media gathers, including a person’s age, location, and interests, allows for advertisers to fine tune their message to their audience. Instead of publishing one broad message, a company will produce many variations of one overarching concept, and will match each variation to the consumers who’s data shows will most likely respond to it.

The Economist article shows trends of global advertising spending, and projects what future spending will go towards. See charts below.

Online advertising of all sorts continues to grow, and within that category, spending on social-media ads has gone from virtually nothing a few years ago to perhaps $20 billion this year.

Although it is likely advertisers will remain involved in all media, TV, print, etc., their presence in the social media game is undeniable and on the rise. They are able to get more relatable and personable messages across to the consumer efficiently. When looking at the shift of advertising from other media to social media, it is an economically good strategy change for companies.

 

Sources:

A Brand New Game

Social Media Platform Image 

DiGiorno Public Apology