Feb 28, 2010
Hyper Local Advertising with PocketCents
Christopher Papa, CMO
"New research from Yahoo's lab indicates that hyper-local targeting of retail display campaigns generates more than five times return-on-ad-spend, measured by sales lift at the retailer. Overall, 75% of the total return in this phase of a new study was generated by in-store purchases.
Customers who live within two miles of one of the retailer's stores represented 10.6% of the audience that sees the ads, but generated 56% of the revenue. Return-on-ad-spend was four times the spend for customers living within five miles of a store, and 21 times the spend for customers living within two miles of a store."
Hyper-Local targeting, or targeting individuals nearest to your store, has become insanely popular in the business community, and this study by yahoo is a clear indication of why. When you're talking about "five times return on ad spend" the potential becomes noteworthy and people start talking. In addition, when 75% of this return came from in-store sales, that signifies the effectiveness of using the internet to pull people into your brick-and-mortar store.
They go on to say that within a 2 mile radius, 10.6% of the campaign's ad reach generated 56% of the revenue for the store. Meaning, over half of people come from within 2 miles. The implications of this fact are remarkably significant. It indicates that the consumer market highly prefers proximity, and is an important trend to consider when designing your campaigns. Logically, if a small business really wants to maximize it's advertising dollar it has to think with a hyper-local mindset.
Taking that extra 89.4% of the budget and focusing it on a 2 mile hyper-local radius would seem like the point of the article right? Consider, only 10.6% of their campaign reach was within that 2 mile radius. So presumably, to effectively achieve their desired reach, it could take them the length of 10 campaigns. Would it be worth it? When considering their return-on-ad-spend results it's almost a no-brainer, especially because you could hypothetically run local campaigns across 10 networks to effectively do the same thing.
How does PocketCents fit into all this? PocketCents can target users down to a 5 mile radius with over 90% accuracy. This is well within the realm of "hyper-local" targeting capability. PocketCents is also a pre-pay, flat-rate system, which actually fits very well with what their data suggests. How? If I care primarily about reaching the people that are closest to me, then I am willing to run campaigns that are highly targeted but might get less impressions as a result. With PocketCents at 25 cents/click you can invest any amount and can expect to receive that amount of traffic. Even if your hyper-local, 5 mile radius means you get 2 clicks a day, it's still better than burning through countless ad budgets. The most important users are closest to your store. So if I am focusing on users in my specified area, why do I want anyone else to see my ad? If you set your ads on PocketCents to have a 5 mile radius, only people within that area will ever be able to see them and that makes PocketCents a really powerful tool for your local marketing campaigns.