“When an ad is targeted properly, it ceases to be an ad, it becomes important information.” – David Moore, Chairman of 24/7 Real Media Inc, a WPP company.
Geo-targeting (ie. Targeting geographically – capability to play specific ads targeted at a given region) provides advertisers the ability to focus their messaging to the right audience (ie. To regions where the product is relevant), thereby eliminating spillage and wastage. This dramatically increases the efficiency of ad spends, sometimes by as much as 500-600%. Geo-targeting brings the additional ability to calibrate the levels of advertising to different audience segments – for example, increasing advertising weights to audience that have higher affinity to the product. This allows micro- balancing of advertising budgets to maximize effectiveness of advertising spends.
Incidentally, geo-targeting also increases the value of inventory for media owners. As the level of targeting increases, advertisers are willing to pay premiums for the efficiency gains that they get out of targeting. This would typically mean that the same ad inventory can be monetized better by providing ‘splitting’ the ad spot by location and offering targeted ad inventory to different advertisers, each with a premium.
With limited ad inventory, media owners are constantly searching for ways to increase yield-per-spot. Geo-targeting helps scale the yield-per-spot without adding any costs to the media owner either in terms of programming, distribution or sales, all with the same viewership. For viewers, geo-targeting means relevant ads; of products that are available locally, that are popular locally, discounts/offers that are available locally and that meet local requirements. Often, relevant ads would mean the difference between channel-skipping and immersing in the ad. Relevant ads improve viewership and customer engagement, thereby benefiting both the broadcaster and the advertiser.