Way back in the day, Google radically changed the online advertising market with their ability to demonstrate a clear ROI to marketers. Their ability to charge on a "per click" (CPC) basis fundamentally changed the way the nascent online advertising world worked. The CPC model let advertisers pay only when someone actually clicked on the advertisement, proving their desire to learn more. Now advertisers only have to pay when there is true user intent
But changing the business model was not Google's only trick. They were able to take all of this user intent and connect people with all kinds of information. As Google became the dominant search provider, all forms of product manufacturers and retailers had to optimise their online content and store fronts to be seen by Google and the search terms people could and would "google". One of Google's mantras
is to bring all of the world's information to people's fingertips. With their online dominance they have accomplished this to a large part for merchandizing, bringing product information in all forms to those willing to go online and search for it. As seen by their revenue growth, organizations are willing to pay a lot of money to have their items show up in those Google results and there is no end in sight as online advertising continues to grow.
But the world is a big place and advertisers aren't going to spend all of their money on the internet. One group, local businesses still needed to find ways to attract local clientele. For decades these people trusted the "yellow pages" or put promotions and coupons in their local papers. They may have even signed up for those discount booklets
your local kids baseball team would sell door to door. Unfortunately this "market" is highly fragmented and dollars had been getting spread in all sorts of direction. In came the internet and Groupon (plus others including Google
) who brought the concept of daily deals to the internet world. Groupon has effectively soaked up and centralized the local store marketing budget and leveraged the internet effect to show an ROI for the store owner. Localize advertising on the internet is a growing market and players like Groupon have found a very interesting way to capture these local store marketing budget dollars.
Even more granular from a location perspective, some new players in the "mobile location based" applications space have popped up like Foursquare, Gowalla, and SCNVGR. These services utilize a combination of the mobile device GPS and a users willingness to "check in" to a location. Now local businesses can not only market to people in their local communities (aka Groupon), they can actually advertise to them when they are next to their store! This is of course a monster opportunity as the value of an advertisement is inversely proportional to the distance the consumer is from the actual product (translation: the ad is worth more to the advertiser the closer you, the consumer, are to the product or service they are trying to get you to buy). This is such a big deal that Facebook has come in with their "places" feature and look to become the dominant player in the location based local market.
The next logical step of course is to be able to advertise to the consumer when they are physically right next to the product being advertised. You can imagine how valuable it would be for Procter & Gamble
to be able to send you that coupon for Tide while you are in the laundry soap section of the aisle (remember the inverse proportional rule for advertising!). Nearbuy Systems is developing the platform to make this all possible, to truly be able to target market based on the users intent in the store - where they are standing in the aisle. This form of advertising of course has to be done in good taste and with the user's privacy in mind, but survey after survey
suggests that if the store and brand manufacturer can offer a great deal for something you are actually interested in at the time you are ready to buy = BIG WIN!
Location advertising is getting more and more granular. The further refined the technology becomes, the more relevant, useful and powerful the advertising possibilities.