Oft-Neglected, Local Targeting Represents the Future of Advertising

By Evan Rutchik, President & Chief Strategy Officer, Viamedia.ai

The promise of digital advertising is that the wealth of signals would allow advertisers to deliver one-to-one messaging, tailored to the individual consumer who actually saw the ad creative. Even with technological advancements, this still remains the holy grail of advertising.

The challenge that all brands face is that it’s hard to scale when using data to find a specific cohort of people who have behaved in a desired way. Advertisers need scale, because they need to reach new customers to help drive sales and revenue.

At this stage, the ad industry has been approaching the challenge from the wrong angle. The data required to make scaled one-to-one targeting exists today. What we’re facing is an execution problem.

Nowhere is this more clear than in locally targeted advertising. Local has always utilized some level of geographic insight. While this has been a piece of targeting plans, it has never been the primary signal. As the industry watches the number of available cookies get smaller and smaller, and while advertisers navigate a web of state-level privacy laws, local advertising has a lot to teach us. Even though it’s never been a dominant strategy, local’s reliance on under-utilized signals may provide the path forward in a world without identifiers.

Advertisers aren’t the USPS

To be fair, local advertising isn’t prioritized because one of its primary signals, geographic data, has a reputation of being stuck in time. Many advertisers are only aware of Zip code data, and the problem with zip codes is that they were made for mail delivery, not ad targeting.

There are several issues with zip codes. For one, they aren’t consistent. A single zip code in Wyoming may cover many times the geographic area of one in Manhattan, but it may also cover a fraction of the number of people. Overall, the average zip code is about 4,500 households. Targeting on that level amounts to spray and pray tactics.

Then there’s the fact that people don’t behave by zip codes. Even if a suburb is represented by a single zip code, there are likely pockets of differing behaviors within that town. House size and income can differ on a street-by-street basis.

There are better ways to leverage geography, and to actually uplevel local advertising to build and leverage newly formed local audiences.

Unlocking an underutilized tool

While zip codes have drawbacks, local advertising as a whole has a lot of positives going for it. When going a level deeper than zip and using tighter geographic zones, it’s possible to bring down the average number of households to about 200 per designated area.  That can transform geography, that under-utilized signal, into something more akin to behavioral intent. And that leads to targetable, outcomes-driving audiences.

Amid a changing ad landscape, this has the potential to create consistency. While consumers certainly change addresses, a home address has a longer life than a cookie. Buildings, homes, and businesses also remain in place. The demographic trends of neighborhoods do indeed change with time, but those changes happen at a much slower pace than online behavior.

The most obvious use case for building audiences this way is in retail with brick and mortar stores. But the wider benefit is that it builds audiences without behavior or PII. In short, they are completely privacy friendly across all states, opening up opportunities for pharma and healthcare brands to target effectively, at a proper cost.

Aiming for the future

For decades, so much of targeting was about the “who.” Local advertising certainly had its place, but wasn’t the priority.

The ability to use local tactics to build segments from under-utilized sources gives more advertisers an alternative. Using micro-geographic areas, marketers can elevate the “where” to be on a level field with the “who” when it comes to targeting strategy.

Advertisers using these signals correctly today will find more success with their omnichannel campaigns. In essence, these advertisers are building for a future where all campaigns are omnichannel and can only operate with consistent, accessible signals for targeting. Geo is critical in this context, because it is not going away.