Today brought another great afternoon of sessions at ILM West in San Francisco.  Of particular interest was the session about targeting in online advertising and discussion of “the proximity effect”.

*** O’Hare, CEO and Founder of Local Yokel Media, discussed his company’s ability to provide hyper-local targeting.  And Jeff Minich, Senior Product Marketing Manager at Yahoo!, presented information about Yahoo!’s Proximity Match product.

Why is local targeting important? Because 80% of consumer spending is done within 15 miles of home.

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What is hyper-local targeting?

There are many definitions – but O’Hare defines it targeting an audience down to a single zip code.  The decline of local coverage by more traditional services (think newspapers) in the past 5 years has in some ways made it easier to target those local blogs, sites, and publishers that remain.

The Proximity Match product from Yahoo! takes hyper-local beyond geo-location data and down to the actual physical address of the user.

But is there a so-called proximity effect? You might suspect the answer is “yes” – and that’s right.

  • Yahoo! found that for a national department store the sales lift for customers within 2 miles of a store was 5 times as large as the average customer.
  • Local Yokel found that a hyper-local store launch campaign was 1/25th the cost of direct mail.

While there is most definitely is a proximity effect… Minich calls out that in order to win you must be able to measure that local targeting – to track it back to your investment.

What’s next for local targeting? Both panelists answered easy-of-use and scale. While local targeting can be very rewarding – it can take some work.

Hope you found this information useful.  Good luck with targeting!

David Kline | Microsoft Advertising