We're kind of wishing we had a pool going on guessing how many things from our prediction posts will come true in 2013. This is partly because of PlaceIQ, a "next-gen location intelligence" start-up. They're bringing more than one of our mobile marketing predictions to fruition with a new mobile advertising metric called Place Visit Rate.
Not only is the introduction of a new mobile KPI such as this one helping mobile advertising develop its own identity, but it's pretty dependent on geolocation in several ways.
PlaceIQ partnered with Starcom MediaVest Group to conduct a case study on the technology, using one of SMG's retail clients. The results clearly showed a correlation between a smartphone user being shown a store's ad and later ending up in that store. This new KPI may just be the validation marketers are looking for, to prove the value of mobile advertising.
What is Place Visit Rate?
PlaceIQ defines Place Visit Rate in their latest blog post as a mobile KPI that measures "the ratio of people who viewed mobile ads for a physical retailer and subsequently were observed in that store."
This new metric can also be used for other applications, as well. AdAge points out that using location data to guide marketing is important whether or not you're trying to get customers into a physical location.
How does it work?
PlaceIQ's products take large amounts of location data and "organizes it into actionable intelligence." A device is assigned a hash ID (to keep the phone and user anonymous) when it is served an in-app ad through a network. PlaceIQ can then track where the device was when the ad was served, along with other location data.
PlaceIQ then uses the location data to build a demographic profile of the anonymous smartphone user. Because of the way their maps are broken up and the amount of detail on them, the location data can be used to determine what ads to show the user to drive them towards a specific location. Place Visit Rate then connects the number of devices that were shown an advertisement and were then observed at the desired location.
Why is this important?
Because of the demographic profiles PlaceIQ creates for smartphone users, Place Visit Rate can do more than just help you measure mobile ROI, although that is also a major draw to PVR. PlaceIQ said, "We developed this new KPI because we saw the need for mobile marketers to, for the first time, actually verify real-world, measureable ROI." Being able to measure ROI always seems to be a struggle when new marketing methods start to boom; just look at the obsession with social media ROI.
But more than being a key performance indicator for mobile, Place Visit Rate can be used to optimize campaigns. Not only can marketers use the profiles to determine how to target users, but PlaceIQ also allows marketers to set up A/B testing and other tests to optimize mobile ad campaigns.
What does this mean for the industry?
While not yet perfect at all, this is the first step in being able to accurately track mobile ROI. This will definitely attract more companies to mobile advertising. Mobile marketers will be able to go to their bosses and say, "In X amount of time running this mobile ad campaign, the ROI was Y amount." The lack of ability to measure ROI is what prevents many businesses from trying new advertising mediums. As measuring mobile ROI becomes a reality, expect more companies to dive in.