• by Joe Mandese  @mp_joemandese, January 5, 2011

At a time when most of Madison Avenue seems focused on a distant, almost astronomical view of the media universe, Interpublic's Geomentum unit has flipped the marketing telescope 180-degrees, turning it, in effect, into an electron microscope. Hold on to that metaphor for a moment, if you will, because it will help explain why MEDIA has named Geomentum one of its agencies of the year for 2010. If the past century of marketing science has been the advertising industry's equivalent of astrophysics (you know, "think global"), then Geomentum is all about quantum mechanics ("act local"). Actually, it's about hyper local - bringing marketing analytics, media planning, strategy, execution and results down to the most micro level of all: proximity. And for marketers who depend on driving consumers to places, especially retailers, which may be the most important perspective of all.

The irony is that it has been hiring rocket scientists to do that. Well, at least one ex-NASA scientist has been among the Ph.D.s hired by Geomentum to develop analytic tools and modeling systems capable of understanding and predicting how the confluence of location and media influence consumer behavior.

The concept was the brainchild of two former retail marketers - Dave Walker (Toys "R" Us) and Mike Hayes (Bon-Ton Stores), who were key executives of Interpublic's massive local newspaper-buying unit, NSA. They came up with a plan to roll up all of Interpublic's local media divisions - NSA, Yellow Pages unit Wahlstrom and out-of-home media unit OAG - into a humongous, multi-billion dollar local media entity that would combine state-of-the-art marketing analytics and modeling techniques with sophisticated communications planning systems; along the way, both Walker and Hayes effectively created the concept of a hyper-local media and marketing services agency.

The plan was always to extend the concept into digital media, especially online, mobile, social media and even advanced, addressable, digital TV advertising systems, which would give brick-and-mortar-based retailers the same tools to influence consumers as click-based ecommerce marketers. Just as this profile was going to press, Interpublic restructured Geomentum, bringing in two of the industry's best-known digital "natives" - Sean Finnegan and Tony Bombacino - to replace Walker and Hayes as the two top executives at Geomentum, and to further accelerate its drive into digital media, including rapidly emerging hyper-local platforms such as GroupOn and Facebook Places.

Geomentum has already begun to activate its hyper-local digital media strategy, cutting a deal with online video ad server Mixpo in November and adding a micro-targeting capability to online video ads, enabling advertisers to serve ads based on a user's local geography.

Adding digital video advertising to the mix provides a dynamic new element for Geomentum and its clients, because TV advertising is generally considered to be among the most effective media in generating sales results. But despite numerous fits and false starts, the TV industry still has not managed to scale a significant addressable advertising marketplace, even though cable TV operators theoretically can segment and insert ads down to ZIP code and even household levels.

So the deal with Mixpo effectively gives Geomentum a running start on what many believe will ultimately become an addressable TV/video advertising marketplace.

The Geomentum team has also been working closely with sister Interpublic audience-buying unit Cadreon, which has built a system for buying online display advertising based on its audience composition, with plans to expand it into online video and eventually TV advertising. That system presumably would also enable Interpublic and its clients to target audiences based on their local profiles.

Geomentum has also quietly begun working on ways to extend that concept into local television advertising buys, something the cable, satellite and broadcast TV industries have been working on for years, but which they have yet to deploy in any meaningfully scalable way.

Geomentum executives declined to comment on exactly how they are doing it, but they are known to have begun buying cable TV on a hyper-local basis below the so-called "interconnect" level, which would mark an industry first.

Geomentum's new chief, Finnegan, says his mission will be to extend those capabilities into other emerging media platforms. He further added that Geomentum would be working closely with other divisions of Interpublic's Mediabrands, especially search and social media specialty shop Reprise Media and audience-buying system Cadreon, but that the "organizing principle" behind it would always be to leverage the hyper-local component of each medium and its unique ability to convey a message to a consumer based on their proximity to a client's brand, store or location-based objective.

While developing more precise ways of buying locally targeted media obviously is critical to Geomentum's mission, it is actually the end result of a sophisticated analytic and planning system that determines which media will influence consumers at various geographic proximities.

"In the world of mass media, where the usual practice is to blanket in order to hit the most people, we offer an opportunity to become more granular - to figure out where your customers reside and where the people who are not yet your customers reside," explains Lisa Bradner, a long-time Forrester analyst who joined Geomentum as president of its analytics and insights division earlier this year.

Bradner says the real power of hyper local is in understanding when, where and to whom to target a message that will have the greatest influence on consumer behaviors. Generally, she says, that has to do with where a marketer's stores, branches or dealer locations are, or equally significantly, where those of their chief competitors are located.

While it is common for marketers and agencies to utilize the propensity of local markets or even specific trading areas to plan media buys, using such well-worn industry concepts as the BDI (brand development index) or CDI (category development index), Bradner says Geomentum's systems get far more granular, incorporating data on demographics, psychographics, macroeconomics with geospatial variables that can determine the mindset a consumer will have about a particular brand message in a particular location and what influence specific media can have in delivering it.

The agency calls the inherent influence a marketer, or as its competitors have in a geographic location, a "relative presence." Geomentum's regression modeling systems are capable of analyzing which variables have the greatest impact and predicting which ones would be most effective in future scenarios.

That's part one of the process. The second step is coupling those models with proprietary insights about the effectiveness of specific media or other communications options (PR, event/experiential marketing, etc.) would have in optimizing the marketer's message to consumers in those locations. In effect, Bradner says the analytics and insights practice couples the fields of marketing mix modeling with communications planning and does it with the unique point-of-view of a hyper-local marketing perspective. Armed with that knowledge, she says, it is much easier to pick the right media and message to execute a campaign.

"The point is to break things down below the market level to find the most productive places within the market. We often begin with a client's CDI or BDI, but that's just a starting point. We then use applied and predictive analytics to determine how someone will become a customer or not and what the real differences are between trading areas in the market," she explains.

And while that may seem easy enough to do on a market-by-market basis, Bradner says the real power of Geomentum's systems is the ability to execute these hyper-local strategies on behalf of marketers who have broad geographic footprints that often are national or even global.

"We've got 35,000 [ZIP codes] in this country. How can you make that scalable? That's where our technology comes in, because you just cannot do this with an abacus and on the back of an envelope. You can do it that way in one market, but not across all markets at the same time."

Geomentum executives are loath to cite specific client examples, for proprietary reasons, but Bradner shares one of a "large financial services client that was interested in taking its retail branches and making them more of a customer acquisitions tool."

The client had a theory that newspapers might be the best medium to influence their conversion, so Geomentum conducted a test in a relatively strong newspaper market - Chicago.

"When we went in and modeled the customers they are looking at and what they react to, we actually saw that newspapers work very hard for them in some parts of the market, particularly the North Shore of Chicago. But in the rest of the market, they didn't work as well for them and local cable TV worked better.

After running the model, Bradner said Geomentum executed a test, buying both the modeled versions and a "controlled market" version using just newspapers. The result was a 239% lift in customer acquisition, proving that the model worked better than the conventional approach.

Since geography is such an important variable for some marketers, especially retailers, the Geomentum team has found themselves working on projects and with people in their clients' organizations that they did not initially expect to: the ones who manage their real estate holdings, deciding where to open new stores, or decommission older, less successful ones. As a result, Geomentum executives are looking at launching a new service practice to apply geospatial planning to real estate holdings. But for the moment, Bradner says the focus is still on media planning, buying and marketing objectives.