Average CPM For Location-Based Audiences Might Surprise Marketers

About 52% of the 116 digital marketers at agencies and brands participating in a study released Monday said they used location-based marketing prior to the start of the COVID-19 pandemic and in July said now they are either using it more frequently or spending more on the strategy.

About 16% of digital marketers surveyed said they began to use location-based marketing as a direct result of the pandemic. Ten percent have stopped the practice, likely due to budget cuts and needing to pause advertising in general. Another 21% decreased the focus on the practice.

The Location-Based Marketing Benchmark Report, published by Reveal Mobile, analyzes cost and looks at how digital marketers use location data and run location-based marketing at agencies and brands in the United States.

While B2C marketers rely heavily on Instagram and Facebook at about 60%, Twitter sits at a distant third at 31%. LinkedIn and Snapchat round out the top five spots at 23% and 17%, respectively. TikTok and Pinterest are nearly tied, with each of them seeing a little more than 10% of mindshare from marketers.



Despite the controversy around TikTok, the social platform continues to gain share by offering a variety of ad formats from In-Feed and Brand Takeover, to TopView, Branded Hashtag Challenge, and Branded Effects.

Only 9% of marketers rely on demand-side platforms to run location-based marketing campaigns, while 12% do not target via location-based campaigns and 7.5% said they look to “other” means to target.

It's interesting to note that all of the social media ad platforms Reveal Mobile asked about in the survey accept mobile ad IDs for the purpose of audience building, giving marketers full flexibility in terms of targeting, creative, testing and budgets.

CPM costs can be slightly higher with location-based audiences because the target audience has proven to have a higher intent and are deeper into their decision process.

The average CPM for location-based audiences reported by those surveyed is $4.36, compared with the average CPM cost of $9 for Facebook ads focused on impressions. Among the lowest CPMs in advertising can be found on the Google Display Network, which includes Gmail, YouTube and other sites, averaging $2.80.

“The downside to Google is that it doesn’t allow for highly targeted location-based audiences, forcing advertisers to rely on its own built-in tools for geotargeting, allowing marketers to focus mostly on countries and/or cities,” states the report. “When marketers want to get the best possible return on investment for geotargeting, they can do so with audiences who have visited specific locations, powered by geofencing technology.”

Survey respondents see the highest level of investment in cost per click (CPC) and location-based audiences. While the average CPC for Facebook ads is $1.68 across all industries, the average CPC for location-based audiences is $5.40, according to the report.

Results for click-through rates (CTR) are much better via location-based audiences. They take action on ads at an average of 7.53%. The average CTR for Facebook ads across all industries is 0.90%. In those industries where marketers invest most heavily in geotargeting, the average CTR for general, non-geotargeted audiences is 1.59% in retail, 1.16% in beauty and 1.01% in fitness.

Some 52% of marketers see the greatest opportunity for location-based marketing in Food and beverage. Some 41.5% cite Health and Beauty, followed by 41% in Entertainment, 31% in Grocery, 24% in Pets and Animals, 23% in Household Goods, and 21% in Auto and Service. Only 17% find the greatest opportunity in Apparel, 14% in Furniture, 12% in Toys and Hobby, 11% in Hardware, and 7% in other.

There is a direct relationship between where marketers see the greatest potential for location-based ads and where they are spend budget, but 18% of ad buyers are not investing in any of the categories mentioned in the study. Another 7% are running ads on behalf of consumer product goods companies, ecommerce and home services.

When asked to name the industries that marketers are running geotargeted ads in, 31% cite Heath, Beauty and Fitness; 29% cite Grocery; 26% cite Food and Beverage; 19.5% cite Entertainment, 19% cite Pets and Animals, 14.5 cite Auto, Parts and Service; 14% cite Consumer Electronics; and 13% cite Household Goods. Apparel, Hardware, Furniture, Toy and Hobby all came in at less than 11%, according to the study.


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