• by Laurie Sullivan , 9 hours ago

Proximity as a targeting metric is poised to become one of the most effective performance metrics that advertisers tend to overlook in favor of audience-based approaches, according to Blockgraph, a technology platform for the TV and connected TV (CTV) industry, and the American Association of Advertising Agencies (4As).

“The industry has been focused on targeting people based on who they are, not where they are, using crude and blunt tools,” Jason Manningham, CEO of Blockgraph, told MediaPost. “Audience targeting was used to drive performance, but it’s important to know how close they are to an actual store where they can purchase the products.”

Manningham said 93% of consumers travel less than 20 minutes to a store, and advertisers seem to have forgotten about being more data driven based on proximity.

Determining the location of the household becomes key before serving the ad. A consumer may not want to drive far to find a QSR, Manningham said, but if it’s an auto dealer where the consumer would make a large purchase, that could change.

Mobile devices have leveraged triangulation and GPS for years, whereas traditional and CTV have historically faced technical and structural barriers that prevent real-time proximity with hyper-local real-time triggers from being as central as it is in mobile marketing.

Proximity asks what houses within a geographic location have people in it close enough to make a purchase in person. 

The framework begins with geography, not with audiences or channels, mapping where outcomes can occur before even $1 dollar is allocated.

“Local TV is approximately half the market,” added Amy Pacheco, director of media, tech, and data at the 4As.

The report, “Proximity and Performance: How Closeness Drives Outcomes Across the Media Mix," shows that households within a brand's effective conversion radius are much more likely to respond to ads than those outside it, suggesting the industry should update its media planning, buying, and selling strategies.

Executives believe proximity metrics provide advertisers with an additional incentive to develop and deliver TV ads focused on retail stores and the products available in locations within a specific area.

Proximity can help marketers identify the households most likely to convert based on where outcomes occur.

Rather than beginning with demographic segments or broad geographic boundaries, brands, agencies, and media sellers should begin by using privacy-focused data and identifying which households are close enough to act, and prioritize investment around those audiences, according to the report.

The three-step approach suggests starting with locations where outcomes can occur like store locations, followed by identifying households within a defined conversion radius of those locations, and investing in markets with the highest density of proximity-qualified households

The report suggests that the distance between a household and a retail store will become one of the most consistent drivers of TV advertising, as advertisers look to find new ways to measure performance based on protecting privacy.