Are Location-Targeting Facebook Ads Right for Your Business?

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Location-specific targeting is a way to restrict your ad audience to a certain geographic area. It is the best way to regionally direct your message, and can be a powerful tool to maximize your ad efficacy. A few clicks on Facebook, and you’ve got ads ready to go. Sounds great, right?

There’s a catch. It can really drive up the cost of your campaign.

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Facebook ads are paid for by an automated “auction.” That means that if other nearby businesses are targeting the same area as you, costs for targeted ads will be higher because of stiff bidding competition.

Before you spend your money, you need to be sure location-specific targeting is right for you. How do you know? The short answer is it depends. The long answer is we can help you figure it out, right now.

First Things First: What Location Targeting Options Are There?

Facebook lets you location target using a mileage radius, or based on “countries, states, provinces, cities, congressional districts, zip or post codes.” These are separate features.

Radius is an easy-to-use location-only filtering, through the “Local awareness” setting on the main page of ads manager.

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But, if you want to target zip codes or other existing geographic regions, you need to go through your page to “Audiences,” which gives you the full, customizable menu for targeting.

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Go ahead, click around for a minute. See the different options? It’s a lot to handle. So let’s get started.

Do You Have a Brick and Mortar Location?

If you’re brick and mortar, geo-targeting your ads could be a great way to get bodies in your store.

You might determine your radius with a location analysis service like Carto. This would allow you to visualize where your customers and website visitors live, so you can figure out your target area.

Here, Warby Parker targets customers in the San Fransisco area for a pop-in event. They give you an exact location when you click on the ad, a simple action that will help measure interested viewers.
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Drawing people in depends on how far people will go for your goods. Your geo-targeting radius might be larger as a car dealership, but smaller as a pizza parlor. Setting the right parameters keeps every dollar working hard.

You can use Facebook’s location tracking to see which people who see your ads are visiting a store. (They match phones with profiles if mobile location services are on.) This helps you identify what ads are working.

E. Leclerc, the French version of SuperTarget, used this feature when they ran a Facebook campaign to reach people within ~6 miles of their stores. These people were in range to buy groceries, household items, and clothes from E. Leclerc — and they did. Roughly 12% of clicks on their ad were followed by a store visit.

So You’re Brick and Mortar: Urban or Rural?

Your strategy for location-specific targeting will look different if you are in a metro or rural area.

City locations will get more competition for ads, but will also reach a greater number of people. To maximize your return, go for a hyper-local focus. Zip codes are a good start to segmenting a city.

For example, Twin Cities Homes for Sale is narrowing their focus to a single zip code for this ad, targeting interest around that part of Minneapolis, instead of trying to cast a wide net for the whole city.

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Rural locations will have to broaden their geographic search. This means you pay for “dead space” where nobody lives. However, you are less likely to have bidding competition.
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Source: Left, Right is Facebook Ad Manager interface

Use a mile radius rather than zip codes, which can be unwieldy shapes and sizes. Take the Massachusetts / Vermont / New York border. The ten-mile radius is a better gauge than zip codes, which can only partially fall within optimal distance.

Are You Only Online?

Geo-targeting probably won’t be the best way for you to identify customers.

That being said, if you regionally target (think: the Pacific Northwest), you benefit. If you’re a clothing retailer, you’d advertise winter coats to places where it actually gets cold.

Or, you might be an online service, like ClassPass, which offers a flat package rate for classes by different independent fitness studios. Facebook’s targeting tools make it easy for them to look for people who are interested in working out.

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So when they add a new city to their service, they can run ads to encourage people to sign up. Using audience and location targeting (complete with a “Sign Up” CTA, like the ad above) gives the most bang for their buck.

Another example is Oxfam. They don’t rely on a brick and mortar store for donations. But they use geo-targeting to focus on wealthier metro areas where people are likely to donate. In May 2015, they used location targeting to raise $10,000 for emergency earthquake relief in just one week.

Note that both of these examples didn’t rely solely on geography. Proximity might be enough to get someone into a coffee shop, but online services generally need specific targeting, rather than a simple radius.

Are You Optimized for Mobile?

Mobile platforms impact how we intake information. If you’ve optimized your ads to mobile already, adding geo-targeting could be a powerful way to maximize their impact.

As much as 40% of people search on the go, so mobile + geo-targeting can be effective. For example, Hertz could target an airport with their concise mobile ad. It would appeal to those getting off the plane, phone in hand. Cultural attractions and the surrounding areas are also prime targets.

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However, if you are new to both mobile marketing and geo-targeting, you might not want to bite off more than you can chew. Take the time to make killer mobile ads before adding all the bells and whistles.

Do You Already Segment Your Ads?

Location is only one way to segment your ads. If you have great success with your current segments, adding geo-targeting might not give you a huge boost.

Why? A couple reasons.

  1. Facebook only lets you pair radius targeting with gender and age. This means that if you’re radius targeting, you can’t rely on your effective segments.
  2. Your other segmentation efforts are doing their job. For example, one online retailer segmented customers on previous purchases and pulled in an astonishing 35:1 ROI. With that success, geo-targeting might be a small piece of the puzzle—or even irrelevant.

A great example of effective, non-geographic targeting is this ad for Proper Cloth.

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Proper Cloth is targeting customers who read GQ, have an income to spend on custom shirts, and are businessmen. They’re probably also narrowing their age range, honing in on the perfect customer.

Since they are primarily an online retailer, location doesn’t necessarily matter, but getting the other demographics right makes a big difference. Can you imagine if this ad appeared for teenage girls?

However, if you’re new to segmentation, haven’t mastered it yet, or don’t have the budget for hyper specific targeting, adding in location can be an easy way to start focusing your advertising. Geo-targeting is easier to implement than other types of Facebook targeting and has plenty of ROI to offer.

No Size Fits All

There are a lot of customization tools out there to help you reach the best market for your product, and location-specific targeting is one aspect. It can immediately create a meaningful connection with potential customers and is a compelling purchase factor, especially for brick and mortar businesses.

But, as with every advertising tool, there’s limits. Understanding the scope and direction of your business is what allows you to make good decisions, so don’t rush into spending your money on geo-targeting if it’s just going to be a waste. Instead, give yourself an honest assessment so you can formulate an A+ ad strategy.

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