xAd begins testing first cost-per-visit pricing model for location-targeted mobile adverts which boost foot traffic

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xAd, the location-based marketing firm, has changed the way it plans to charge advertisers. The company, on Thursday, revealed a new cost-per-visit (CPV) pricing model, whereby advertisers can now choose to pay for only for ads that actually boost foot traffic.

Right now, brands such as Home Depot, Applebee’s and IPG’s Universal-McCann agency are testing the new model.

Nothing much changes in terms of running the actual campaign. Instead, the new pricing model positions xAd a step closer to media buyers who have called for greater transparency of their purchases.

Sashi Seth, Chief Product Officer, xAd, explains:

“It’s a performance product, and you only pay us for people that we send to your locations that have been verified by an independent third party – that takes away all the noise from the system. You don’t have to worry about any of the other things. You know when a person shows up, and we get paid for it.”

Traditionally, foot traffic tended to be seen as a value add-on instead of a primary metric. Indeed, prior to the CPV model, advertisers paid for mobile ads based on impressions and then analysed these stats after the close of the campaign.

xAd hopes that the new model will help brands and retailers drive store and location visits, which is important for industries such as automotive where products are usually test-driven before purchase.

If, for example, an advertiser wants to drive 100,000 people toward a certain store location, the xAd mapping and location technology anonymously tracks mobile IDs of consumers who have seen the ad and went to the store that was advertised.

In addition, xAd also provides weather ad targeting as a consequence of having acquired weather app WeatherBug last November. The tool has proven successful for home brands such as Home Depot to drive ads related to certain weather events.

Seth adds that advertisers no longer need to worry about their targeting methodology. The new pricing model actually delivers on the promise of serving ads that can drive foot traffic. Viewability becomes less of a daunting question to address in this case.

Joshua Lowcock, EVP and Chief Digital Officer for USA at UM Worldwide, explains:

“It’s easy to buy impressions, but it’s harder to buy results, and this is something that forces you to think about buying results and outcomes.”

The format addition combines a direct response with standard online advertising methodology. However, the interesting bit here is that foot traffic is a more accountable measure. After all, it’s difficult to send a bot to a store. Lowcock concludes:

“It’s always going to be a balancing act between performance and brand advertising. But there are retail channels where foot traffic in the door is what matters, and this is becoming an important way to transact.”