17/07/2014 07:50 BST | Updated 16/09/2014 06:59 BST

Save Your Ad for a Rainy Day

Now advertisers can bid on weather conditions to increase ad relevance

Ad serving based on the weather conditions is nothing new, however it is about to become much more prevalent due to technological advancements. It is common knowledge that weather has an impact on consumers' immediate plans and activity, as well as purchasing decisions. Recently, the ability to enable advertisers to bid for online media in real time, based on weather conditions gives digital advertisers the power to reach wider audiences in a more cost effective way based on temperature, rain, snow, and even pollen counts.

There have been several studies on the impact of weather conditions on consumers. Quaker Oats discovered a direct correlation between sales of their porridge and changes in temperature; where the colder the weather the more products they sell. Holiday spots also have more appeal during bad weather spells. In Hong Kong, for example, a Cebu Pacific holiday advertisement for sunny weather in the Phillippines was painted on the pavement using a special technique so that it only appeared when the pavement was wet.

Online advertising has more flexibility than billboards, TV, or print ads and can take immediate advantage of changes in temperature even if they take place on the same day. Based on the IP address, weather conditions can be integrated into an ad server and used to show consumers the most relevant ad for them. Ace Hardware pitched items on mobile devices like shovels and de-icers before and after snow storms and Walmart promoted Campbell's Soup only when the temperature plummeted below 5 degrees Celsius.

In some cases, advertisers use weather data to provide their own personalised weather advisory service. During the 2013 holiday season, Netflix showed suggestions to their viewers that were highly customised based on their location, and weather conditions with catchy ad titles like "It's 47 degrees and raining in Schenectady. Stay dry with the best TV and movies on Netflix."

With the latest technology, advertisers can bid for online media based on dynamic weather parameters in addition to more static user profile information such as geography, demographic, interests, behavioral and content-based data. This way advertisers can reach global audiences through a wider range of publishers in a more targeted and cost effective way.

More relevant ads can also be served quicker, for example sun tan lotion can be offered when a rainy day changes into blue skies. Food delivery services can be promoted wherever and whenever it is raining in every city, not only based on whether there is precipitation or not, but also on the intensity and duration of the rain to identify when consumers really don't want to venture outside.

This ability to bid on ad inventory based on weather parameters is part of a larger trend where real time bidding for online ads is increasing in sophistication. In the future, ad exchanges will enable advertisers to place different versions of an ad based on the weather. For example, consumers can be offered wellies on rainy days and open toe shoes when the sun is shining.

Ad exchanges are also in the process of adding video and rich media formats, making them more attractive for advertisers by eliminating previous limitations. Other features such as frequency capping and limiting the number of times consumers see ads, are also making their way to ad exchanges.

However, in order to tap into the full real time bidding opportunity, additional functionality will have to be added. The industry will have to solve the problem of targeting and measurement across devices. More social networks will need to make their inventory available to exchanges, DSPs (demand side platforms) will have to provide new metrics to prove the value not only of direct conversions from display campaigns, but also the impact of visibility of display ads on brand recognition and awareness. Either way, no matter how long these changes take, expect even larger volumes of premium inventory to become available via auctions.

Bidding based on real time data can make digital ads on exchanges custom made for each consumer, increasing their appeal and effectiveness providing real time razor sharp precision. Including weather as a parameter is bringing ad exchanges one step closer to becoming the preferred medium for reaching the most relevant audiences.