Survey: Location-Based Mobile Ads Outperform Other Formats
By Tom Ryan
According to a survey by the Mobile Marketing Association (MMA), one in four U.S. adults use mobile location-based services. And nearly half of those users responded in some fashion to location-based ads.
By comparison, 37 percent of the survey respondents noticed any ads while sending/receiving texted messages and 28 percent noticed an ad while browsing the mobile web.
The survey of more than 1,000 U.S. adult consumers in mid-March gauged consumer’s responsiveness to location-based advertising (LBA). Of the respondents, 91 percent have a cellphone and 26 percent of that group have used a “map, navigation or some other mobile phone service that automatically determines your current location.”
Other findings from the survey:
- Ten percent of all cellphone owners use location-based mobile services at least once per week
- Adults ages 25-34 are frequent users of location services, with 22 percent using them at least once a week.
- Sixty-three percent of iPhone owners use location-based mobile services at least once per week
- Respondents said they use these services most frequently to “locate nearby points of interest, shops or services.”
- Consumers are interested in allowing their phone to automatically share their location in exchange for perks, such as free use of mobile applications and mobile coupons.
“Consumers believe location-based services offer them significant benefits in functionality and relevance,” said MMA market intelligence VP Peter Johnson in a statement. “Consumers’ significant adoption and appreciation of location-based services opens up enormous new opportunities for brands and agencies to leverage this unique virtue of the mobile channel.”
Discussion Questions: What do you think of the potential of location-based mobile advertising? Do you see anything that may hinder consumer acceptance or further adoption?
For a couple of decades we’ve been dreaming about the ultimate shopping cart that would display the right ads to the right consumers as they entered the right aisle. Location-Based Mobile Ads accomplish this and so much more.
Two months ago I switched from a Blackberry to an iPhone and have fallen in love with apps, and mostly the free variety. A good portion of these apps are free because a small portion of the screen is an ad, and sometimes a location-based ad.
Be careful when you think about this from your own perspective. Google knows your IP and originally asked you if it could use your location when you installed the Google Toolbar. Try a search from home one day and note the Google ads that appear. Try the same search from the office, the airport, or another city. You’ll likely find that you’ve been the target of location-based advertising for years because it works.
Providing promotions/ads at the right time in the right place to the right person has always been the goal. LBA hits 2 out of 3, so it makes sense that redemption rates are higher. Just yesterday I wrote about push vs. pull designs for LBA….
No doubt the convenience of using a mobile device to find a retail location will overcome almost any objection to advertising…unless it undermines the convenience by getting in the way of access to the desired information.
While the article refers to how consumers “say” they notice the advertising, it does not help us understand the ultimate effectiveness of the advertising. Remember there are still three basic criteria for effectiveness: attention, communication and persuasion. The article refers to the first only. Advertisers are counting on the third.
Relevance: it’s the single most important concept in marketing.
The more relevant a marketing message is to the person receiving it, the more likely that message is to affect the person’s behavior. And *where* a person is located can be a critical component of what makes a message relevant.
Many applications of location-based mobile ads are obvious today (coupons for restaurants you are near around dinner time, reminders about shopping lists when you pass the grocery store, or even alerts about specials on the yogurts you like as you approach the dairy case), and many more will be invented in the coming months and years.
The question will be, how long will these applications take to become ubiquitous? Given the accelerating adoption of smartphones and the increasing comfort with sharing personal information, I think the uptake could be shockingly fast. However, whether it takes 1 year or 10, we’ll look back at the days of “dumb” ads that don’t know where you are in the same way we look back on static banner ads today.
Location-based mobile has the potential for greatness, but we’ll have to see what model emerges. Will it be Yelp (or Yelp-like), focused on preferences and map-driven? Will it be more social, like FourSquare? Will mobile search dominate from an ad perspective, as Google dominates the online ad space today?
Retailers can get on top of this through testing different mobile vehicles and measure incremental sales truly attributable to the vehicle. It is ROI–actual proven profit dollars–that will determine winners and losers, just as the ability to prove sales and profit for advertisers caused Google to win among the hundreds of early online combatants.
Take a look at what Pepsi is doing with FourSquare for a sense of where this could go…IF the ROI can be proven at retail.
The most telling statistic is “63% of iPhone owners use location-based mobile services at least once per week.”
That simply means that as cell phones morph to smart phones, the use of location-based mobile services will sky-rocket. Apparently, the only thing that is keeping most users from using these applications is that their hardware can’t.
Even the slowest adopters will find it hard to resist using their phone’s capability to answer a location based question. Once that user gets comfortable with those applications, action will be hard to ignore.
Location-based promotions take us back to the original concept behind what used to be called ‘co-op advertising’: to complete the job that national advertising begins. National ads should create a desire for the product, co-op should tell the consumer where to buy it and what it will cost. Location based ads can do the latter, and can do it closer to the point of sale than can traditional media–think of it as a step between the circular and the endcap.
I had dinner last night with 17 senior retail IT leaders who are ALL OVER mobile everything. Every company present admitted to working on a mobile strategy. Relevance will be key! — but mobility is here to stay.
I agree with the comments above. Retailers need to consider all types of marketing, find the ones that connect with their customer the most and then hammer away!
Retailers can right now develop a database of customers who opt into mobile (text message) communications, then do rather amazing geo-targeted marketing that is a step beyond most examples of mobile couponing you see today. For example, when driving past a store for which I am a mobile club member, technology exists that can trigger a message inviting me to take advantage of an offer, in real time and when I’m in close proximity to the store. Moreover, that offer can be based on my purchase history, demographics or preferences. And a smartphone like an iPhone is unnecessary — this can all be accomplished with a standard “dumb” or feature phone. Because consumers opt-in, acceptance and response should be strong.