Precision location targeting for mobile study shows incredible effectiveness

A study tracking the movement of shoppers has shown the potential of precision location targeting to improve the effectiveness of mobile advertising. Results showed that tracking where, when, and for how long consumers were in a shopping mall could help determine how shoppers’ physical movements affected their economic choices. The study was undertaken by researchers at Carnegie Mellon University, New York University, and Pennsylvania State University and funded by Google and Adobe. Data was gathered in June 2014  at an Asian shopping mall with more than 300 stores and more than 100,000 daily visitors. Consumers were asked if they wanted to enjoy free Wi-Fi, and if they did, completed a form with their age, gender, income range, and type of credit card and phone. The trajectory of subjects as the travelled throughout the mall was then monitored with subjects being sent a mix of random ads, and ads targeting the consumer based on their current trajectory. Researchers tracked 83,370 unique responses over 14 days. Results showed that the customers sent offers via mobile phone were far more likely to use them if they had been targeted based on their movements and predicted destination. Follow-up surveys also showed that trajectory-based targeting led to higher customer satisfaction among participants. “Our results can help advertisers improve the design and effectiveness of their mobile marketing strategies,” says Beibei Li, assistant professor of information systems and management at Carnegie Mellon University’s Heinz College of Information Systems and Public Policy. Revenue totals rose in stores involved in the trajectory-based targeting and in the mall overall during the study. However, there were some limitations to its effectiveness on the busier weekends or on shoppers who intended to browse several categories, as opposed to single-minded shoppers with just one category as their goal. The tool was notably effective in attracting high-income and male shoppers in particular. “Mobile ads that are based on customers’ trajectories can be designed to influence consumers’ shopping patterns,” explains Anindya Ghose, professor of business at New York University, who co-authored the study. “This suggests that this type of targeting can be used not only to boost the efficiency of customers’ current shopping behaviour but also to nudge them toward changing their shopping patterns, which will generate additional revenue for businesses.” The study appears in the journal Management Science.