Worldwide over 3.6 billion people are deeply engaged with their smartphones. Almost 75% of Facebook’s and 70% of Twitter’s advertising revenues now come from mobile platforms. Mobile technologies have enabled consumers to discover, research, engage, and purchase products anytime, anywhere. By 2018, such seamless and hassle-free digital experience with just a tap of a finger will influence $2.2 trillion in brick-and-mortar sales. A case in point; in China alone Alibaba reaped $14.3 billion in sales during the Singles’ Day in November 11, 2015, and 69% of the one-day sales came from mobile devices.
As customers are engaged with smartphones, marketing is embracing an unprecedented era of ubiquitous mobile targeting opportunities. Branding and advertising managers can leverage mobile technologies to more effectively improve business performance by better understanding the new, connected, nonlinear consumer journey and contextual environment (location, time, weather, competition) of the digital and physical combined consumer experience.
A recent JMR study by Nathan Fong, Zheng Fang, and Xueming Luo finds that mobile “geo-conquesting” proffers enormous profit potential. Geo-conquesting is the practice of sending targeted mobile coupons to consumers near a competitor’s location. The appeal of mobile coupons is unquestionable, since they can reach consumers anytime and anywhere as competitive weapons. No longer limited by physical location, mobile technologies enable offline brick-and-mortar retailers the capability to maintain a presence even at their competitors’ doorstep. As consumers spend more time on smartphones, a focal retailer would target customers in close proximity to its own location. However, such focal (own) location targeting may cannibalize business profits because customers would purchase at the focal store even without the coupon discounts — the more discounts, the less incremental revenue. In contrast, competitive locational targeting can engender incremental sales which may not exist if without sending the targeted coupons to smartphone users. The dataset is from a randomized field experiment in which mobile coupons were sent to customers at three similar shopping areas (competitive, focal, and benchmark locations). The results support that mobile geo-conquesting can take advantage of heightened demand that a focal retailer would not otherwise capture. Consistent with economics price discrimination theories, competitive locational targeting produced increasing returns to promotional discount depth, whereas targeting the focal location produced decreasing returns to deep discounts. These findings are important for marketers to understand the competitive implications of mobile marketing.
Echoing the importance of mobile targeting, the JMR study by Yakov Bart, Andrew Stephen, and Miklos Sarvary find that mobile display ads may shape favorable attitudes and purchase intentions when utilitarian and high-involvement products are featured in such ads. Mobile display advertising (MDA) is the banners ad campaigns on mobile web pages and in mobile applications. The dataset is from a large-scale field test with 54 MDA campaigns, between 2007 and 2010, with about 40,000 consumers. It is reported that MDA campaigns boost consumer attitudes and purchase intentions especially when the products are higher (vs. lower) involvement and utilitarian (vs. hedonic). These results are consistent with theories of information processing and persuasion; MDAs may effectively trigger mobile users to recall and process stored product information. The results contribute to the nascent mobile marketing by presenting a meta-analysis of ad campaigns to determine the fitting products with mobile display advertising network.
Finally, the JMR study by Peter Danaher, Michael Smith, Kulan Ranasinghe, and Tracey Danahe contrasts the influence of traditional vis-à-vis new coupon characteristics on the redemption of mobile coupons. The dataset is from a two-year field test at a large shopping mall, with about 8,500 mobile users in the panel (each user received three text-message mobile coupons at the mall entrances check-in). The results support that the redemption of mobile coupons is determined by where (location) and when (timing) they are delivered. Times for mobile coupons are much shorter than those for traditional coupons; mobile coupons are redeemed with a median redemption time of less than two minutes after coupon dropping. These results provide new insights for mobile marketing, i.e., time urgency, location and coupon timing are critical success factors for mobile coupon redemption, over and beyond traditional coupon factors such as face value and product type.
Forward looking, future research can expand the marketing discipline knowledge and practice in many domains in the context of mobile targeting. For the quant domain, ample mobile marketing opportunities exist regarding analytics with geofencing, geo-tagging, structural and machine learning models for geo-social Facebook, WeChat, Line mobile data, smartphone app services and in-app advertising, real-time personalization and recommendations, and mobile online to offline/offline to online customer engagement and social commerce. Furthermore, for the behavioral domain, more research can be fruitful by examining the issues of balancing privacy and personalization in mobile-powered customer journey, investigating user attention, addiction, empathy, self-representation in mobile social life, and testing rumor, sharing, and social influence amongst individuals with population-scale field experiments.
Read the full Journal of Marketing Research articles:
Nathan Fong, Zheng Fang, and Xueming Luo (2015), “Geo-Conquesting: Competitive Locational Targeting of Mobile Promotions,” Journal of Marketing Research, 52 (5), 726-735.
Yakov Bart, Andrew Stephen, and Miklos Sarvary (2014), “Which products are best suited to mobile advertising? A field study of mobile display advertising effects on consumer attitudes and intentions,” Journal of Marketing Research, 51(3), 270-285.
Peter Danaher, Michael Smith, Kulan Ranasinghe, and Tracey Danahe (2015), “Where, When and How Long: Factors that Influence the Redemption of Mobile Phone Coupons,” Journal of Marketing Research, 52 (5), 710-725.