M-Retailing

Location-based ads starting to drive mobile and high street shopping, US study finds

Location based mobile ads are driving 17% of consumers to make purchases while mobile and 20% to visit physical store locations after seeing a relevant advert a study in the US reveals. It also finds that the better the deal on the promotion, the more likely users are to engage

A study in the US by JiWire, a location based media company, has found that location based mobile ads are driving 17% of consumers to make purchases while mobile and 20% to visit physical store locations after seeing a relevant advert. Additionally, the greater the discount offered, the further the mobile audience is willing to travel to redeem a promotion.

Location-based services and apps are increasingly important to mobile users on the go. As people become more open about sharing their location with apps and services, they are realizing the benefits of providing information to receive relevant and timely ads.

According to the survey: 78% use location-based apps on their phone; 29% use them multiple times a day and 34% clicked on an ad in response to location specific message. Some 57% are more likely to engage with an ad that is relevant to their location, an increase from 46% in Q1, finds the study.

17% have made a purchase in response to a location-based advertisement and 84% of people who use app-enabled phones have participated in a shopping activity. On average, the mobile audience uses 1.6 devices to connect while on the go.

The report also found location-based advertising is driving consumers to physical storefronts. 20% of the on-the-go audience visited a store in response to a location-based ad. Forty two percent said they are most likely to use location-based services for finding store locations. As the discount in the ad increases, the more time a customer is willing to travel to redeem the offer. This provides new opportunities for brands to attract new customers across a broader distance and drive in-store traffic and sales.

“Consumer demand for location-based services and reception to location-based advertising continues to increase dramatically, with companies like Groupon, Facebook and now even Google getting into hyperlocal deals,” says David Staas, SVP of Marketing at JiWire. “Localized ads help consumers find the best deals and venues in their area and as location-based services become more mainstream, people are becoming more willing to give their location to reap the benefits of relevant promotions and discounts.”

The introduction of the iPad in 2010 has not only taken marketshare away from other top mobile devices, including the iPhone and iPod Touch, but is also starting to become the primary device for people on the go. From Q2 to Q4, laptops decreased 26% as the primary device used to connect to public Wi-Fi, while the iPad, along with other tablets, increased 10% and gaming devices (including the iPod Touch) grew 7%.

The top Android devices in the US have become the LG Optimus and the HTC Evo, both running on the Sprint 4G network, while the Droid Incredible and Desire have taken the No. 8 and No. 10 spots respectively. Android continues to increase in marketshare, with 7.7% of ad requests. While Apple iOS still has a strong hold as the top operating system, its share of the mobile device market dropped below 90% for the first time. In comparison, the Apple iOS in the UK maintains 83.7% of the marketshare, with Android accounting for 12.3%.

While the US has continuously been the top market for Wi-Fi usage, China has exceeded the US for the first time, with a 157.7% increase since Q3. The number of public Wi-Fi locations worldwide considerably increased over 2010, growing to more than 414,000 hotspots, a 43.1% increase from last year. Additionally, from Q3 to Q4, there was the most growth in locations during the year, increasing 22.7%.