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Marketers should tap location history of mobile consumers: report

Customers who frequent the same locations at the same time typically have similar purchase preferences, pointing to how marketers can enhance their advertising strategy by tapping the location history of consumers, according to a report from Columbia Business School.

In the ?Social and Location Effects in Mobile Advertising? report, the research reveals that while targeting based on store distance has resulted in effective advertising in the past, customers? location history may hold the key to additional invaluable buying preferences and behaviors. This phenomenon, deemed ?co-location,? may offer up more valuable data than demographics, and could significantly affect how brands spend their advertising dollars in the future.

?Context is a critical factor for marketers, arguably as important or more important than location,? said Jeff Hasen, co-founder of Gotta Mobilize, Seattle, WA. ?Knowing that someone goes downtown on Mondays, Wednesdays. and Saturdays is nice, but it's only part of the story.

?Does he or she go at lunch hour? That would, of course, be of interest to quick-service restaurants, theaters that put on matinees, and dry cleaners, among others,? he said.

?If it's at night, that is another story, one that brings in entertainment, more sit-down restaurants, clubs, and more.?

Better predictions
The study argues that co-location offers better predictions of purchasing behaviors, especially since consumers who visit the same stores at similar times, such as supermarkets, have a tendency to buy similar products. This provides an invaluable opportunity for food marketers or those in the quick service industry to roll out location-specific deals to frequent shoppers.

The authors of the study were intrigued by the notion that consumers who shop at the same time might maintain correlated preferences, prompting them to track survey participants? locations via mobile devices? GPS functions over three months.

The shoppers received digital coupons once or twice daily via a mobile application they were instructed to install, which notified them whenever a new deal become available. If users accepted the coupon, they would get more information and were able to redeem the coupon.

Research showed that consumers who opted-in to a pilot based on location data and preferences validated their deals for consumer packaged goods at the highest rate, with validation for food and beverage promotions at the lowest rate.

Customers were also more likely to redeem an offer the longer it was available.

Keeping in context
In terms of variables, the findings displayed that consumer behavior predictions were more accurate when variables were derived from the co-location and referral networks. Past co-location was also more effective on responses to mobile coupons than traditional variables, including psychographics and demographics.

However, as critical as location histories are to representing unique shopping patterns, context must also be kept at the forefront of marketers? minds when rolling out new advertising efforts. Past co-location certainly aids marketers, but now it is up to those brands to leverage the data in a consumer-friendly way to offer relevant content.

?I'm still waiting for the day when we regularly see an opportunity for mobile users to exchange location and time for something of value,? Mr. Hasen said. ?For instance, I like to buy my wife flowers, but I'm?cheap.

?I'm willing to tell my favorite florist that I'll be in the neighborhood between 5:45 and 7 weeknights,? he said. ?I would be happy to receive an offer for roses during those hours - that's personalization that is win-win, especially since the flowers are perishable and become less valuable to the merchant over time.

?Of course, my wife is wise to my shenanigans, but she welcomes the roses just the same."

Final Take
Alex Samuely is an editorial assistant on Mobile Marketer, New York