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Burger King, Subaru trial location-based mobile advertising

Burger King and Subaru recently ran trial campaigns in cooperation with a tier-one U.S. carrier to let consumers find the nearest quick-serve restaurant or car dealership by clicking on a mobile banner ad.

The fast-food chain and automaker tapped the AdWhere platform from Useful Networks, which published the results of the two large-scale trials, which it claims demonstrated the effectiveness of location based advertising over standard mobile advertising. According to Useful Networks, location-based advertising increases the value of mobile advertising by improving targeting and facilitating deeper levels of consumer engagement.

"The strategy of Burger King and Subaru trials was simple: Get customers into their stores," said Mike Lockner, senior product manager of Useful Networks, Denver, CO. "The beauty of LBA and, more specifically, the Store Finder solution Useful Networks created in the trials, is that it reduces the number of clicks a customer has to make to complete the intended user experience.

"Users no longer have to enter in the postal codes to find stores," he said. "They can simply click a call-to-action banner ad and get the address, phone number and map pinpointing the closest store location.

"Also, proximity-based rewards, such as mobile couponing, will also help brands drive traffic into their stores."

Useful Networks powers cross-carrier location aggregation for both carriers and content providers. Useful Networks is a privately held subsidiary of Liberty Media.

Both trials involved two separate call-to-action banner ads enticing customers to find local store locations.

For the Burger King trial, 1,000,181 manual zip-code-entry and Store Finder banner ads were deployed run-of-site on the carrier's portal. The carrier preferred to remain anonymous.

For the Subaru trial, 448,142 manual zip-code-entry and Store Finder banner ads were deployed run-of-site on the same carrier's portal.

The trial-group banner ad asked users to opt in to find the nearest stores using their current location.

The control group was required to manually enter postal codes to find nearby store locations.

The LBA trials showed that location-enabled campaigns increased Store Finder conversion rates by 300 percent in the Burger King trial and 1,000 percent in the Subaru dealership trial.

For Burger King's campaign, the trial group Store Finder banner ad resulted in a 100 percent conversion rate.

The trial showed that a quick-serve restaurant banner ad that directs consumers to a manual zip code entry page will only result in approximately 28 percent of the consumers entering in a zip code, clicking the "Submit" button and viewing a Store Finder page.

Stated differently, the Burger King trial showed a 72 percent abandonment rate when users were required to manually submit a zip code.

That being said, by adding location into a mobile marketing campaign, QSR brands can expect their conversion rate to be three times as high.

According to Useful Networks, the trial also provides supporting evidence that location-aware marketing campaigns are potentially three times as valuable.

Useful Networks claims that the Subaru the trial group Store Finder banner ads also resulted in a 100 percent conversion rate.

The Subaru trial showed that an automotive banner ad that directs a user to a manual zip code entry page will only result in approximately 10 percent of the users entering in a zip code, clicking the "Submit" button and viewing a Store Finder page.

By adding location into a mobile marketing campaign, automotive advertisers can expect their conversion rate to be 10 times as high.

Stated differently, the Subaru trial showed a 90 percent abandonment rate when users were required to manually submit a zip code.

According to Useful Networks, the Subaru trial provides supporting evidence that location-aware marketing campaigns in the automotive vertical are 10 times as successful, and potentially 10 times as valuable.

Mobile advertising as a whole -- not just location-based advertising -- is currently a tiny business in comparison to the advertising industry as a whole, according to Useful Networks.

In 2007, less than $900 million dollars was spent on mobile advertising, compared to the $450 billion that was spent on advertising overall.

This means that mobile advertising is currently less than 0.2 percent of the advertising industry, according to Useful Networks.

In addition, in 2007 spending on Internet advertising alone was more than 24 times as much as spending on mobile advertising.

Current forecasts for mobile advertising predict that annual expenditures will exceed $11 billion by 2011.

Other researchers predict that the market will grow as large as $20 billion in the next three years. That is a growth of more than 2,000 percent.

"Location-based advertising is still a nascent business venture," Mr. Lockner said. "However, the technology is exciting and it gives advertisers better opportunities to target and engage.

"LBA is today's most personal and direct marketing channel, allowing marketers to reach a specific target audience based on the user's geographic location," he said. "LBA offers compelling calls-to-action, and a new way for brands to engage customers which is only possible on mobile."

All of that being said, the potential for mobile marketing is huge, according to Useful Networks.

"At this time, it is hard to gauge how quickly it will take off and how big it will be," Mr. Lockner said. "However, Useful Networks is extremely optimistic and excited about the possibilities LBA provides."