22% to 25% conversion rate seen in an experiment conducted by AT&T and Placecast, says eMarketer
Geo-targeted shoppers show a strong intent to purchase the products they seen, while mobile location-based offers boast high conversion and satisfaction rates.
eMarketer said, according to an experiment conducted by telecom company AT&T and location-based mobile marketing platform Placecast, geo-targeting customers was found to be an efective means to promote brands.
In the experiment, the two companies offered consumers ShopAlerts, which consisted of messages, offers, rewards or coupons sent to their mobile phones when they were near a store or brand.
AT&T created a "geo-fence," or perimeter, around a retail location or geographic area to send the location-specific messages, eMarketer.
The location-based mobile messaging service was tested from April 3 through June 4, 2011, among AT&T customers in Chicago, Los Angeles, New York and San Francisco who opted in to receive messages.
The pilot included eight major marketers, four of which — Del Monte, Kmart, MilkPEP (the Milk Processor Education Program) and SC Johnson — were Draftfcb clients. The agency conducted a post-test survey among consumers who engaged with ShopAlerts offered by the four marketers to determine consumer preferences and attitudes.
Consumers who opted in for the ShopAlerts received a maximum of three messages per week from three different brands based on their proximity to the brand’s geo-fence. The minimum time interval was two days between messages received.
Draftfcb polled consumers who opted in to the ShopAlerts among its four clients after the program ended. With a nearly 100% open rate on the alerts, 50% of consumers who opted in to receive messages from the brands wanted more information. Draftfcb found in some cases there was a 22% to 25% purchase conversion on some of the offers.
Draftfcb Chicago SVP and group management director for mobile platformsPatrick Moorhead told eMarketer, "Allowing consumers to continue to help us refine the relevancy of what we’re giving them is a good way to go."
With respect to geo-targeting, "we’re now we’re at the point with things like ShopAlerts where we’re not only connecting an individual user to a specific offer at a specific time, but also at a specific place," Moorhead said. "You’re really trying to create almost an impulse purchase."