Case Study: Geo-Targeted Shoppers Show Strong Purchase Intent

SEPTEMBER 21, 2011

Mobile location-based offers boast high conversion, satisfaction rates

AT&T partnered with location-based mobile marketing platform Placecast to offer 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.

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.

Challenge
Each of the four ShopAlert participants had different business challenges and goals:

• Del Monte’s Kibbles ’n Bits pet food brand sought to create awareness for the brand when consumers were in close proximity of Target and pet food stores. The marketer also wanted to generate awareness around its new Nature’s Recipe line of dog food.
• Kmart used the service to offer consumers mobile coupons that were scanned directly from the handset at the point of sale.
• MilkPEP leveraged the alerts to generate awareness among consumers that chocolate milk is an ideal post-workout option for replenishing fluids.
• SC Johnson worked with Wal-Mart stores in the geo-fenced locations to drive consumers to store shelves to check out Glade scented household products.

Strategy
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.

“We wanted to customize the messages as much as possible so that consumers would know the reason they were getting them.”

—Patrick Moorhead, SVP and group management director for mobile platforms at Draftfcb Chicago, in an interview with eMarketer

Del Monte’s Kibbles ’n Bits pet food brand delivered text messages like this one: “Dogs are family, & family deserves more than just 1 boring taste. Get NEW Kibbles ’n Bits Bistro Meals dog food @ Target Rancho Santa Margarita 2day.”

In the case of Kmart, consumers who opted in to receive the ShopAlerts got a coupon from the retailer if they were within a half-mile radius of a store. They received a text message on their phone that came with the link to the mobile coupon to redeem the offer. For example, the text offered: “Get $5 off any purchase of $50 in the entire store! Shop today and save @375 E Allessandro Blvd.” The message was followed by a link to the coupon.

Results
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.

Key Takeaways
Moorhead maintains that “overwhelmingly, these kind of geo-triggered offers and alerts programs are preferred by consumers. They trigger immediate action.” In addition, he says the program showed that it wasn’t just “deals” that resonated with consumers—MilkPEP, Del Monte and SC Johnson didn’t offer “deals,” per se. Consumers want to hear from brands based on the fact that they offer valuable information: “[Brands] may not be able to offer a coupon or a deal, but consumers still want to learn more about products and that supports an awareness goal.”

Next Steps
In the next version of the program, Draftfcb is in discussions with AT&T and Placecast about enabling consumers who opt in to indicate their preferences for hearing from certain advertisers or to choose which category of advertiser they would like to receive alerts from.

“Allowing consumers to continue to help us refine the relevancy of what we’re giving them is a good way to go,” Moorhead said.

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.”

http://www.emarketer.com/Article.aspx?R=1008599