InfoCom Shows Where Opportunities Lay with Location-Based Mobile Advertising
Submitted by: InfoCom GmbH
2013-05-04 00:01:09
LBMA has the potential to generate considerable revenue streams — LBMA is more targeted than other ad campaigns — The experience shows LBMA must be executed in different mobile platforms.
(OPENPRESS) Stuttgart, Germany - The interest for Location-Based Mobile Advertising is increasing exponentially as retailers look for alternative marketing channels that can significantly increase visits in stores and sales. The increasing adoption of smartphones as well as the ubiquitous Internet connectivity have open large new horizons for mobile ad campaigns, especially Location-Based Mobile Advertising (LBMA), which reveals not only as an opportunity for retailers. If managed and executed properly, LBMA has the potential to provide additional, considerable revenue streams for mobile carriers as well, who can leverage on their infrastructure and their "audience" to deliver very targeted advertising. To maximise the advertising effect of direct mobile-Based advertisements, carriers can offer access to other "service" channels such as their Internet and TV services. SingTel, for instance, provides advertisement services throughout its different "service" platforms — mobile, Internet and TV — as a sort of one-stop-shop through different channels.
Some successful strategies have been already executed. The experience shows that LBMA must be deployed as a free add-on. This already eliminates users' hesitation of having to pay without knowing if the deal is worth it. All of Telefonica's LBMA offers in the UK, for instance, are provided for free in order to compete with other OTT LBMA providers and online companies that offer free alternatives.
The results of several LBMA campaigns show also that thanks to the granularity of the users' information available, LBMA is much more personalised and targeted to the user, which translates into quite an effective advertisement programme. Telefonica's LBMA programmes in the UK, for instance, have around 2.05% click-through-rate (CTR), against, for instance, Facebook desktop ads' CTR of 0.08% to 0.6%. For its part, the average redemption rate (number of times a mobile coupon has been redeemed over the number of impressions generated) of O2 Priority Moments programme is more than 40%, higher than the market average of less than 10% for other ad channels.
These case studies indicate that LBMA programmes, if correctly executed, are successful and can outperform other marketing initiatives. According to Pizza Hut UK, their SMS campaign with Telefonica is considered as the number 1 performing marketing channel, at least more than 4 times more effective than TV campaigns.
Finally, one of the most important lessons is the importance of offering exclusive offers to reinforce service differentiation. With the proliferation and availability of so many different alternative and competing services, LBMA platforms must rely on the exclusivity of the marketed offers to effectively drive adoption and usage.
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About InfoCom: InfoCom is a market research and consultancy company with over 20 years experience providing strategic analyses and planning assistance to stakeholders in the telecommunications, IT and multimedia industries. InfoCom's independent and fact-based analyses highlight trends and opportunities, supporting decision makers to understand market dynamics in order to improve their competitive advantage.
