Mobile Conquistadors Storm the Marketplace

Led by restaurant and retail chains, marketers are turning into mobile barkers, picking off prospects from the doorways of nearby competitors with offers sent to their cell phones. The practice, known as “geo-conquesting,” is growing at a 50% clip among the clients of one mobile ad network. In its recently released report of client activities in Q2, xAd noted that 31% of geo-targeted mobile ads served in the period targeted competitive locations versus only 22% of campaigns in Q1.

One xAd customer (a casual dining chain that asked to remain nameless) claimed an 80% clickthrough rate (CTR) lift over industry benchmarks with a recent mobile conquest of rivals. Looking to augment numbers in a traffic-driving campaign that set 10-mile geo-fences around its locations, it overlaid a five-mile fence around competitive locations. Both tactics produced similar click-through results, but conquested diners performed 11% more post-click “conversion-related” actions, such as asking for directions.

Marketers can beef up incentives in conquest offers (“Free fries if you come to Wendy’s in the next hour,” for instance) by tapping into location histories of people receiving the ads. “It’s not difficult to target people based on past behavior,” says xAd VP of Marketing Monica Ho, who explains that the travels of individual devices are tracked by hash codes.

On-the-fly creative augmentations can be added to a creative “skin” based on the call to action activated. “There are dynamic areas of the banner that can be changed based on the time of day, or what location the owner of the device is in,” she says.

But geo-conquesting campaigns have limitations, points out David Staas, president of JiWire, another mobile ad platform. “If somebody is just walking by a competitive store, it doesn’t mean she’s going in. And if she walks into Burger King and checks her phone while on line and sees an offer from McDonald’s, is she going to leave the line?”

According to xAd’s analysis of all its clients, the CTR lift turned in by conquesting is lower than that of general geo-fencing, but half a percentage point higher than industry standards. No matter its limitations, it is becoming an additional weapon in the marketing arsenal for a specific set of businesses that maintain extensive retail footprints. In order, the top five geo-conquesting verticals were restaurants, retail chains, banks, travel and hospitality, and gas and convenience.

“It’s a technique that can be used to alter people’s geographic patterns,” Ho says. “I may frequent Macy’s because it’s close to work, but if I receive a good offer from Target, I may drive the extra half mile to go there.”

For would-be Cortez’s of the marketplace, Ho has a few tips. Use action-oriented creative with lucrative, limited-time offers, let prospects know how near they are to the location, and test different targeting radii. “If you use a two-mile radius for geo-fencing programs,” she says, “you might find you can go out a little farther with a conquesting campaign.”

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