Location-based ads are driving mobile shopping, with 17 percent of the on-the-go audience making purchases via mobile, according to JiWire’s fourth-quarter 2010 Mobile Audience Insights Report.

The report also found that 20 percent of survey respondents visited physical store locations after seeing a relevant ad. Additionally, the greater the discount offered, the further the mobile audience is willing to travel to redeem a promotion.

“In the first quarter of 2010, 46 percent said they would be more likely to engage with an ad that is relevant to their location, and that has gone up 11 percent to 57 percent in the fourth quarter, which reflects a shift in consumers’ mindset,” said David Staas, senior vice president of marketing at JiWire, San Francisco. “They want to do something around them and that creates opportunities for advertisers.

“Location-based advertising generates actions such as driving traffic in-store to create ROI, as 20 percent said seeing a location-based ad resulted in them visiting a store,” he said. “Engaging with location-based ads is driving them to real-world behaviors such as visiting a store or going to the advertiser’s Web site.

“Consumers are confirming that location-based mobile marketing is an effective medium for advertisers.”

JiWire’s Mobile Audience Insights Report is based on data from approximately 450,000 public Wi-Fi locations, as well as a survey of more than 3,000 customers randomly selected across its public Wi-Fi Media Channel from October–December 2010.

JiWire serves advertisements to 40 million unique users across location-based applications and public Wi-Fi locations in North America and Britain and records data from every ad request.

Mobile users want more location-based offers
Location-based services and applications are increasingly important to mobile users on the go.

As consumers become more open about sharing their location with applications and services, they are realizing the benefits of providing information to receive relevant and timely ads.

According to the JiWire survey, 78 percent use location-based applications on their phone, and 29 percent use them multiple times a day.

Thirty-four percent said they clicked on an ad in response to location-specific message.

Fifty-seven percent are more likely to engage with an ad that is relevant to their location, an 11 percent increase from 46 percent in the first quarter of 2010.

Seventeen percent have made a purchase in response to a location-based advertisement.

Eighty-four percent of consumers who use application-enabled phones have participated in a shopping activity.

On average, the mobile audience uses 1.6 devices to connect while on the go, per the report.

Mr. Staas said that location-based advertising is driving consumers to physical storefronts and helping their favorite stores and brands reach them with timely and locally relevant deals and promotions.

Twenty percent of the on-the-go audience visited a store in response to a location-based ad and 42 percent said they are most likely to use location-based services for finding store locations.

As the discount in the ad increases, the more time a customer is willing to travel to redeem the offer. This provides new opportunities for brands to attract new customers across a broader distance and drive in-store traffic and sales.

Mr. Staas said that consumer demand for location-based services and reception to location-based advertising continues to increase dramatically, with companies such as Groupon, Facebook and now even Google getting into hyperlocal deals.

Localized ads help consumers find the best deals and venues in their area, and as location-based services become more mainstream, people are becoming more willing to give their location to reap the benefits of relevant promotions and discounts, per JiWire.

Mr. Staas said that with more consumers adopting app-enabled smartphones, location-based features and services will become synonymous with a mobile lifestyle.

“Early adoption of location-based services was more social-oriented, but now that it is getting more mass-market, there is more interest in the merchandising and shopping aspects of LBS,” Mr. Staas said. “It creates a huge opportunity for advertisers to take advantage of trends in consumer behavior.

“The adoption of GPS-enabled smartphones is fueling a real lift in the adoption of location-based services,” he said. “So many developers are working a location-component into their applications that helps people find things and places that are nearby and more relevant.

“From a JiWire perspective, we’re seeing an incredible demand from agencies and brands across the board—location is a key priority for 2011, and mobile and location are going hand in hand as brands formulate their strategy.”

Final Take
Dan Butcher, associate editor, Mobile Commerce Daily

Mr. Staas