Timing And Context Are Determining Factors For Deal-Based Campaigns

Seasonality goes a long way towards improving the success of geo-targeted campaigns, according to a University of Pittsburgh study.

When using proximity-based promotions, 50 percent of stores see no significant increase in foot traffic, according to a study from the University of Pittsburgh. But the other 50 percent do see an increase in traffic, and that success rests on taking advantage of timing and context.

One of the main problems that businesses face when using location-based ad targeting is whether the customers being sent ads have any intention of using the business’ services.

For example, someone leaving a restaurant after eating dinner probably has no interest in a time-sensitive promotion sent from the restaurant next door.

A study conducted at Pitt by the School of Information Sciences and the Stevens Institute of Technology analyzed over 14 million venues from around the country with data from Foursquare, found a roughly 50/50 split between stores that saw an increase in customers checking-in  when deals were offered and ones where no discount or other incentive was presented.

The study was conducted using data from Foursquare
The study was conducted using data from Foursquare

Attempting to figure out what made the difference when deals were offered versus situations that contained no promise of a lagniappe, the study found that a campaign with a clearly defined contextual message with deals that are precisely timed to reflect a typical need or activity during a part of a consumer’s day were the keys to the success of proximity marketing campaigns.

For example, a department store sending out coupons for back-to-school deals in late August near a local school or university tended to score more check-ins than a more general promotion at an arbitrary time of year or day.

Population density where location-based ads are targeted is another important consideration. Tourists wandering the streets of New York are more likely to be swayed into a store they walk past than locals driving home past a strip mall in Florida. The relative popularity of the store in questions contributes as well, with stores that have more name recognition gaining more traction from campaigns than lesser known ones.

Plan of Action

“We are not saying that special deals are not useful to business owners, quite the contrary,” said Konstantinos Pelechrinis, Pitt’s School of Information Sciences’ lead researcher and assistant professor in a press release. “What we are saying is that business owners should be well-versed on the best means for using social media and they should have realistic expectations on how social media can help their individual ventures grow.”

Pelechrinis told the Pittsburgh Post-Gazette that small business owners in less populated areas should make the effort to combine location-based deals with promotions made offline to raise awareness of the campaign and the store itself.

Businesses should take advantage of location-based social media advertising that pushes notifications to smartphones to alert customers when they’re approaching businesses offering deals, Pelechrinis added.

“[I]t’s important to take into consideration the consumers’ state of mind,” said Lucas Evans, founder of marketing company Nectr to the Pittsburgh Post-Gazette, “meaning when, where and how your content is being delivered.”

About The Author
Daniel Parisi Daniel Parisi @daniel_parisi_

Daniel Parisi is a New York City-based writer and recent graduate of the University of Maryland. Daniel specializes in coverage of mobile payments, loyalty programs, and the Internet of Things.