Starbucks has seen an increase in foot traffic since the company started geo-marketing, a growing trend in the U.K. highlighted by the beaconed app of one shopping district.
Starbucks has rolled out location-based mobile ads in the U.K., four years after initially experimenting with geo-targeting by texting discounts to O2 customers.
This time around, the targeting method is completely different. The ads are powered by xAd, a geo-marketing platform that supports more than 30,000 apps and mobile Web ads. The xAd network tracks consumers’ device IDs and locations, then uses that information to deliver targeted advertising. Then, rather than measure success based on traditional click-through rates on mobile banner ads, xAd focuses on “store visitation lift,” or in other words, how many more customers enter the store. According to the company, Starbucks’ standard visitation increased by more than 100 percent after consumers were exposed to the ads.
“xAd can act as an exchange between the inventory suppliers and demand sources or integrate with partners and agency trading desks to integrate into whatever media-buying infrastructure they have in place,” explains Katy Zack, communications director at xAd. “On the user side, a person opens one of those 30,000 apps or Web properties and gets a targeted ad based on whether they meet the campaign parameters.”
Starbucks, along with British supermarket chain Asda, started its trial with xAd over the summer. Both retailers had a goal of increasing foot traffic before the holiday season. The trial has so far shown potential for further location-based campaigns.
“There are two ways to skin a cat, when it comes to location,” says Mike Della Penna, an investor and long-time marketing executive, referring to geo-fencing and using advanced location data from cell tower triangulation. “I think the best strategy is to leverage both, the known and unknown geo-capabilities. You’re going to see a lot of progress being developed in that, focusing on not only geo-fencing pre-visit, but beacons for the in-store experience.”
Della Penna expects to see similar location-based ads in the U.S. sooner rather than later; he believes Starbucks started its campaign in the U.K. because Europe tends to be more advanced when it comes to mobile adoption. One example of this is the Regent Street app.
A mile-strip comparable to Fifth Avenue in New York, London’s Regent Street consists of 130 retailers such as Burberry, Brooks Brothers, Apple, Hugo Boss, and Hamleys, the world’s oldest toy store. In June, the shopping district launched an app loaded with beacon technology, the first of its kind in the world. Nearly 80 percent of the retailers on Regent Street have since installed sensors at their entrances, designed to communicate with nearby mobile devices. The app – which is available for iOS, with an Android version in the pipeline – transmits promotions, product reminders, and special offers, based on the preferences selected by users.
“If people see a particular offer in a specific store, they’re more likely to walk in,” says Annie Walker, director of London’s Regent Street Association. “We think [the app is] a wonderful way for letting visitors know what’s actually in the stores and also enable people to plan their visits in advance.”
Walker says she’s heard overwhelmingly favorable feedback from Regent Street shoppers. Part of that may lie with the app’s customizable nature, allowing consumers to select which stores can send them updates, rather than receiving an overwhelming barrage of offers as they walk down the street.
“It’s all about meeting the consumers’ expectations of getting valuable content during their moment of need on their device of choice,” Della Penna says.
Noting mobile’s ubiquity, he adds that brands are starting to see more app downloads than Facebook likes. According to IBM research, mobile traffic was, for the first time in holiday shopping history, greater than desktop last weekend.
