Mobile Users Prefer Coupons and Opt-In SMS to Other Types of Ads

A press release based on research from Upstream (conducted by Luth Research) carries the following headline: "Personalized Messages Four Times More Effective than Time-, Lifestyle- or Location-Based Offers . . ." This came to me in an email last night.

The headline and the presentation of the data in the release are somewhat misleading, however. And with so many companies releasing data for PR reasons (and the market awash in numbers) no one should rely on a single piece of data or single study. There are some interesting findings however. 

The Upstream study involved a consumer survey of just over 2,000 US adults (both smartphone and feature phone users); there's no behavioral data here. Below is the hierarchy of ad preferences based on the categories in the survey:

Users ranked personalized offers at 59 percent over those focused on timing (18 percent), lifestyle (16 percent) or location (8 percent). Smartphone users responded in similar fashion, with 60 percent preferring personalized offers over promotions based on timing (17 percent), lifestyle (10 percent) or location (14 percent).

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This stands for the idea that personalization trumps dayparting, lifestyle and location. Lifestyle is a vague concept that seems less relevant than "my tastes and interests." Indeed, this phrase implies greater relevance than these other aided-response categories. The verbatim question is: "In your mind what constitutes the best basis for an offer to be relevant to you?"

Location by itself doesn't mean an offer or ad is relevant, neither does timing. Timing and location are "hollow" in the above list. An ad directed ad people in San Francisco may or may not have any application to my situation. However an ad or offer that has to do with "my tastes and interests" may require location to be relevant and actionable. I can't attend a movie premiere or retail sale happening in another city.

Timing is also an important variable. A discount offer for a restaurant or bar may be more or less relevant depending on time of day and/or day of week.  

The larger point is: multiple variables help make ads more actionable and relevant. And most transactions are conducted or fulfilled offline, so location becomes a way to lead people to a transaction unless it's a pure ecommerce event.

An ad for a new product -- a sound system for example -- needs to show me where I can hear, see and possibly buy the product (location) to make it more than simply a less-than-optimal awareness ad. An ad for a holiday retail sale on my phone is going to be a lot more effective if it comes with a store locator vs. taking me to a crappy mobile shopping experience on my handset. 

Some of the other data among the findings reveal that consumers often assume offline action or local fulfillment. For example, smartphone owners valued the following categories as those they were most interested in (re ads/offers): 

  1. "Content" for my mobile device (it's unclear but this might be apps, music)
  2. Movies/entertainment, including tickets (all fulfilled locally)
  3. Offering from my mobile service provider (perhaps hoping for a discount)
  4. Retail store (95%+ offline purchase probability)
  5. Computers and technology
  6. Travel or vacation (likely e-commerce transaction that pertains to location)

So when we "peel back the onion" on the data, what we see is that people want relevant ads and offers but that location is very much in the background or an assumed feature of the offer.

Perhaps the most interesting and significant data form the survey concerns the most desired marketing "channel" or ad delivery mechanism. The survey question asks, "Which of the following channels for delivering ads to your mobile phone about a product/service would make you more likely to learn more about or purchase the product/service?"

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Among smartphone owners the top responses were the following:

  1. Mobile coupon
  2. Text message (after opt-in)
  3. Mobile email
  4. Ad on mobile site 

Amazingly smartphone users were more interested in SMS marketing messages than feature phone users.

The big conclusion I draw from the data above is that mobile users are interested in saving money (coupons) and essentially want control over the marketing messages they receive (opt-in SMS, or email). Thus these types of ads are likely to be most effective. However, again, the survey is measuring attitudes and not behavior.