Understanding mediators in location-based mobile marketing and why commuting hubs are so effective—a mediation analysis of a randomized field experiment

Abstract

ABSTRACT Due to its inexpensiveness, speed of implementation and adaptation, push location-based mobile advertising (LBMA) can constitute a powerful, cost-effective marketing tool. Thus, in theory, LBMA bears considerable potential for conducting effective marketing campaigns. However, in reality, to tap into this potential, practitioners, and academics must first understand how targeting strategies, and in particular spatial targeting – determine LBMA’s success rates. While the role of location for the effectiveness of LBMA is well understood, the underlying mechanisms through which location can influence LBMA redemption rates remain widely unexplored. Based on a field experiment with same-day LBMA coupons, this study extends the existing research and shows that location determines LBMA redemption rates via a cognitive and affective component of consumers’ ad perception. Further, this study shows that surprisingly, and contrary to the prevailing mantra that location congruency yields the best LBMA redemption rates, commuting hubs are an appealing alternative to location congruent LBMA.