Mobile targeting

Xueming Luo, Michelle Andrews, Zheng Fang, Chee Wei Phang

Research output: Journal PublicationArticlepeer-review

185 Citations (Scopus)

Abstract

Mobile technologies enable marketers to target consumers by time and location. This study builds on a largescale randomized experiment of short message service (SMS) texts sent to 12,265 mobile users. We draw on contextual marketing theory to hypothesize how different combinations of mobile targeting determine consumer responses to mobile promotions. We identify that temporal targeting and geographical targeting individually increase sales purchases. Surprisingly, the sales effects of employing these two strategies simultaneously are not straightforward. When targeting proximal mobile users, our findings reveal a negative sales-lead time relationship; sending same-day mobile promotions yields an increase in the odds of consumer purchases compared with sending them two days prior to the promoted event. However, when targeting nonproximal mobile users, there is an inverted-U, curvilinear relationship. Sending one-day prior SMSs yields an increase in the odds of consumer purchases by 9.5 times compared with same-day SMSs and an increase in the odds of consumer purchases by 71% compared with two-day prior SMSs. These results are robust to unobserved heterogeneity, alternative estimation models, bootstrapped resamples, randomization checks, consumer mobile usage behavior, and segmentation of consumer scenarios. In addition, we conducted follow-up surveys to delve into the psychological mechanisms explaining the findings in our field experiment. In line with consumer construal arguments, consumers who received SMSs close (far) in time and location formed a more (less) concrete mental construal, which in turn, increased their involvement and purchase intent. These findings suggest that understanding the when, where, and how of mobile targeting strategies is crucial. Marketers can save money by carefully designing their mobile targeting campaigns.

Original languageEnglish
Pages (from-to)1738-1756
Number of pages19
JournalManagement Science
Volume60
Issue number7
DOIs
Publication statusPublished - Jul 2014
Externally publishedYes

Keywords

  • Mobile commerce
  • Mobile targeting
  • Randomized field experiment

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research

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