Estimating the Capacity of the Location - Based Advertising Channel

Abstract

Delivering "relevant" advertisements to consumers carrying mobile devices is regarded by many as one of the most promising mobile business opportunities. The relevance of a mobile ad depends on at least two factors: (1) the proximity of the mobile consumer to the product or service being advertised, and (2) the match between the product or service and the interest of the mobile consumer. The interest of the mobile consumer can be either explicit (expressed by the mobile consumer) or implicit (inferred from user characteristics). This paper tries to empirically estimate the capacity of the mobile advertising channel, i.e., the number of relevant ads that can be delivered to mobile consumers. The estimations are based on a simulated mobile consumer population and simulated mobile ads. Both of the simulated data sets are realistic and derived based on real world data sources about population geo-demographics, businesses offering products or services, and related consumer surveys. The estimations take into consideration both the proximity and interest requirements of mobile ads, i.e., ads are only delivered to mobile consumers that are closeby and are interested, where interest is either explicit or implicit. Results show that the capacity of the LBA channel is rather large, which is evidence for a strong business case, but also indicate the need for user-control of the received mobile ads.

Governing the geocoded world: Environmentality and the politics of location platforms

“…Paraphrasing Bourdieu (1989), we could think of this operation as the mapping of the 'space of lifestyles'. For instance, the record of a given user's visits to different locations may be used to build a consumer profile based on the characteristics of the places this person has gone to and their respective periodical patterns -such as frequency, date, time (see Gidofalvi et al, 2008).…”

Consumer's attitude to receive and response to SMS advertising

“…The purchase processes usually have some time-dependency relationship (Salehi, 2013). An advertising message can be made contextually valid by identifying the location of a single consumer at a specific point in time (Gidofalvi et al, 2008;Xu et al, 2008), for example, the sending of a lunch voucher while passing by a restaurant. This specific form of advertising has been found to add value for the consumer, and it is referred to as conditional value in the literature, occurring only within a specific situation (Ferris, 2007;Holbrook, 1994;Merisavo et al, 2007).…”

Ubiquitous Advertising Challenges

“…to match the message with the user so it is accurate and relevant. One important issue for relevant ads in this setting is the proximity of the mobile consumer [12], i.e. to make use of location based advertising [11].…”