2013 year in review mobile’s big impact on retail · xad/telemetrics mobile path to purchase...

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2013 YEAR IN REVIEW

Mobile’s Big Impact on Retail

2013 Year in Review: Mobile’s Big Impact on Retail 2

• Geo-precise targeting has now become a standard targeting type for local and national campaigns and brands

• Location is increasingly being combined with additional consumer data such as audience attributes and brand preferences to create a truly targeted, engaging, and powerful advertising experience

• Advertisers are thinking past Click Through Rate (CTR) for new ways to measure success and prove ROI

Throughout 2013 we saw a lot of changes in the fast-moving world of mobile advertising. The dominant trends included shifts all the way through the advertising cycle from targeting to measurement:

Our retail Path to Purchase study showed that 77% of smartphone-related transactions are actually happening in person. With mobile offering new ways to reach consumers as they move throughout their days, marketers can leverage the right targeting and message to drive shoppers in-store and give their sales numbers a major boost.

In this report we will examine how mobile is transforming retail and discuss ways that marketers are measuring success. In addition we will quantify mobile’s full impact - both online and offline - on the retail vertical. Finally, we will examine some of the major usage trends and shifts we’ve seen across our network in 2013.

Where Smartphone-Related Purchase was Completed

xAd/Telemetrics Mobile Path to Purchase Study

One major shift we saw on our platform in 2013 is the growth in mobile advertising by retail marketers. This increase is very much indicative of the rapid growth of mCommerce in general. More and more, consumers are turning to their mobile devices to make informed and immediate retail purchases. In fact, in Q4 2013, mobile accounted for 16% of US online purchases.* However, mobile commerce goes way beyond online shopping. In order to capture the full significance of mobile, marketers need to also consider the offline impact of these devices.

13%

77%

7% 2%

In Person Online (PC) Online (Mobile) Other

13%

77%

7% 2%


13%

77%

7% 2%


13%

77%

7% 2%


The Year of Retail

*Source: IBM


Location, Location, Location

This focus on precise location is natural if you consider mobile consumers’ behaviors and expectations. In our Path to Purchase series, we asked smartphone shoppers how close they expect a location to be when searching for information on their device - up to 65% said within 5 miles.

For industries with a longer purchase cycle - such as travel - where raising local market awareness is a key goal, standard targeting may achieve the highest results through broad reach. However, for categories like retail where people are often looking to make a fast transaction, geo-precise targeting can be used to immediately drive customers to visit a retail location.

65%

Expect Business to be Within 5 MilesxAd/Telemetrics Mobile Path to Purchase Study

Restaurant Banking & Finance Retail Auto Travel

62% 57% 53%37%

Location has always been paramount for xAd, but over the past year we saw an increased use of geo-precise targeting for both local and national brands on our platform. Throughout 2013, 96% of our campaigns used geo-precise techniques including geo-fencing, geo-conquesting, or targeting on search behavior. This is up from 81% a year ago.

Geo-Precise RONStandard

3%

96%

1%

Targeting Techniques - 2013

Geo-Precise RONStandard

6%

81%

13%

Targeting Techniques - 2012

By Q4 2013, 1/3 of retail campaigns on our platform had shifted focus from CTR and towards a primary goal of driving in-store visits

Targeted Techniques - 2013Targeted Techniques - 2012


Retail on the xAd PlatformMobile is changing the ways that consumers approach retail. Not only are they actually making transactions on their smartphones and tablets, they are looking to their mobile devices to research options, find contact information, and locate businesses. The on-the-go nature of mobile allows shoppers to interact with their favorite brands in ways that were never before possible.

With consumers relying more and more on mobile for retail, the ad dollars are following closely behind. In 2013, retail was our top ranking category – up from #5 in 2012.

Top Ad Categories by Revenue

2012 2013Telecommunications Retail

Banking & Finance Auto

Travel Banking & Finance

Restaurants Restaurants

Retail Telecommunications

10%

17%17%

4%1%7%

28%

15%

Big Box Clothing & Apparel ( General)

Home & Garden Electronics

Sports & Leisure Clothing & Apparel (Luxury)

Malls Toys

The rapidly growing retail category includes a wide range of shopping types – all of which are leading categories for traditional brick and mortar as well. Big Box retailers made up the largest percentage of campaigns (28%), followed by General Clothing & Apparel (17%), Home & Garden (17%), and Electronics (15%).

xAd Retail Categories


retail TargetingAs with all mobile advertising, the best way to attract a mobile user’s attention is by creating a relevant and engaging experience for the consumer. With the majority of smartphone-related retail purchases happening offline and the consumer expectations for close proximity, targeting is especially important for driving users to store locations. Below are the most successful tactics applied by retail brands to increase in-store traffic.

Targeting Strategies for Retail

Loyalty Geo-FencingReach and engage customers around retail locations and entice them through the door to convert. This works especially well for retail where limited time offers and sales often call for immediate action.

Competitive Geo-ConquestingAttract customers either in the process of making a purchase decision at a competitor’s store or who have shopped at a competitor in the past. Attractive offers and deals can change minds and influence purchase behavior.

Audience TargetingDemographics, geographies, past behaviors, and brand preferences offer powerful cues to which mobile users are most likely to engage with an ad and ultimately make a purchase.

Top Retail Targeting Q4 2013

Loyalty

Competitive

Audience

Other (includes point of interest targeting, standard DMA/city)

38%

40%

10%

12%


Location-Driven Performance

Post-Click, Secondary Actions

Top secondary actions by industry

calls Directions/maps information

Restaurants RETAIL Entertainment

Food & Grocery Beauty & Pharmacy

Auto Home & Garden

Telecom

Travel

Overall performance across the xAd platform continues to be above industry averages. In 2013 targeted display ads performed nearly 15% above the industry and search performed 37% higher than current Click-Through Rate (CTR) benchmarks. In fact, retail campaigns showed an even higher lift (18%), over standard benchmark rates.

While CTR offers an initial understanding of how a user engages with an ad, the most impactful actions happen after the click. Throughout 2013, xAd found that the most common secondary actions were calls to a business. However, it is important to note that post-click behavior varies based on industry. For retail, the most popular activity after clicking on an ad was to look up directions or maps to a store – again demonstrating the power of mobile in this category to create foot traffic to locations.

Targeted Display CTR

0.50%

0.80

0.60

0.40

0.20

0.00

0.57% 0.59%

RetailxAdIndustry

6.0%

10

8

6

4

2

0

8.2%

xAdIndustry

Search CTR

Campaign Goals:To increase awareness around Columbia’s Omni-Heat jacket and incent mobile users to come in-store to experience this product in person

Solution:• Users were targeted in and around locations offering

the Omni-Heat jacket with a location-aware message

• Post click, users were taken to a custom landing pageshowing contact details for the nearest store location

Results:• CTR was 52% above the industry average

• Driving directions and additional details aboutthe Omni-Heat jacket were the highestsecondary actions

TARGETED LOCATION-RELEVANT PRODUCT OFFERS LIFT IN-STORE SALES

“ Mobile, especially combined with location, can be an extremely powerful tool for not only raising awareness butbringing people into your stores. Highlighting Columbia’s innovative technology and product paired with details on the nearest retailer we were able to drive even more relevance to the consumer and support retail partners.”

JULI JOHNSON, ASSOCIATE MEDIA DIRECTOR, BSSP

Industry Benchmark Columbia

+52%

Click Through Rates (CTR) Post-Click Activities

CASE STUDY:

Most users were looking for driving directions or details on the nearest location where they could experience the product in person

65%Product Details

19%Directions

17%Calls


Throughout Q4 2013, xAd successfully tracked over 6 Million in-store visits related to mobile ad campaigns for major retailers

Knowing the important role that brick and mortar plays in mobile commerce, it’s essential to not only understand CTR and secondary actions but also the in-store activities that happen at the end of the purchase funnel. These metrics provide retailers with a measurable understanding of their mobile advertising ROI.

xAd captures this activity through our Store Visitation Lift (SVL) measurement product. SVL allows advertisers to understand the physical impact of their mobile advertising by tracking the store visitation patterns of mobile users after exposure to brand advertisements on-device.

Closing the Loop on Retail: Measuring In-store Visits

Mobile Exposure(Impressions, Clicks, Secondary Actions)

CLOSING THE LOOP

Store Visitation Lift (SVL)


Mobile’s Full Impact

Throughout 2013, mobile not only became a key component of online transactions, also proving to be a powerful driver for brick & mortar sales with as much as 77% of smartphone-related purchase activity happening in-store.*

No other form of media has had such a powerful impact on both digital and offline commerce. Armed with this understanding and the measurements to prove it, we expect that retailers and marketers will continue to innovate and capitalize on new ways to reach their consumers and influence purchase decisions.

Based on our internal findings and other analyst reports, we estimate that mobile directly contributed to online and offline retail sales of over $200B in 2013.** Industry trends suggest that this number will continue to grow exponentially as technology evolves and mobile users become more comfortable with their devices as retail tools.

*Source: xAd/Telemetrics Mobile Path to Purchase**Source: Forrester, IBM, eMarketer, and internal estimates


Published quarterly, this report provides trends and insights from the current mobile landscape, particularly how consumers are using mobile to search for, find and interact with local businesses. By juxtaposing consumer demographics with mobile behaviors, devices and platforms, the data contained herein will help businesses make informed decisions about their current media strategies and future initiatives.

Metrics and insights provided are based on xAd’s network and campaign data throughout 2013 from over 300 unique national brand advertiser campaigns.

For questions or to provide feedback, please contact us at 888.234.7893 or [email protected].

About xAd xAd helps brands harness the power of accurate location data to produce measurable results from mobile advertising. Through award-winning location technology that is precise, measurable and scalable, xAd's platform pinpoints target audiences by neighborhood, across the country and around the globe at pivotal moments during the consumers' path-to-purchase.

xAd's platform drives results powered by search-enhanced targeting, ultimately yielding unparalleled performance. Founded in 2009, xAd is headquartered in New York City and has several offices both across the U.S. and internationally. xAd serves more than 1.5 million national and local advertisers, while managing more than 30 billion location-verified ad requests per month.

xAd Platform Highlights• 160 million unique mobile consumers reached globally• 40 million calls, navigation, and in-store visits driven annually• Access to over 30 billion location verified ad requests monthly

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2013 year in review mobile’s big impact on retail · xad/telemetrics mobile path to purchase...

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