Convenience stores and gas stations using geo-fencing saw a 68 percent lift in click-through rates compared to campaigns that did not use location-based targeting, according to a new report from PayPal Media Network.

The report, Location-Based Mobile Advertising: Q2 Highlights, found that overall, geo-fencing provided an 8 percent lift in click-through rates. Financial services saw a 60 percent lift while big box retailers saw a 17 percent lift.

“Geo-fenced mobile advertising outperforms non-geofenced campaigns and is key in driving lower-funnel actions,” said Sarah Hodkinson, director of marketing and sales strategy at PayPal Media Network, Boston.

“The most surprising finding was that geo-fenced campaigns promoting financial services saw such a massive lift compared to non-geofenced campaigns in the same sector, a 60 percent lift,” she said.

“I expected to see this lift for the gas and convenience category and for the big box retail category, which were the other two categories in the top three for increases, as these type of retailers typically require a consumer to go to their physical store.”

Competitive conquesting
Other key findings include that merchants saw a 12 percent lift for campaigns that geo-fenced their competitors’ locations, known as competitive conquesting.

Additionally, PayPal found that geo-targeted campaigns have a strong effect on actions associated with purchase intent, with 57 percent of landing page clicks accounted for by actions such as click-to-map, click-to-call, click-to-view product or click-to-coupon.

Click-to-map is the most popular, with 20 percent of clicks, followed by click-to-call with 18 percent and click-to-view product with 14 percent.

Apparel and big box retailers are the heaviest users of geo-fencing, together accounting for two-fifths of all impressions.

However, travel and transportation merchants were the most likely to leverage location-based targeting, with 50 percent of these campaigns using geo-fencing.

For example, Best Western in Washington state was able to increase traffic to its reservation booking engine by geo-fencing Best Western locations as well as its top three competitors and airports in the area.

Driving relevancy
By city, New York was the most targeted city on the network, with almost twice as many geo-fenced impressions as Los Angeles, the second most targeted city.

The results underscore the importance of relevancy for effective advertising and how location is a core component of relevancy in mobile advertising.

However, merchants need to keep in mind that there are different types of location-based advertising.

Geo-fencing based on latitude and longitude data is the more precise strategy while some ads are targeted based on ZIP code information. Longitude and latitude can be inferred from a ZIP code or true coordinates  used.

“PayPal Media Network’s location-based mobile ad network consists of 100 percent location-aware inventory and uses true lat/long coordinates,” Ms. Hodkinson said.

“Relevancy can be further enhanced by pairing location with other targeting parameters such as current temperature, weather conditions, retailer inventory, pollen count and more, dynamically updating content based upon these attributes,” she said.

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York