Engaging and Targeting Consumers on Mobile: Connecting Mobile Promotions to Foot Traffic

Research Interest
The high penetration of smartphones offers marketers unique opportunities to engage and target consumers through mobile applications. Using a unique data set from a major mobile publisher, we examine the effect of mobile promotions on foot traffic to shopping malls by capturing the dynamic interactions among shopper-initiated and publisher-initiated activities. Shoppers may pull coupons from the mobile app, visit a shopping mall or redeem coupons in malls. They may also receive targeted push messages from the publisher, based on either their individual historical behavior (“behavior-based push”) or their current location (“location-based push”). We develop a novel multinomial multivariate point process model, which predicts the dynamic interactions between activities. To overcome computational issues in estimation, we develop new methodology that allows the model to zoom into days that include activities and zoom out of inactive days. We estimate our model through large-scale parallel supercomputing. Our estimation results reveal interesting insights into mobile marketing. First, a behavior-based push can substantially increase shoppers’ mobile engagement. A behavior-based push for instore shopping leads to over 6% more coupon pulls for instore shopping and over 15% more coupon pulls for online shopping. Second, location-based push significantly improves mobile engagement and coupon redemptions in shopping malls. A single location-based push leads to about 9% more coupon pulls and over 9% more coupon redemptions in malls. Third, coupon pulls can lead to significant increase in foot traffic to shopping malls. We find that pulling coupons for instore shopping can increase foot traffic to regional malls by about 4% and to strip malls by about 1.5%. Fourth, behavior-based push is effective in increasing foot traffic to shopping malls. We find that a single behavior-based push for instore shopping would result in 0.23% increase in foot traffic to regional malls and 0.15% increase to strip malls. Therefore, behavior-based push and location-based push play different roles in influencing shopper-initiated activities. We conclude with implications for publishers, mall owners and retailers on how to leverage mobile marketing to increase mobile engagement, foot traffic and coupon redemptions.