Study: Mobile Tracking Offers Marketing Insights, Privacy Hurdles

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People who shop at Whole Foods are twice as likely to work out as those who shopped elsewhere, according to a new study by Mobext, the mobile marketing arm of Havas Digital and consumer research firm Cadio. So what?

"An obvious application of this insight would be for Whole Foods Market to create co-marketing programs with gyms or yoga studios to increase acquisition rates," states the report. While joint marketing efforts aren't novel, mobile technology can help provide the insights underlying such programs as well as deliver campaigns based on them, conclude the authors.

Constantly tracking consumers' shopping and other habits via GPS-capable devices -- as Mobext and Cadio did -- certainly makes that process easier. The firms followed mobile users in Chicago, New York and Boston who agreed to share location information every 10 minutes over a two-week period starting the Wednesday before Thanksgiving last year. They also mapped 200 destinations including airports, hotels, train stations, supermarkets and national retailers.

Among other findings of the study, Wal-Mart shoppers were 60% more likely to dine out than Target customers. Of the Target shoppers who ate out, about 25% went to a restaurant before going to one of its stores and another 25% afterward. The retail chains could use that data to offer more dining options than just snack foods or cross-market with nearby restaurants.

The research also shed light on the clash of the two coffee giants -- Starbucks and Dunkin' Donuts. It found that half of Starbucks visitors also went to Dunkin' Donuts. But among people who went to Dunkin' Donuts, there was a 67% chance they would also go to Starbucks -- suggesting that people preferred Starbucks coffee to Dunkin' Donuts.

"Armed with this level of insight, competitors in this category could consider what drivers, including coffee taste, product mix, location atmosphere and customer experience, contribute to this behavioral preference," according to the report. But it doesn't take a rocket scientist to figure out that people are probably going to Dunkin' Donuts for the donuts.

In addition to competitive information, the report also argues that tracking travel and work patterns is key to media planning. "Using work schedules can determine when target consumers are likely to be watching television or using the Internet," it states. "If out of the home or office, brands can extend their message frequency via mobile advertising."

Boston area residents were most likely to travel long-distance (defined as trips of more than 100 miles in each direction) during the study, but New Yorkers were most likely to travel long-distance for business purposes.

New Yorkers were also twice as likely to work past 7 p.m. than people in Boston or Chicago. So a fast-food chain could use mobile location data to reach consumers only if they were leaving work after 7:30 p.m. and would normally drive within a half-mile of a restaurant location.

What's among the biggest hurdles to mining this wealth of behavioral data via mobile tracking? Getting people to opt in to being electronically trailed wherever they go. The creepiness factor is hard to overcome. While younger, more technology-centric mobile users may be more open to sharing their whereabouts, "other demographics may be more sensitive, in which case it may be necessary to offer more attractive incentives or higher-value rewards to encourage participant opt-in," explains Mobext. In short, try to buy their loyalty.

The report further recommends that brands comply with the CTIA's Guidelines for Location-Based Services, especially when it comes to allowing people to opt-out of GPS data-sharing at any time.

The challenges of gathering and analyzing mobile data present additional barriers to gaining marketing insights. Tall buildings can impede GPS tracking in large cities, and sorting through the mass of data collected is no breeze either. "Stringing together the GPS paths of thousands of participants, overlaying time of day, day of week, as well as targeting advertising by content, quickly becomes a large task," warns the study. That makes it critical for the effort to have a defined focus.

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