• by Mark Walsh  @markfwal, August 10, 2011

When it comes to the type of offers mobile users prefer to receive, the vast majority favor ads based on their tastes and interests rather than those targeted by location or other factors, according to a new study. The finding comes from a survey of 2,000 U.S. adults conducted by Luth Research on behalf of London-based mobile marketing firm Upstream.

Specifically, 60% of smartphone users polled said they would rather get offers tailored to their interests compared to 17% that preferred ads based on time of day, 14% by location and 10% who wanted ads suited to their lifestyle. The results were similar among feature phone users, with 59% preferring interest-based ads, while only 8% opted for location-tied ads.

Given the hype around check-in services such as Foursquare, Gowalla and Facebook Places, the lack of interest in location-based mobile advertising may strike some as surprising, said Assaf Baciu, vice president of product management for Upstream.

"There's a tendency to think that if I'm near a barbershop and I get an offer for a haircut, that it will be relevant," he said. "But if I'm bald, I'm not going to be interested. My interests, whether sports or something else, are much more important in receiving an offer than whether I'm standing next to a venue."

The study results also bear out Upstream's focus on mobile marketing programs based on users' interests and habits, rather than location. Its Marketing Communications Suite provides technology tools for running mobile promotions, opt-in marketing initiatives and loyalty programs using "gameification" and other techniques to ascertain users' preferences and target ads accordingly.

"We try to use our technology to allow carriers and brands to get to the level of knowledge they need to increase the take rate of anything they sell," said Baciu, whose company's clients include operators, such as Vodafone, and marketers, including Unilever, Nestle and Coca-Cola.

Opening a Silicon Valley office in July, Upstream now wants a bigger presence into the U.S. market. Baciu said the company commissioned the Luth study, in part, to gain a better understanding of American mobile consumers and how to approach the marketplace here.

Among other findings, the research revealed that smartphone users prefer ads for digital content, like TV shows, music or games, followed by movies, entertainment (and tickets), wireless carrier and consumer goods. Feature phone users most wanted offers from carriers.

Which mobile "channel of influence" is most likely to lead to follow-up action? Smartphone owners said they'd be most responsive to mobile coupons, while regular phone users said text alerts. Of course, mobile coupons can also be sent by text message, combining the two approaches. Research by MediaPost's Center for Media Research has shown coupons are the top mobile marketing category based on return on investment.

The Upstream study apparently doesn't consider that targeting based on users' interests can be combined with location-based services. Based on a customer's purchase history and location, a daily deal service like Groupon or Google Offers, might send an offer to a mobile user when that person is near a relevant store.

Bacius acknowledged the possibility of combining different targeting methods and said location-based services are on the company's product development road map. But he reiterated that focusing on consumer interests should be the foremost consideration for mobile marketers.

Not covered in the Upstream survey were mobile users' attitudes toward QR codes. But separate data released Tuesday by youth-focused research firm Ypulse found that small, square graphics containing marketing messages have left even tech-savvy teens puzzled. Less than one in five students have ever used them, and nearly two-thirds have no idea what they are.

"Considering that QR codes direct users to online information, brands and retailers should also provide consumers with simple URLs, which don't require a learning curve, to make sure everyone can access the information they want to share," advised Ypulse editor in chief Melanie Shreffler.