Locator tools improve mobile ad response for quickservice restaurant

Quick-service restaurants that incorporate a location component into their mobile advertising initiatives are more successful than restaurants that do not, according to a new report from Verve Mobile.

Verve’s new “Location Powered Mobile Advertising: The Impact on the Quick Service and Casual Dining” report looks at which location-based mobile tactics work for quick-service restaurants. The report also gives a couple of case studies of restaurants that have used mobile advertising to drive in-store traffic.

“Mobile location-targeted ads really work at many levels for restaurants – driving click-through rates and engagement as well as foot traffic – and actually increasing customer visits to restaurants,” said Tom MacIsaac, CEO of Verve Mobile, New York.

Driving foot traffic

Verve looked at more than 100 mobile campaigns in the quick-service restaurant and casual dining industry that ran from January 2012 – March 2013.

According to Verve’s report, 70 percent of all mobile campaigns from quick-service restaurants leveraged location.

When it comes to tactics that brands are using, geo-aware, geo-targeted and audience targeting were the most used type of targeting by marketers.

In fact, 55.17 percent of QSR brands picked to use geo-aware technology in their campaigns. These types of ads are targeted to a consumer based on their city or DMA.

Geo-fencing – which serves ads to consumers within specific radius of a restaurant location – were used by 27.59 percent of QSR brands.

Slightly more than 17 percent of QSR brands leveraged audience in their mobile campaigns. Targeting by audience means that marketers are able to segment users based on their location data.

Leveraging location can be particularly effective in driving click-through rates for QSRs, per the report.

Campaigns that used location-based technology generated an average click-through rate of 1.21 percent compared to the .61 percent for QSR campaigns that did not leverage location.

Lead by example

The study also uses a recent case study example from an Italian casual dining restaurant that used location-based advertising to help promote a new healthy dining menu.

The goal of the campaign was to lure consumers between the ages of 35-45 years old into stores, and the brand geo-fenced ads around places where health-conscious women visit, such as gyms or health food stores.

Additionally, the company used geo-conquesting to rope ads around competitors’ stores.

The campaign generated a four percent click-through rate, and the markets with the highest engagements were New York, Washington and Cleveland.

Verve also claims that one brand that married location with analytics found a 3X increase in foot traffic.

The study also points to a recent campaign from a national QSR brand that used mobile advertising to promote its discount menu items.

Banner and expandable ads were used in the campaign. Consumers who were served a banner ad could tap to find a nearby location, and the expandable ads included a menu gallery, a restaurant map and integrated with social media.

Per Verve, consumers spent an average of 23 seconds engaging with the expandable ads and 1-15 seconds with the standard banner ads.

The campaign generated a 3.21 percent click-through-rate.

Verve also measured the consumer behavior to test the effectiveness of mobile location-based campaigns.

A control group was comprised of consumers who were not exposed to an ad but visited an advertiser’s location. This was compared to a group of consumers who viewed the ad and also visited the location.

Consumers who were served a geo-fenced ad near an advertiser’s store were 3.9 times more likely to visit the store than those who did not see the ad. These consumers were also 23 percent less likely to visit a competitor.

Another group of consumers were served an ad near a competitor’s store. Per Verve’s findings, the consumers in this group were 3.1 times more likely to visit the advertiser’s store and 18 percent less likely to go to the competitor, despite the fact that they were nearby to the competitor’s store.

“We see mobile location-targeted advertising as the single most effective display advertising strategy for QSRs across online and mobile and this research demonstrates that with measurable ROI analysis,” Mr. MacIsaac said.