Management Science, Vol. 60, No. 7, pp. 1738-1756, June 2014
38 Pages Posted: 20 Oct 2013 Last revised: 5 Dec 2014
Date Written: October 17, 2013
Mobile technologies enable marketers to target consumers by time and location. This study builds on a large-scale randomized experiment of short message service (SMS) sent to 12,265 mobile users. We draw on the contextual marketing theory to hypothesize how different combinations of mobile targeting determine consumer responses to mobile promotions. We identify that temporal targeting and geographical targeting individually increase sales purchases. Surprisingly, the sales effects of employing these two strategies simultaneously are not straightforward. When targeting proximal mobile users, our findings reveal a negative sales-lead time relationship; sending same-day mobile promotions yields an increase in the odds of consumer purchases compared to sending them two-day prior to the promoted event. However, when targeting non-proximal mobile users, there is an inverted-U, curvilinear relationship. Sending one-day prior SMSs yields an increase in the odds of consumer purchases by 9.5 times compared to same-day SMSs, and an increase in the odds of consumer purchases by 71% compared to two-day prior SMSs. These results are robust to unobserved heterogeneity, alternative estimation models, bootstrapped resamples, randomization checks, consumer mobile usage behavior, and segmentation of consumer scenarios. In addition, we conducted follow-up surveys to delve into the psychological mechanisms explaining the findings in our field experiment. In line with consumer construal arguments, consumers who received SMSs close (far) in time and location formed a more (less) concrete mental construal, which, in turn, increased their involvement and purchase intent. These findings suggest that understanding the when, where, and how of mobile targeting strategies is crucial. Marketers can save money by carefully designing their mobile targeting campaigns.
Keywords: mobile commerce; mobile targeting; randomized field experiment
Suggested Citation: Suggested Citation