Location-Based Apps Prompt Store Visits, Spending

Foursquare, Groupon, and Facebook hyperlocal offers prompt 20% of mobile users to visit a store and 17% to spend money, a JiWire study reports.
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Location-based services and apps are changing the ways in which mobile users shop, a new study by JiWire found.

One-fifth of mobile users visited a physical store in response to a location-based ad, according to the latest Mobile Audience Insights Report, released on Thursday. And 17% of consumers have actually spent money in response to one of these ads, said the study, which was conducted in the last quarter of 2010, using data from approximately 450,000 public Wi-Fi locations and a survey of more than 3,000 customers selected from JiWire's location-based media channel.

"Consumer demand for location-based services and reception to location-based advertising continues to increase dramatically, with companies like Groupon, Facebook, and now even Google getting into hyperlocal deals," said David Staas, senior vice president of marketing at JiWire, in a statement. "Localized ads help consumers find the best deals and venues in their area and as location-based services become more mainstream, people are becoming more willing to give their location to reap the benefits of relevant promotions and discounts."

In fact, more than three-fourths -- or 78% -- of respondents had location-based apps on their phones, and 29% used these programs several times each day. Of those users with an app-enabled phone, 84% have participated in a shopping activity, and one-third clicked on an ad in response to a location-specific message, according to JiWire.

The study found that 57% of respondents were more likely to engage with an ad that was relevant to their location, compared with 46% in the first quarter of 2010.

The most popular uses of location-based apps, each cited by 42% of those polled, were to locate a store and to find points of interest, the report said. At 27%, the next most popular use was to check-in, while the third-most popular use -- cited by 26% of those queried -- was to get sales, promotions, and coupons, JiWire found.

Apple dominates the mobile device landscape, JiWire reported. In the fourth quarter of last year, 65.3% of respondents used iPhones, 13.8% used an iPod Touch, and 4.6% used an iPad, according to JiWire. The HTC Desire took fourth place with 3.6%, followed by the fifth-place Samsung Galaxy at 2%, the study said.

By contrast, a November report by the Pew Research Center’s Internet & American Life project found that only 4% of adults online were using a location-based service, such as Foursquare, Facebook Places, or Gowalla, to share their location with friends or find someone. Pew's study sampled users between Aug. 9 and Sept. 13 of last year.

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