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McDonald’s LBS mobile ads achieve 7 percent CTR

McDonald’s participated in a pilot campaign showcasing Navteq’s location-based mobile advertising services and achieved a 7 percent click-through rate, while also driving consumers in-store.

The campaign, powered by Navteq LocationPoint Advertising, let McDonald’s deliver location-relevant mobile ads to users of the Nokia Ovi Maps application when they were within a certain distance of McDonald’s 82 restaurants in Finland. The ad campaign promoted a McDonald’s cheeseburger for 1 euro, resulting in a 7 percent click-through rate.

“Location is the element that mobile devices bring to the advertising equation that can be leveraged to get optimal results,” said Chris Rothey, vice president of market development and advertising at Navteq, Wayne, PA. “The McDonald’s campaign is backing up our claims about what location targeting can to for mobile advertising.

“The amazing thing about location-based advertising is that it allows merchants to extend their storefront virtually to the surrounding areas and dramatically increase point-of-sale influence,” he said. “McDonald’s wanted to reach consumers in the vicinity and offer them a coupon to drive them to the nearest restaurant.

“We were very pleased with the results.”

McDonald’s Europe claims to be the region’s leading food service retailer with more than 6,600 restaurants in 40 countries serving 12 million customers a day.

Navteq, a subsidiary of Nokia, is a provider of maps, traffic and location data enabling navigation, location-based services and mobile advertising worldwide.

Royale with cheese
McDonald’s is among the first advertisers in Europe to provide insight into the growing location-based advertising market, according to Navteq.

In fact, this was Navteq’s first location-targeted campaign in Europe by a global brand advertiser.

Consumers who clicked on the McDonald’s mobile ads viewed promotion details and received driving or walking directions to the nearest store location.

Of the users who clicked through, 39 percent selected the click-to-navigate option, which offered drive-to or walk-to navigation to the nearest McDonald’s location using Nokia’s Ovi Maps navigation.

McDonald’s Finland said that targeting consumers when they are near its locations and then navigating them right into its stores is powerful marketing for the brand.

A McDonald’s spokesperson said that the brand is thrilled with the results from this campaign, and that Navteq LocationPoint proved that location-targeted mobile advertising does indeed drive foot traffic into its restaurants.

Mobile growth
Gartner predicts that worldwide sales of mobile phones will overtake PCs for Web surfing by 2013, with a 1.82 billion install base of smartphones and browser-equipped feature phones.

As consumers turn to their mobile devices for more services, such as music, maps and entertainment, contextually relevant advertising can enhance the consumer experience while minimizing costs of the services to users, according to Navteq.

Mr. Rothey said that the outstanding performance of the McDonald’s campaign validates the promise that location-based ads are more relevant to the consumer and greater relevance means higher impact.

“There is always a call-to-action component to a campaign—‘We know who you are, we know where you are, so come in and buy,’” Mr. Rothey said. “Location is a powerful part of a campaign, and ads can be delivered in real time.

“Reaching out to someone who is physically capable of buying from you allows advertisers to provide that last-mile incentive,” he said. “We’re finding that providing some type of incentive or offer significantly increases the success rates of these campaigns, providing that final push into the store, which is a role coupons have traditionally played.”

“We encourage our advertisers to provide some type of incentive in the LocationPoint ad.