The Gap campaign placed ads on bus shelters in major cities that were tied to a mobile offer using geolocation. The retailer worked with advertising company Titan on this initiative.

“Location-based offers enable retailers to convert interested consumers who are nearby into in-store buyers,” said Anne Bezancon, founder and president of Placecast, San Francisco.

“This extends the overall marketing strategy into the real world,” she said.

“The relevance of the mobile offer is the key to consumers purchasing in-store, and geofencing and opt-in increases the likelihood to buy by orders of magnitude.”

Ms. Bezancon is not affiliated with Gap. She commented based on her expertise on the subject.

Gap did not respond to press inquiries.

Location is key
Consumers in Chicago, New York and San Francisco could participate in the campaign.

Using Titan’s technology, the print ads at the bus stops were surrounded by a geofence. Consumers who were nearby the ads could then open the Words with Friends mobile application to be served an advertisement from Gap.

The mobile ad included a coupon for $10 off of a purchase of $50 or more that users could redeem in stores.

An initiative such as this from Gap is a great way for a retailer to drive in-store traffic on a device that users carry with them wherever they go.

Location-based advertising is gaining traction as a way to target a user when they are at a specific location.

However, privacy can be a big concern for advertisers with knowing how much of a user’s information is appropriate to use to serve an ad to.

Mobile retailer
The Gap location-based campaign is the latest example of how the retailer is aggressively getting into commerce.

In particular, Gap invests in new mobile commerce tactics such as check-ins, payments and other location-based programs.

Most recently, Gap started using Google Wallet in its stores to let users pay for items via their handsets (see story).

The retailer also worked with Visa on another location-based campaign that sent offers to users via SMS.

Gap’s demographic of young, tech-savvy consumers makes for a natural extension for mobile. Additionally, it is an example of a retailer whose consumers are more willing to fork over user information if it means that they can receive a deal or offer.

“Location-based services will become an integral part of retailers and brands’ strategies in 2012, especially with the availability of new payment solutions that facilitate the financial transaction and make it simple for consumers to purchase what they want straight from tailored offers they receive,” Ms. Bezancon said.

Final Take
Lauren Johnson is editorial assistant on Mobile Commerce Daily, New York