Useful Networks - White Paper

With Participants:
Major US Carrier,
Major Ad Network,
Major Fast Food Restaurant (Brand #1)
And a Major Automotive Company (Brand#2)

Authored By: Useful Networks
3/13/2009

Executive Summary – AdWhere™ LBA Trial White Paper

UN worked with a major U.S. Carrier (which will be referred to as “the carrier”) and a major advertising network (which will be referred to as “the ad network”), who in turn worked with a major fast food restaurant chain (Trial #1) and a major automotive company (Trial #2), to launch two location-based advertising trials in the United States. The LBA Trials were centered around a Store Finder page, one of Useful Networks’ AdWhere products, and were designed to test and prove the added benefits that location-enablement brings to mobile marketing campaigns.

Trial Setup

Both trials created very similar end user experiences. The end user experience involved two call-to-action banner ads displayed on the carrier’s mobile portal enticing the customer to find the two brands’ store locations. Although both banner ads were virtually identical (except for the opt-in language featured on the location-enabled banner ad), each banner ad resulted in a different after-the-click experience.

• Control Group: ~ 50% of the banner ad clicks directed the user to a manual zip code entry page.
• Trial Group: the other 50% of users saw a location-enabled banner ad that used the user’s location to generate a Store Finder page without requiring the user to enter in their zip code.
• Trial Purpose: to test whether a location-enabled marketing campaign will result in a higher percentage of Store Finder page views (higher conversion rates):

Location enablement exponentially increases brand exposure, by amplifying conversion rates, and allows the brand to reach the right person with the right message at the right time in the right place – increasing the likelihood of consumer response!

Trial Results

• Brand #1 – Quick Service Restaurant Vertical: ~100% of those users who clicked on the location-enabled banner ad saw the fast food restaurant’s Store Finder page. In contrast, only 28% of those users who were directed to the manual zip code entry page actually submitted their zip code and viewed the brand’s Store Finder page. Stated differently, the non-location enabled banner ad resulted in a 72% abandonment rate.
• Brand #2 – Automotive Vertical: ~10% of those users who were directed to the manual zip code entry page actually submitted their zip code and viewed the automotive company’s Store Finder page (compared to ~100% of those users who clicked on the location-enabled banner ad).

Trial Findings

The quick serve restaurant trial showed that a location-enabled solution yields 3 times as many Store Finder page views than does one requiring a manual zip code entry. The automotive company trial showed that the location-enabled solution yields 10 times as many Store Finder page views. Therefore, it is fair to hypothesize that a location-enabled marketing campaign is, at a minimum, 3 times as valuable as a non-location enabled marketing campaign.

AdWhere LBA Trial White Paper – Purpose

The central purpose of this white paper is to discuss the details of Useful Networks’ two Location Based Advertising trials in the United States. The following stakeholders were involved in the two LBA Trials:
1.Useful Networks – Provider of AdWhere / Store Finder solutions
2.Major U.S. Carrier – Mobile Operator central to both LBA Trials
3.Major Ad Network – the Ad Network owned the brand relationships
4.Brands:
a.Trial #1: Major Fast Food Restaurant – Quick Serve Restaurant Vertical
b.Trial #2: Major Automotive Company – Automotive Vertical

 

AdWhere LBA Trial – Background

UN worked with a major U.S. Carrier and a major advertising network, who in turn worked with a major fast food restaurant chain (Brand #1) and a major automotive company (Brand #2), to launch two location-based advertising trials in the United States. The LBA Trials were centered around a Store Finder page, one of Useful Networks’ AdWhere products.
• Trial #1 (Quick Serve Restaurant Vertical) was launched on December 3, 2008 and ended on December 25, 2008.
• Trial #2 (Automotive Vertical) was launched on December 10, 2008 and ended on December 31, 2008.



For the purposes of these trials, the brands wanted to run pull-based location aware mobile marketing campaigns through the mobile web. UN developed, in partnership with the carrier and ad network, integrated location aware mobile marketing campaigns that featured Store Finder call-to-action campaign mechanics. The primary components to the solutions were:
1. A carrier approved white-listed URL.
2. Cell-ID location embedded into the WAP headers of the white-listed URL.
3. Branded call-to-action display banner ads delivered on-deck (through the carrier’s media portal) over the course of the three week campaigns (approximately).
4. Branded Store Finder mobile web sites (developed and hosted by UN) that featured the brands’ nearest store location on a map with a click-to-call feature provided directly below the map.

*Note: For the purposes of this white paper, the Quick Serve Restaurant trial will be discussed in detail. The two campaigns were setup to be almost identical. Listed below are the differences between the two trials:
• Trial #1 involved a brand in the quick serve restaurant (QSR) vertical. 1,000,181 manual zip code entry and Store Finder banner ads were run “run of site” on the carrier’s portal.
• Trial #2 involved a brand in the automotive vertical. 448,142 manual zip code entry and Store Finder banner ads were run “run of site” on the carrier’s portal.
• The results/conversion rates were significantly different for each trial and will be discussed separately.

How Did the Integrated Campaign Solution Work (QSR Trial #1)?

• The carrier and ad network delivered two versions of a branded call-to-action banner display ad through the carrier’s mobile portal.
• One banner ad was for the “trial group” and one banner ad was for the “control group”.

*Note: the two versions of the banner ads were identical except for the call-to-action text. The carrier required different opt-in language for the banner ad linking to the location-aware Store Finder page, since the end user’s location was used to generate a list of local store locations.

• The trial group clicked on the banner ad and was automatically directed to a Store Finder page that displayed a map with the closest store and displayed the 3 closest store locations below the map. In this group, the user’s location was used to determine the closest store locations, and no manual zip code entry was required.
• The control group (non-location based solution) was integral in establishing industry benchmarks. The control group clicked on the banner ad and was taken to a manual zip code entry page. These users had to enter in their zip code in order to navigate to the Store Finder page.
• Placement for both ads was “run of site,” meaning that the banner ads ran across all sections of the carrier’s mobile portal, depending on the available inventory during a given time period.
• Purpose of the Trials: to assess whether a location-based Store Finder solution increases the effectiveness of a mobile marketing campaign by measuring the conversion rates for branded banner ads (in comparison to manual zip code entry Store Finder pages).



Banner Ad #1 – Trial Group
1. User clicks on the branded call-to-action banner display ad to request Store Finder results (banner ad contains the links to the white-listed URL).
*Note: the banner ad contained the following opt-in language approved by the carrier: “Find me 2 find a **.”
2. URL click (request) goes through the carrier’s WAP gateway and the carrier performs Cell-ID location lookup within the Mobile Application Gateway (MAG) and embeds Cell-ID location within URL headers.
3. Store Finder page (URL) request is then re-directed to UN’s Store Finder mobile web site (with location information embedded into the WAP headers).
4. UN’s Store Finder service then matches the Cell-ID lat/long information to the brand’s store location database and determines which store is nearest to the user and puts it on a map.
5. The map is then served back to the WAP surfer when the page refreshes.
6. In addition, below the map displaying the closest store location is a list of the 3 closest store locations. The stores in this list show an address and a click-to-call option.

Banner Ad #2 – Control Group
1. User clicks on the branded call-to-action banner display ad and is directed to a manual zip code entry page.
Note: the banner ad contained the following call-to-action language approved by the carrier: “Find ** near you now.”
2. User enters in his/her zip code and clicks the submit button.
3. UN determines the centroid of the zip code manually entered in by the user.
4. UN’s Store Finder service then determines which store is nearest to the centroid of the user’s zip code and puts it on a map.
5. In addition, below the map displaying the closest store location is a list of the 3 closest store locations. The stores in this list show an address and a click-to-call option (see Store Finder WAP page in the “Banner Ad #1” example).

Click Through Rate vs. Conversion Rate – Defined

• Click-Through Rate (CTR): a way of measuring the success of an online advertising campaign. A CTR is obtained by dividing the number of users who clicked on an ad on a web page by the number of times the ad was delivered (impressions). For example, if a banner ad was delivered 100 times (impressions delivered) and one person clicked on it (clicks recorded), then the resulting CTR would be 1 percent.

• Conversion Rate: for the purposes of this trial, conversion rate will be defined as the percentage of users who viewed the Store Finder page after clicking on one of the two banner ads. This trial measures two distinct conversion rates; one for the control group and one for the trial group.
o Control Group Conversion Rate: after clicking on the manual zip code entry banner ad, what percentage of the users actually entered in their zip code, clicked the submit button and viewed the Store Finder page?
o Trial Group Conversion Rate: after clicking on the Store Finder banner ad, what percentage of the users viewed the Store Finder page? This number should be close to 100%.
*Note: it might be less than 100% if the mobile operator was unable to supply Useful Networks with the end user’s location (which would happen infrequently).

AdWhere LBA Trial #1 – QSR Results

Zip Code Manual Entry Stats - Control Group

Banner Impressions: 500102
Banner Clicks: 4333
Click Rate (CTR): 0.87%
Zip Code Entry Page Views: 4252
Results Page Views: 1217
Conversion Rate: 28.62%

Store Finder Stats - Trial Group

Banner Impressions: 500079
Banner Clicks: 4184
Click Rate (CTR): 0.84%
Conversion Rate: *100%

*Note: For the purposes of this trial, one major assumption was made: We are assuming that every click on the trial group banner ad (except those resulting in a location failure from the carrier), results in the user viewing the Store Finder page. Therefore, we are stating that if we disregard the location errors, the “Conversion Rate” for the trial group is 100%.

Trial #1 Campaign Totals

Banner Impressions: 1000181
Banner Clicks: 8517
Click Rate (CTR): 0.85%

Trial #1 Results - Summary

• Based on the previously stated assumption, the trial group (i.e. Store Finder) banner ad results in a 100% conversion rate.
• Trial #1 showed that a (quick serve restaurant) banner ad that directs a user to a manual zip code entry page, will only result in ~ 28% of the users entering in a zip code, clicking the “Submit” button and viewing a Store Finder page.
• That being said, by adding location into a mobile marketing campaign, you can expect your conversion rate to be 3 times as high.
• Stated differently, Trial #1 showed a 72% abandonment rate when users were required to manually submit a zip code.

• Trial #1 provides supporting evidence that location aware marketing campaigns are 3 times as successful, and potentially 3 times as valuable.
*Note: keep in mind that the above statistics relate directly to the quick serve restaurant vertical.

AdWhere LBA Trial #2 –Automotive Vertical Results

Zip Code Manual Entry Stats - Control Group

Banner Impressions: 224723
Banner Clicks: 1375
Click Rate: 0.61%
Zip Code Entry Page Views: 4268
Results Page Views: 383
Conversion Rate: 8.97%

Store Finder Stats - Trial Group

Banner Impressions: 223419
Banner Clicks: 1458
Click Rate: 0.65%
Results Page Views: 1035
Conversion Rate: *100%

*Note: For the purposes of this trial, one major assumption was made. We are assuming that every click on the trial group banner ad (except those resulting in a location failure from the carrier), results in the user viewing the Store Finder page. Therefore, we are stating that if we disregard the location errors, the “Conversion Rate” for the trial group is 100%.

Trial #2 Campaign Totals

Banner Impressions: 448142
Banner Clicks: 2833
Click Rate: 0.63%

Trial #2 Results - Summary

• Based on the previously stated assumption, the trial group (i.e. Store Finder) banner ad results in a 100% conversion rate.
• Trial #2 showed that a (automotive) banner ad that directs a user to a manual zip code entry page, will only result in ~10% of the users entering in a zip code, clicking the “Submit” button and viewing a Store Finder page.
• That being said, by adding location into a mobile marketing campaign, you can expect your conversion rate to be 10 times as high.
• Stated differently, Trial #2 showed a 90% abandonment rate when users were required to manually submit a zip code.
• Trial #2 provides supporting evidence that location aware marketing campaigns in the automotive vertical are 10 times as successful, and potentially 10 times as valuable.
*Note: keep in mind that the above statistics relate directly to the automotive vertical.

Useful Networks – About Us

Owned by Liberty Media (Nasdaq: LINTA, LMDIA, LCAPA), Useful Networks (UN) was founded in July 2006, as a location and content enabler allowing mobile content and service providers to receive subscriber location information securely across different mobile networks. As a subsidiary of Liberty Media, Useful Networks is a financially stable mobile location company with unsurpassed exposure to an array of content and media companies (such as DirecTV™, QVC™, Game Show Network™, STARZ! and Discovery Channels™), location technology expertise and ready access to strategic capital to make acquisitions; with our recent acquisition of KnowledgeWhere Inc., Useful Networks expanded its LBS portfolio to include a world class suite of geographically targeted mobile advertising solutions and a state-of-the-art location-enabled gaming portfolio.

Useful Networks’ unwavering corporate mission is to become the leading LBS aggregator/clearinghouse for carriers and mobile application developers on a global basis.

We have developed a secure platform allowing application providers to access location and presence information from mobile networks, while enabling mobile operators to safely and securely deliver location information that respects and implements the myriad of privacy policies across carriers and application types and end-user needs to opt-in and opt out of services they desire while controlling their level of accessibility with others.

To showcase our platform capabilities in the early stages of the LBS marketplace, Useful Networks has launched a number of innovative location aware applications and services: social networking/ community applications (e.g.,SNIFF friend finder), LBS-enabled games (e.g., PhoneTag Elite), and comprehensive location based advertising solutions.

 

Why Location Based Advertising?

Location increases the value of mobile advertising. With location, we can target the “right person with the right message at the right time in the right place.” Location improves targeting and facilitates deeper levels of consumer engagement.
1. Targeting: LBA is today’s most personal and direct marketing channel allowing marketers to reach a specific target audience based on the user’s geographic location.
2. Engagement: Offers compelling calls-to-action, and a new way for brands to engage customers which is only possible on mobile. One example of this is proximity based rewards, which are an AdWhere product and will be mentioned later on in this white paper.

AdWhere Platform – Product Mix

Useful Networks’ location enabling technology can support a variety of location-advertising mechanics within the context of mobile marketing campaigns. UN works with various ad networks and agencies to determine the best mechanic(s) for the overall campaign, but it essentially comes down to the type of location based mobile marketing campaign that the brand is interested in launching.