Push and pull : targeting and couponing in mobile marketing

The prevalence of mobile marketing practices has profoundly changed the way consumers shop. Consumers are increasingly shifting to mobile coupons to enhance their shopping experiences. This shift to mobile has created unique opportunities for marketers to engage and target consumers who both actively pull coupons from the mobile app and passively receive targeted push messages about coupons. The literature in mobile marketing is new and numerous issues have not yet been studied. My dissertation examines two such issues in mobile marketing to advance our understanding of the role of mobile promotions in consumers’ shopping journeys and to explore effective personalization strategies in mobile marketing. My first essay examines the effect of mobile promotions on foot traffic by capturing the dynamic interactions among shopper-initiated and publisher-initiated activities. Shoppers might receive targeted push messages based on either their individual historical behavior ("behavior-based push") or their current location ("location-based push"). I develop a novel multinomial multivariate point process model, which predicts the dynamic interactions between activities. To overcome computational issues in estimation, I develop a new methodology that allows the model to zoom in to days that include activities and to zoom out of inactive days. My simulation of a 15-day period reveals the following insights. First, a behavior-based push leads to an increase in mobile engagement outside malls of more than 25% and an increase in shopping traffic to online stores of about 24%. Second, a behavior-based push would result in an increase in foot traffic to regional malls of about 5% but to strip malls of only about 0.5%. Third, a behavior-based push leads to an increase in mobile engagement inside malls of more than 19% and in coupon redemptions of about 18%, while a location-based push increases mobile engagement inside malls by about 40% and coupon redemptions by about 25%. Therefore, behavior-based push and location-based push play different roles in influencing shopper-initiated activities. I conclude with implications for publishers, mall owners, and retailers on how to leverage mobile marketing to increase mobile engagement, online traffic, foot traffic, and coupon redemptions. My second essay studies the ranking and personalization of organic and sponsored mobile advertising (or coupons) that mix together when delivered to consumers. The publisher faces a tradeoff between placing sponsored ads from retailers to receive revenue from advertised retailers and selecting the right organic ads to keep consumers engaged. I propose a consumer mobile search model that can account for the unique factors in our empirical context and answer my research questions. I present model-free evidence for the influence of screen size, whether consumers are in a shopping mall and ad type. I also show how consumer sliding and clicking influence their exit decisions. The proposed counterfactual simulations explore different ways of personalization, including (i) selecting personalized ad contents from the vast amount of available ads by consumers’ affinity score, by methods like collaborative filtering, or by whether the advertised retailer has an store in the shopping mall a consumer is in; and (ii) ranking selected ads by consumers’ affinity score, by ad discount quality score, or by whether an ad is for online shopping or for in-store shopping. These simulations will provide marketers insights into whether and how much each type of personalization improves consumer responses to both organic and sponsored ads, thereby offering guidance to the publisher in optimizing their current practice.