Right Message at Right Place: Investigating the Effectiveness of Location-based Mobile Advertising on Consumers' Redemption Responses

Location-based mobile advertising is becoming an increasingly important marketing strategy in today’s business world. Despite the advances of mobile communication infrastructure and smart mobile devices, how to effectively reach consumers through mobile devices to promote products still remains a challenge. Grounded in psychological distance and construal level theories, we propose a study to investigate whether differentiating LMP messages based on consumers’ real time locations can increase their mobile coupon redemption tendency. Specifically, we posit that when consumers are close to the merchant, a LMP with high discount level is more effective than a LMP that promotes a product matching consumers’ consumption needs, whereas the reverse is true for consumers distant from the merchant. Accordingly, a 2*2*2 lab experimental study and a field experiment are designed. In addition, we also discuss the potential contributions, study implications and future research directions.