Abstract

This research uses a large sample of users from a mobile platform that enables firms to send geolocated promotions to examine how the value of geolocation information varies at different stages of the promotion funnel. This analysis reveals that although later stages of the promotion funnel account for a large fraction of the improvements obtained with geolocation, early stages of the purchase process also explain a significant part of the effect. Thus, our results show that geolocation adds value, not only because the promotional content becomes more relevant for consumers when they are closer to stores, but also because it allows it to reach consumers who are more willing to receive promotions in the first place. We analyze the role of location types and response times, contributing to a better understanding of the drivers of the value of geolocation information in mobile advertising, compared to traditional push and pull promotions.