The interplay of retargeting and location revisits in location-based advertising

The proliferation of mobile sensing technologies has enabled firms to target ads based on consumers' location, also known as location-based advertising (LBA). We propose that firms consider a new targeting method for LBA that we call location retargeting - displaying mobile advertising offers to users who revisit the area around a particular store. Using a large data set from a major European telecommunications service provider, we investigate the effectiveness of location retargeting relative to retargeting - displaying ads that have previously been displayed (independently from the location history of the targeted user). We find that location revisits significantly improve click rates, demonstrating the potential of location retargeting. Compared to first-time visits, the first exposure to offers at revisited locations lead to a 64.8 percent higher response. Further, controlling for retargeting and location revisits also improves the goodness of fit of our offer response model.