Location-based advertising is set to drive mobile shopping and open new advertising channels, a new study shows.

A NAVTEQ survey, compiled by Galaxy Research during April 2011, showed that two-thirds of Australian mobile phone users find it appealing to receive location-based offers when shopping, which presents exciting marketing opportunities to reach consumers via geo-targeted promotions.

The survey also helped to identify the consumer benefits that location-based advertising could deliver, which related largely to convenience and immediacy.

Moreover, when asked about the types of products for which they would most like to receive location-aware ads, the survey found petrol discounts (51 per cent) to be the most appealing, followed by meal and restaurant discounts, groceries and fast food.

“Advertising is not just going mobile, it is going local. The NAVTEQ survey shows that Australian’s are open to receiving location-based discounts and promotions in the form of display advertising on the phone, as long as they offer real and immediate value. When offers are location-targeted, they become that much more relevant for a consumer,” said Kirk Mitchell, vice president of Oceania Sales, NAVTEQ.

This survey also showed GPS usage on a smart phone is on the rise with as many as 70 per cent of those with GPS capabilities using it two to three times per month or more.  Respondents indicated using GPS on their phones most commonly for directions when driving, followed by showing their location on the map, directions when walking and to identify the whereabouts of shops, restaurants or a friend’s location.

“As GPS integration on phones to continues to increase, location targeting presents an unprecedented opportunity for advertisers to target consumers when they are near a point of purchase and then route them to a merchant’s location.  This level of contextual targeting transforms mobile into a direct response channel for brick and mortar merchants,” Mitchell aid. 

The survey also assessed the appeal of an opt-in function, allowing a consumer to decide if and when they would want to receive ads to their phone sent by SMS. Results revealed that 75 per cent per cent of mobile phone users are willing to use the function that enables geo-targeted offers, with one in three (34 per cent) saying they would permanently leave the application switched on.  A further 41 per cent would opt-in when shopping. 

For those aged 18 to 34-year-old, 83 per cent said they would use the function, with 49 per cent switching it on when shopping.  This demonstrates an emerging trend that younger users are more inclined to accept location-aware mobile offers.