Microsoft to use mobile ads to drive store traffic

Microsoft (NASDAQ:MSFT) is nearing its goal of opening 100 stores and plans to use location-based mobile advertising to drive shoppers into stores.

The company tested the technology in the final months of 2013 by setting 10-mile geofences around 75 Microsoft stores, according to Adweek. It then developed different sets of ads to target shoppers, to great success.

The program generated an 89 percent incremental lift in store visits from targeted shoppers compared to a group that were not served the ads.

The program was developed with NinthDecimal (formerly JiWire) to hone in on shoppers looking for specific items. Microsoft is using the technology in a month-long location based mobile ad campaign through June 15 in Miami to promote a new store opening there.

Microsoft is late to the retail sector. After years of toying with concepts and opening stores in fits and starts, the technology company has finally hit on a format worth rolling out. Of course, it looks a lot like its main competitor, but Apple (NASDAQ:AAPL) stores are successful for a lot of reasons that go beyond the product. Pairing this latest prototype with mobile marketing can only help make Microsoft more competitive.

Geotargeted ads are proving to be effective. An Ikea store recently experienced an 11 percent overall lift in store traffic following a geotargeted Facebook ad, a rare measured test of the social network's influence when it comes to paid advertising.

The program by Vizeum, on behalf of Ikea, tracked the campaign as a test for two weeks during December 2013 and January 2014, at a single store in the U.K. The research company measured store traffic from shoppers that saw the ad in its Facebook news feed. Shoe retailer Stride Rite is also testing geofenced ads.

The 1.4 million impressions delivered had the biggest impact on younger shoppers with a 31 percent increase in store visits among shoppers aged 22 to 25 years old. Those aged 26 to 35 had an 11 percent uptick in store visits and the campaign delivered an 11 percent overall increase across all age groups, reported The Guardian

Microsoft has opened 50 new stores in recent months and will reach its 100 unit goal by the end of June.

For more:
-See this Adweek story
-See this Forbes story

Related stories:
Microsoft: Last chance at a mobile wallet?
Ikea gets 11% bump from geotargeted Facebook ads

Apple advances mobile payments with Touch ID
Apple to debut smart home platform based on iBeacon
Apple confirms Beats deal worth $3B