Why Microsoft Is Wrapping Location-Based Ads Around Retail Stores

Tests significantly lifted foot traffic

Microsoft plans to open five stores this month to get to its 100th North American location since getting into retail game a few years ago. The tech brand has dramatically grown its merchant presence, adding 50 shops in the last several months. 

And the Redmond, Wash.-based company will lean on location-based mobile advertising to drive traffic into its new stores after diligently testing the strategy. In the last three months of 2013, its marketers set 10-mile geofences around 75 Microsoft stores and developed different sets of creative in order to contextually target consumers. The electronics-and-software giant says that it generated an 89 percent incremental lift in store visits compared to a group of consumers that were not served the ads.

Microsoft is working with NinthDecimal, which is rebranding today from JiWire. The companies are zeroing in on specific types of consumers within mobile apps—like the aforementioned holidays shoppers or, more currently, Father's Day gift-seekers—and then combining such an audience segment with a location layer.

Those tactics are being employed in a month-long, location-based mobile ad campaign through June 15 within the Miami market to promote a new store opening. For example, Microsoft's ads drove awareness around in-store concerts with pop group Macklemore two weeks before the South Florida opening.

Meanwhile, to learn more about how geofencing works, check out this infographic.

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