We are just 10 feet away! How does location-based advertising affect consumer-brand engagement?

Abstract

Location-based advertising is continuing to grow in popularity among brands and retailers to deliver marketing messages and promotions. However, little is known about how and why these ads generate brand engagement. This study fills this gap. This paper indicates that two important features of location-based advertising (LBA)—location congruency and personalization—influence brand engagement and that the underlying mechanism behind this relationship is consumer brand identification. Further, it shows it is not only the personalization feature of these ads that increases its effectiveness, but the ad should also be location-congruent to make it effective. The conceptual model is tested by manipulating location-congruency and personalization features of LBA in two different contexts. This study is among the first to provide empirical evidence that LBA increases brand engagement and to uncover the theoretical mechanism of this relationship.