Disentangling location based mobile advertising: the effects of location congruence and type of the medium on consumers' ad-recall and buying behaviour

An emerging body of research focuses on location-based advertising (LBA). This literature suggests that the merits of LBA rely on the fact that consumers can be targeted with location-congruent ads on their personal mobile devices. However, it has not yet been taken into account that LBA consists of two underlying constructs: location congruence (congruent vs. incongruent) and medium type (mobile vs. stationary). The present study aims to disentangle these underlying constructs and to show that they affect ad efficacy in different ways. Using a virtual reality lab experiment, this study shows that location-congruent ads affect buying behaviour more than location incongruent ads, and that medium type does not render any differences on buying behaviour. However, in location incongruent situations, mobile ads are more effective than stationary ads as they facilitate consumers’ recall of the ads. Contrary to suggestions from earlier research, the advantages of mobile ads do not lie in location-congruent situations, but rather in enhancing consumers’ attention towards the ad in situations that are location incongruent.