September 11, 2012, 1:18 PM

Mobile shopping company Spotzot launches ads

SpotAds run on shopping, search and location-aware apps and web sites.

Lead Photo

A screenshot of a SpotAd

Mobile shopping company Spotzot, which feeds product and deals information to mobile commerce sites and applications, has launched a new mobile ad service, SpotAds. Macy’s Inc., No. 14 in the Internet Retailer Top 500 Guide, and Best Buy Co., No. 11, ran pilot SpotAd campaigns for 45 days earlier this year, Spotzot says. The ads received an estimated 300,000 to 2 million impressions, or instances of being served up to mobile sites or apps, in the United States with a 40-70% click-through rate, the company says. Additionally, 4-12% of shoppers who clicked on the ads then visited that retailer’s store within 72 hours.

Spotzot’s shopping information is served up via an application programming interface, or API, that mobile developers can connect with to feed products to their web sites and applications. Its content reaches more than 100 million mobile shoppers each day, Spotzot says. Each mobile search connected to the feed, whether via Spotzot’s own app or another developer’s mobile site or app, brings up a list of products and may include images, descriptions, prices and coupons. Spotzot gathers in-store and e-commerce coupons from more than 1,000 retailers each day; a button next to each product listing links to all that brand’s or store’s current deals and online promotion codes.

SpotAds are sponsored product results that show up in Spotzot mobile shopping feeds. There are two kinds: Exclusive SpotAds, which allow retailers or brands to pay so that only their products appear when consumers search for them on a mobile site or app connected to Spotzot, and non-exclusive SpotAds, which display a sponsored ad above a ‘You May Also Like’ list of related items from multiple stores and brands. Any ad can be targeted to location, product type or category of shopper, such as ‘women in Chicago searching for high heels under $50.’

Exclusive SpotAds are generating a 40-70% average click-through rate for clients, says Spotzot co-founder and vice president Jim Schreitmueller, while non-exclusive ads are clicked on between 5-10% of the time consumers see them. Generic, non-targeted mobile ads usually garner a 1-4% click-through rate, he says.

The ads are a compelling product because, according to Schreitmueller, whether they are exclusive or not, they all link directly to the product page of a retailer’s mobile-optimized web site, which can be essential for on-the-go mobile shoppers deciding whether to buy. “Everything is time critical,” he says. “They need a quick snack bite on the go, they want info or they want to purchase it.”

The advantage mobile commerce has over e-commerce is that most shoppers who take the time to search for a product on a smartphone or tablet already have a high intent to buy, especially if they’re using a shopping app, Schreitmueller says. “By providing that deep link they can go right to it and see all the info there, zoom, etc. That’s a very effective way to engage and delight a consumer.”

Pricing for SpotAds varies depending on the type of ad, time of year, product price and other factors, Schreitmueller says. A cost-per-click ad might begin at 25 cents. On average, the ads generate a five-to-10-times return on each dollar put into them, he says, which encourages brands and retailers to often invest between $10,000 and $100,000 on SpotAds campaigns.

The company will soon test a new price comparison feature with the ads for Best Buy, Schreitmueller says. Through the store’s shopping app, consumers will see not only Best Buy exclusive SpotAds, but any corresponding products from Amazon.com Inc., No. 1 in the Internet Retailer Top 500 Guide, with prices. This strategy is meant to combat ‘showrooming,’ which refers to consumers going into a store to scope out products using their smartphones but buying them elsewhere online, he says. As well as helping shoppers directly, store associates will be able to use the app to point out differences between Best Buy and Amazon offerings, he says. For example a product that looks cheaper on Amazon might actually be refurbished there versus new at Best Buy, or a product that costs more at Best Buy might come with accessories or a warranty that make it a better value than at Amazon, he says.

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