Narrowcasting of wireless advertising in malls

Wireless devices are personal, and the advertiser can schedule ads to reach the prospect at the proper time and place, which makes wireless advertising an ideal direct marketing tool. Industry associations, fearing a backlash from uncontrolled spam, have been careful to emphasize opt-ins. Yet the market has been more promise than reality. In spite of the possibilities of personalization, one of the major complaints has been that the ads are not relevant. Proper targeting and scheduling of wireless ads can go a long way to alleviate this problem. In a recent paper [De Reyck, B., Degraeve, Z., 2003. Broadcast scheduling for mobile advertising. Operations Research 51(4), 509–517] discuss a real implementation of wireless advertising in a shopping mall in London, and provide an integer programming model to schedule ads to various segments of prospects over a week. This model was found to be very effective in increasing response rates without saturating the devices with too many ads. We show in this paper that De Reyck and Degraeve’s model can be made more effective by utilizing information that is readily available to the advertiser. Our test runs show an improvement in the sum of ad priority value of about 150%, depending on the type of traffic in the mall. We provide two enhanced integer programming models that incrementally use additional contact history information to better scheduling of ads. Results from extensive runs are presented and managerial insights discussed.