The rise of smartphones is creating smarter consumers - introducing opportunities for smarter marketing. Mobile media investments in Sweden skyrocketed by 23.3% from 2009 to 2010, exhibiting the strongest growth across all media investments. But which type of mobile advertising should marketers put their money on? What advertising format is most effective - mobile coupons or mobile banners - and can location based advertising increase the effectiveness?
To help us answer to these questions, we conducted an experiment with 365 Swedes in our target group of young smartphone consumers. We surveyed these participants using eight varying manipulations of smartphone advertising which differed based on advertising format, location based targeting, and product involvement. We asked questions evaluating brand associations and advertising value, which in turn influenced purchase intentions and word-of-mouth intentions.
What can we learn from this study?
The study suggests that mobile coupons can strengthen purchase intentions and word-of-mouth intentions more effectively than mobile banners. Location based services in mobile advertising can also increase purchase intentions. The effectiveness was moderated by stronger associations of innovativeness and perceived advertising value.
The results indicate that the choice of mobile advertising format as well as the location based feature can affect the perceived innovative associations that consumers hold towards a brand. Consumers perceive a brand using mobile coupons as more innovative than a brand using mobile banner ads. They also perceive a brand using location based ads as more innovative than a brand using non-location based ads.
Coupons and location based campaigns increase positive evaluations of the advertisement. Marketing practitioners can benefit from using location based mobile coupons in order to increase positive advertising value, as they are perceived as more informative, relevant, entertaining, and less irritating. This in turn has a positive impact on the effectiveness measures of both purchase intentions and word-of-mouth intentions.
What now?
Our study was geared towards helping marketing managers determine the best strategy to enter the mobile playground in its state in mid 2011. As technology is in a continuous state of change, marketers constantly need to find new ways to better communicate with their customers. Location is still an important characteristic of mobile as it enables precise targeting, but the future will allow for even more personalized and relevant communication through increased data capture and analysis. The newness of mobile marketing in 2011 may have been part of the reason we found brand associations of innovativeness within our study. As mobile marketing becomes standard practice, the pressure is now on today’s mobile marketers to find new ways to innovate within mobile, rather than simply benefiting from the novelty of the medium.
In order to understand how future innovation can take shape, we’ve looked at current trends in the mobile world. These include the rising consumer uptake of tablets, the close connection of mobile to social media, and the desire for brands to engage consumers via gamification. Considering the purchasing behavior of tablet users versus PC users (stronger conversation rates, higher average order values), mobile advertisers might do well to invest in specifically targeting this group, as they may see a higher ROI from the more engaged tablet consumer. As ‘social mobile’ becomes more commonplace, social amplification is an element mobile advertisers must pay attention to- they should always consider how their message can be relevant and exciting enough in order to be shared, tweeted or liked. The mobile world is also seeing brands strive to connect more loosely and frequently with consumers in a fun and engaging way through gamification in the mobile medium.
It’s a very exciting time to be in the industry, and we hope our thesis has sparked some interesting conversations around this.We are looking forward to see how brands will utilize mobile as a medium for more innovative communication in the future. A big thanks to all those who helped us along our way, ending with an inspiring word from our tutor Micael Dahlén: "The future will be fantastic because we expect it to be.”
This trend insight is written by the winners of Prime & United Minds’ thesis competition “Uppsatsstipendium 2012”, Carolina Appelqvist and Julie Miller. If you want to read more about this competition and read the full version of the winners' thesis please visit www.primelab.se/uppsatsstipendium
