1 Special Features of Mobile Advertising and their Utilization Jaana Tähtinen1 and Jari Salo Department of Marketing, University of Oulu, Finland Track: Marketing Communications Keywords: mobile advertising, content analysis Acknowledgements: The financial support of the National Technology Agency of Finland is gratefully acknowledged. The authors wish to thank the organisations, whose invaluable collaboration has made this work possible.
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P.O.Box 4600, FIN-90014 Oulun yliopisto, Finland, tel. + 358 553 2586, fax +358 553 2906,
[email protected]
2 Special Features of Mobile Advertising and their Utilization Abstract This study focuses on permission-based mobile advertising (m-advertising) and its specific features that make it different form other forms of advertising. However, as m-advertising is a novel approach, advertisers or advertising agencies do not know how to use it’s full potential. Therefore, the paper explores retailers’ use of mobile advertising in Finland and discusses the features of mobile advertising that retailers utilised as well as those remaining unused. The study also suggest ways to fully utilise the potential of mobile advertising. Introduction Mobile advertising, or m-advertising, refers to ads sent to and presented on mobile devices, i.e. cellular phones, PDA’s, and other handheld devices.2 M-advertising can be seen as a part of mcommerce (see e.g. Mennecke & Strader, 2003), which is seen as a radically different from traditional commerce (see e.g. Choi, Stahl, & Whinston, 1997). Thus, it can be argued that madvertising is also different. M-advertising enables not only sending unique, personalised and customised ads (Turban et al., 2002) but also engaging consumers to discussions and transactions with the advertiser. Any retailer can make use of m-advertising. Thus this study focuses on the brick and mortar retailers’ use of m-advertising in Finland. In Finland, mobile phone subscriptions reached 84 % of the population at the end of the year 2002 (Ministry of Transport and Communications Finland, 2003) and more than 30 % of the users under 35 years and over 20 % of all users have received m-advertising in the form of SMS (www.opas.net/suora/mob%20markk%20nous.htm). However, there are no commercial solutions available for MMS type of m-advertising. Therefore, the empirical setting of this study is a service system SmartRotuaari, which is a part of a research project (see Ojala et al. 2003, www.rotuaari.net) offering the retailers an infrastructure and a service system for context dependent m-advertising in the city of Oulu in Northern Finland. This study focuses on permission-based m-advertising. In Finland, that is the only form of madvertising that is legal. Firstly, we will discuss the features of m-advertising that make it unique. Secondly, we will present some empirical results from the SmartRotuaari case. We discuss the features that retailers were able to utilise as well as those remaining unused. The study concludes by suggesting how retailers could improve the use of m-advertising in order to fully harness the power embodied in m-advertising. Factors influencing the success of permission-based m-advertising Based on existing research and the empirical data gathered for this study, we suggest a framework that describes the factors that influence the success of retailers’ use of m-advertising. The factors are related to the media or advertising channel itself and its special features, and to the receiver of the messages, i.e. the individual customer and her/his goal in using the mobile device. Because of the special features, m-advertising can and should be used to deliver ads which are different from the traditional ones. The special features include: the personal nature of the de 2
Mobile advertising can be used to refer to advertisements that move from place to place, i.e. in busses, trucks, trains, etc. (see e.g. Hume 1988, Goldsborough, 1995).
3 vice, the interactivity that the device enables and the context dependency that the infrastructure enables. The features influence the type of content that permission based m-advertising should offer to the consumer in order to be perceived as valuable and/or entertaining. The value of the content is also related to the individual’s needs and reasons for using the media, i.e. media goals (Juntunen, 2001). A person may use a mobile device to receive information but also for a purpose of personal entertainment. Both these goals influence the expectations s/he has for the mobile ads. Unless the consumer perceives permission-based m-advertising positively, s/he can deny the company or any company the permission to send ads to her/him. Thus it is vital for a madvertiser to be aware of the special features and the requirements that the features set for the content of the ads as well as for the segmentation or almost individual targeting of the ad. In the following sections we will take a closer look at each of the factors as depicted in Figure 1.
Figure 1: The factors influencing the success of permission-based m-advertising Personal nature of m-advertising M-advertising is as personal as personal selling. Mobile devices, especially mobile phones are highly personal devices, with personally selected or even self-composed ringing tones, individually tailored covers or general appearance and additional decorations, not to mention the ‘content’ of the phone including information on personal friends as well as personal calendar. Moreover, the users wear their device almost everywhere and every time. Thus the personal nature of the device is transferred to the information that is sent and received through the device (see also Barwise & Strong, 2002). Therefore, m-advertising is not for masses but for individuals. Interactive nature of m-advertising The mobile device allows m-advertising to be highly interactive i.e. the parties can act on each other, on the communication medium, and on the messages (Liu & Shrum, 2002). A customer may reply to an ad by phoning, sending a SMS, MMS or an e-mail, or logging into the advertiser’s web page by using the mobile device. In addition, a customer may distribute the ad to her/his friends. Such viral marketing is very beneficial for the advertiser, as the customer forwarding the ad her/himself becomes the sender of the message and therefore the message gains in credibility. Context awareness of m-advertising The first context to be taken into account is the device to which the advertisement is distributed. Unless the message is tailored to the terminal, the receiver will face problems in receiving and
4 understanding the message. Even if such problems are avoided, the devices have a relatively small screen size, limited screen colours, and limited battery time. However, the technology used in building m-advertising systems enables context awareness. The context may be location, time and/or weather. For example, the m-advertising service is able to locate the user’s mobile device and send an ad only when the customer walks by the retailer’s shop. An individual’s media goals An individual’s goals are often referred to as a person’s cognition of what s/he is pursuing in a particular situation and to an associated inner state of arousal (see e.g. Eysenck, 1982; Pervin, 1989). Thus an individual’s media goal is her/his cognition of the processing goal s/he is pursuing when attending to her/his mobile device (see Juntunen, 2001), which in this case is the medium for m-ads. Depending on what type of goal the receiver is trying to achieve by using a mobile device also affects her/his processing of the ads. If the user’s the media goal is information, the customer will be more interested in ads that provide her/him relevant information on products/services or companies. On the other hand, if the customer’s goals are more towards entertainment, s/he will enjoy ads that are entertaining and provide experiential satisfaction through aesthetic pleasure, emotional stimulation, or social experience (see also Barwise & Strong, 2002). A consumer may wish to achieve both kinds of goals at the same time, and the relative importance of the types may change according to the situation that s/he is in. In the above, we have discussed the features that make m-advertising a unique form of advertising as well as the ways users are using their mobile devices. Together they place m-advertising closer to personal selling than traditional advertising – having the same message sent to many receivers with limited control over the context. Since m-advertising is so personal, it sets new kinds of demands for the advertising planning. We will now move into considering how to plan m-advertising, i.e. targeting and planning the content of the ad. Targeting the ads It is possible to target m-advertising if the retailer can make use of the user specific information, which is added to the m-advertising service system. This can be done through two different, but complementary ways. Firstly, each user, when granting the permission to send ads also fills in a user profile, that can include demographic details, user’s current mood (e.g. is s/he hungry, looking for fun, shopping etc), and areas of personal interest (e.g. fashion, food, hunting etc.). All this can be done directly form the user’s mobile device. Secondly, the retailer may use existing data from the company’s Customer Relationship Management (CRM) database, which can be connected to the mobile user’s personal customer number. Moreover, the system may obtain up to date weather information from a local weather station via Internet. It is thus possible to send ads of sunglasses only when the sun is actually shining. In addition, time can be used in targeting. In the morning restaurants can send special breakfast offers or in the evening they can send discount coupons for a dinner if there are seats available. A well-planned execution of m-advertising can be more effective than e.g. direct mail (which is often left unopened) or television advertising, although the number of receivers that see the ad is considerably smaller. Based on the targeting options, the retailer can send ads that match with the mobile user’s personal interests and current needs, making sure that the customer will only receive ads that s/he is willing to. This is extremely important in permission-based m-advertising, since spam messages annoy the receiver (see also Barwise & Strong, 2002; Edwards, Li & Lee, 2002). Therefore, the advertiser can reach high view-through rates by targeting the ad successfully. In SMS m-advertising, 81 % of all triallists viewed all messages before deleting them and
5 77 % did that as soon as they received the ad (Barwise & Strong, 2002). At the same time, this means that the same ad should only be sent to each customer once during a campaign. If the campaign contains repetition, the m-ads have to be different each time they are being sent to the same consumers, otherwise they can annoy the consumer. Advertising content As for the content of adverts, the advertiser in any type of advertising has to decide what is being said and how to say it. Both these decisions effect the success of m-advertising as well. Kalakota and Robinson (2002) suggest that m-ads work best if customers receive concrete benefits from it, such as retail alerts, coupons, special offers, and m-tickets. However, Barwise and Strong (2002) found six types of ads used in SMS permission-based m-advertising, ranging from messages directed to long term effects (like brand building) to messages attempting to engage the receiver in immediate interaction with the advertiser (competitions, votes). By applying the information given by the consumer and/or information retrieved from the CRM databases, the advertiser can also provide quick and timely information (i.e. news that interest the receiver). The existing research being scarce, we do not know which type of ads are the most effective ones. The style of the ad is also an important issue to be considered. Duchnicky and Kolers (1983) suggest that reading from mobile devices may take more time and effort than reading from a desktop computer. Because of that, and also due to the space limitations, the copy should be kept short and the use of graphics or photos is encouraged (see Edens & Cormick, 2000). Humour and surprises in the design of the ad create positive feelings toward the advertisement and may lead to viral marketing, especially among the younger receivers (Barwise & Strong, 2002). Furthermore, we assume that the personal nature of the mobile devices as well as the context specificity and novelty of m-advertising will lead consumers towards high involvement. In such situations the contrast effect appears to stimulate consumers to process the advertising even more (De Pelsmacker, Geuens, & Anckaert, 2002). Retailers’ use of permission-based m-advertising The empirical part of the study is derived from the SmartRotuaari service system. The system provides a functional framework for large-scale field trials for the purpose of empirical evaluation of technology, new mobile services, customer behaviour and retailers’ use of the services (for more details see Ojala et al., 2003, www.rotuaari.net). The retailers use a web portal to send ads, which are then delivered through WLAN network to consumers’ mobile devices, in this trial the PDAs. The m-ads analysed in this study were used during the first field trial of the SmartRotuaari, which began the 28st of August and ended the 30th of September, 2003. The data consists of 42 m-ads that were sent to trial users (186 persons) by 12 retailers (shops, bars, restaurants, cafes etc.). The ads were analysed using content analysis as it is the standard analytical tool for advertising studies (see e.g Kassarjian, 1977; Kolbe & Burnett, 1991). As suggested by Kassarjian (1977), four coders (A,B,C, and D) analysed the commercials. However, due to confidentiality of the data, the authors served as coders as well. The authors provided the coders A and C instructions and a brief training before they commenced the task. Since the number of ads was relatively small, all disagreements between the two pairs of coders were solved through discussion (see Kassarjian, 1977). Since the coders were able to agree on all the decisions, no measure of interjudge reliability was calculated (see Perreault & Leigh, 1989) All m-ads used the company location as the focal point from which the distance that triggered the sending of an ad was measured. However, there were huge differences in the way the retailers
6 used the location awareness. The distance used varied from 75 meters to 3000 meters. The diameter of the town center in Oulu is below the 3 kilometres, so the use of the highest distance in the location awareness does not aid the targeting of the ads. The time awareness according to certain hours of the day (e.g. opening hours, lunch hours) was used in only 18 ads, although it could have been used in every ad, so that customers would receive ads only during the opening hours. Most used feature of the consumer that the retailers used in targeting was the age. Only some clothing shops and a few restaurants did not use it. The bars and pubs especially targeted the ads towards either the younger or the more mature customers. The mood information was used in 65 % of all the ads. Especially the clothing shops and cafeterias selected customers in shopping mood and bars and restaurants people who were hungry, thirsty, seeking company, or in a mood to party. As for the consumers’ interest areas, only 14 ads included certain interest areas as criteria for targeting. None of the 42 ads used the local weather as a criteria for sending the ad. We also analysed the content of the ads. 55 % of the ads contained either photos (people, product or the interior of a restaurant) or graphics. The copy length ranged from 0 to 31 words. As the ads were received on PDA’s, even the longest copy was readable, but it did not provide an aesthetic pleasure. From the ads, there was only one that was classified as brand building, but this is easily explained by the fact that all the advertisers were retailers, and thus most of the ads concentrated on describing the shop or the restaurant (e.g. what type of food was served). Many ads (40 %) included their contact address (only three with phone number), although it was possible for the consumer to use a mobile map to locate the company. Moreover, 45 % of the ads contained information on opening hours, which explains the fact that many advertisers did not use the option of sending the ad during the opening hours only. One third of the ads included price information or special offers, thus responding to the consumer’s relevant information needs. Moreover, only 3 ads addressed the receiver in the copy by asking them a question (“Are you hungry?”) or by welcoming them to the cafe. The retailers used very traditional profiling criteria such as the age of the customer. We can also argue that although mood or interest areas are not really a criteria that can explicitly be used in e.g. magazine or newspaper advertising, it is used implicitly when choosing the magazine (e.g. interior magazines) or placing the ad under ‘entertainment’ section. Also in the content of the ad, the traditional newspaper advertising was clearly the point of reference when retailers designed the m-ads. How to fit the message and the format into the context of m-advertising is a question to be solved also in the advertising agencies (see e.g. Kiani, 1998; Kunoe, 1998). Conclusions and implications This study on retailers’ usage of permission-based mobile advertising underlines the notion that mobile advertising is different from any other form of advertising, even from direct advertising in its current forms. Thus, both the receivers and the senders of mobile advertising messages have to learn how to use this new channel and how to fully make use of the opportunities is offers for speedy, personal, and interactive advertising communication with the consumer (see also Pura, 2002). In time, we are sure that m-advertising will move more and more towards mcommunication, although the messages that are being exchanged will be commercially related.
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