Abstract
Mobile advertising holds strong promises to become the most highly targeted advertising medium offering new ways to target messages to users. By utilizing mobile advertising, companies can run marketing campaigns targeted to tens of thousands of people with a fraction of the costs and time in comparison to other direct marketing mediums. However, as mobile advertising is a novel approach, many aspects of it still need further investigation. Little is known regarding the effectiveness of mobile advertising campaigns and the factors contributing to their success. This chapter aims to provide a comprehensive understanding of the advertising space and its influencing factors. First, the study investigates factors that influence mobile advertising from both the industry’s and consumer’s point of view. Second, based on a review of previous studies in the field, the author proposes a conceptual model for mobile advertising, which categorizes the factors in different groups and provides a holistic view of their impact in the mobile advertising space.
TopBackground
Advances in mobile technology have changed the business environment significantly. Devices and systems based on mobile technologies have become a common place in our everyday lives (Balasubramanian et al., 2002), increasing the accessibility, frequency and speed of communication. As a result, mobile technologies have the potential to create new markets, change the competitive landscape of business, create new opportunities, and change existing community and market structures (Stewart & Pavlou, 2002).
Today's development in information technology helps marketers to keep track of customers and provide new communication venues for reaching smaller customer segments more cost effectively and with more personalized messages. This resulted in two major changes of permission marketing and targeted marketing in marketing communications environments (Kotler et al., 2005). Developments in information technology are speeding up the shift towards permission marketing (Godin, 1999), and at the same time marketers are shifting to targeted marketing. As a result, modern advertisers are increasingly relying on various modes of interactive technology to advertise and promote their products and services (Pavlou & Stewart, 2000). Gradually, many companies are redirecting their marketing spending to interactive marketing, which can be focused more effectively on targeted individual consumer and trade segments. Despite this, potential customers so far did not have the opportunity to signal their likes and dislikes with marketing activities via mobile devices. This puts marketers at a high risk (Robins, 2003) as they are unsure whether their marketing activities cause positive or negative reactions by the customer.
There are a couple of reasons why many experts consider mobile advertising as an encouraging branch of mobile business (Bulander et al., 2005): high penetration rate of mobile terminals, mobile terminals as personal communication devices, individually addressable, multimedia capabilities and interactivity. However, there are also some serious challenges when talking about mobile advertising, such as spam, limited user interface, privacy concerns, and the expense of mobile data communication. The mentioned features and challenges of mobile advertising show an area of divergence: personalized advertising requires sensitive information about the end user, his fields of interest, latest activities or his current location. On the other side, there are privacy concerns when providing this information for a mobile advertising application.
Key Terms in this Chapter
Consumer Purpose: the degree to consumer’s acknowledgment of what he is pursuing in a particular situation to satisfy
Device Interface: enabling features in device hardware or software which allows consumer to interact
Media Price: the cost associated to interact with media
Consumer Performance: the degree to consumer’s reactions or respond
Media Process: the steps required to enable delivery and collection of interaction between consumers and media.
Device Intelligence: mobile technologies which enhance communication through the mobile medium to a more intelligent and richer means of communication.
Media Policies: rules and regulations around media.
Consumer Privacy: the degree to which consumer’s personal information is not known by others
Message Content: communication exchanges between advertisers and consumers
Device Interactivity: facilitation of one-way and two-way communication through applications
Message Credibility: consumers’ perception of the truthfulness and believability of message in general
Message Customization: mapping and satisfying the customer’s goal in a specific message.