Mobile advertising is a powerful tool for direct and interactive marketing. However effective marketing requires examining consumers’ psyche. This study proposes a hierarchical utility package (in the consumers’ perception) with reference to mobile advertising, thus enhancing its acceptance. Confirmatory factor analysis revealed four consolidated utility dimensions (with reference to mobile advertising). Binary logistic regression was used to create a hierarchical utility package with respondents giving the highest priority to Customization rather than Location based messaging, followed by Incentives and Session based messages. By incorporating the utility package in the mobile advertising format, mobile advertisers can ensure greater acceptance and develop competitive advantage.
TopIntroduction
Researchers and practitioners agree that the most explosive growth in telecommunications has occurred in internet and mobile telephone services (Lehr & McKnight, 2003). Combining these two technologies, the internet-enabled mobile device has become one of the most promising advertising media around (Okazaki, 2006). For example, SMS (short message service) direct marketing is a popular campaign method worldwide. The Wireless Industry survey results by the Wireless Association (2009) have revealed that the consumer spending on text messaging in the United States reached 95 billion messages reported in the month of June 2009 alone - about 3.2 billion messages a day. This represents an increase of 140% over the last year (Wireless Association, 2009).
Consumer adoption of digital mobile telecommunications has in most countries been even faster than that of the Internet (Perlado & Barwise, 2005). The number of cell phone subscriptions across the globe reached 4.6 billion at the end of 2009 and they are expected to hit 5 billion sometime in 2010, according to the International Telecommunication Union (ITU) (http://www.ctia.org/media/industry_info/index.cfm/AID/10323). It is expected to reach 100% by 2013 according to SNL Kagan (SNL Kagan Essential Media & Communication Intelligence, 2007).
Text messaging is very popular; in the United Kingdom, on an average 265 million text messages and 1.6 million picture messages were sent daily in 2009. The total number of text messages was 96.8 billion, while over 600 million picture messages were sent across the whole year (Mobile Data Association, 2010). The ubiquity of SMS-based mobile communications creates new opportunities for marketers to advertise, build, and develop customer relationships, and receive direct response from customers (Sultan & Rohm, 2005). Mobile advertising has mostly been carried out by mobile operators and, to a lesser degree, by consumer brands (Virtanen, Bragge, & Tuunanen, 2005).
Although the focus is on SMS-based mobile advertising in this paper, mobile advertising as a concept is much broader. New applications and services linked to mobile phones, such as multimedia messaging (MMS), games, music, and digital photography, have emerged and are already being used by some marketers.