An Empirical Study of the Drivers of Consumer Acce

AnEmpiricalStudyoftheDriversofConsumerAcceptanceofMobileAdvertisingMarkoMerisavoHelsinkiSchoolofEconomics(HSE),FinlandSamiKajaloHelsinkiSchoolofEconomics(HSE),FinlandHeikkiKarjaluotoUniversityofOulu,FinlandVilleVirtanenHelsinkiSchoolofEconomics(HSE),FinlandSamiSalmenkiviHelsinkiSchoolofEconomics(HSE),FinlandMikaRaulasHelsinkiSchoolofEconomics(HSE)MattiLeppäniemiUniversityofOulu,FinlandTableofContents●Abstract●Introduction●ConsumerAcceptanceofMobileAdvertising●ConceptualModelandHypotheses●ResearchMethod●Results●Discussion●LimitationsandFutureResearch●Conclusions●References●Acknowledgements●Appendix1:SurveyItemsUsedtoMeasureConstructsandScaling●Appendix2:Means,StandardDeviations,andCorrelationsAbstractTheubiquityoftextmessaging(SMS)basedmobilecommunicationcreatesnewopportunitiesformarketers.However,thefactorsthatinduceconsumerstoacceptmobiledevicesasanadvertisingmediumarenotyetfullyunderstood.ThispaperexaminesthedriversofconsumeracceptanceofSMS-basedmobileadvertising.Aconceptualmodelandhypothesesaretestedwithasampleof4,062Finnishmobilephoneusers.Structuralequationmodelingisusedtotestfivedriversofmobileadvertisingacceptance:(1)utility,(2)context,(3)control,(4)sacrifice,and(5)trust.Theresultsshowthatutilityandcontextarethestrongestpositivedrivers,whilesacrificeisnegativelyrelatedtotheacceptanceofmobileadvertising.Despitetheconcernsaboutprivacy,ourresultsindicatethatcontrolandtrustarenotthatimportanttoconsumersinmobileadvertising.IntroductionConsumeradoptionofdigitalmobiletelecommunicationshasinmostcountriesbeenevenfasterthanthatoftheInternet(PerladoandBarwise2005).Thenumberofmobilesubscriptionsworldwidewas2.4billionbytheendofthesecondquarterof2006(GSMAssociation2006).AccordingtoOECD,thereisnearlyonemobilephoneperpersoninmuchofthedevelopedworld(Economist2005).InWesternEurope,mobilephonepenetrationreached90%bytheendof2004,andwasforecastedtoreach100%bytheendof2007.Attheendof2004,penetrationalreadyexceeded100%inseveralcountriesincludingItaly,Sweden,andtheUnitedKingdom,asconsumersownmultiplephonesand/orSIM(SubscriberIdentityModule)cards(Analysys2005).DespitethehighpenetrationofpersonalcomputersandbroadbandInternetaccess,theUnitedStateshasbeenslowertoadoptmobilephonesthanEurope(Economist2005).AccordingtoCTIA(2005),mobilephonepenetrationintheUnitedStateswasover65%ofthepopulationin2005.InFinland,thetargetcountryofthisstudy,thepenetrationratewas103%attheendof2005(MinistryofTransportandCommunicationsofFinland2006).Themajorityofmobilephonesarecapableofsendingandreceivingtextviamobileshortmessageservice(SMS)transmission.Textmessagingisverypopular;49%ofEuropeanInternetusersfrequentlysendSMStotheirfriendsandfamily(Smith,Husson,andMulligan2005a).IntheUnitedKingdom,forinstance,2.13billionperson-to-persontextmessagesweresentinSeptember2004(MobileDataAssociation2004).InFinland,theaveragenumberofSMSmessagessentpermonthperonemobilephonesubscriptionin2004was37(MinistryofTransportandCommunicationsofFinland2005).TheubiquityofSMS-basedmobilecommunicationscreatesnewopportunitiesformarketerstoadvertise,build,anddevelopcustomerrelationships,andreceivedirectresponsefromcustomers(Sultan2005).Uptothispoint,mobileadvertisinghasmostlybeencarriedoutbymobileoperatorsand,toalesserdegree,byconsumerbrands(Virtanen,Bragge,andTuunanen2005).EventhoughwefocusonSMS-basedmobileadvertisinginthispaper,mobileadvertisingasaconceptismuchbroader.Newapplicationsandserviceslinkedtomobilephones,suchasmultimediamessaging(MMS),games,music,anddigitalphotography,haveemergedandarealreadybeingusedbysomemarketers.However,accordingtoJupiterResearch,SMSmessageswerethedominantformatofmobilemarketingcommunicationinWesternEuropein2005(Smith,Husson,andMulligan2005b).ThemaindisadvantageofSMSisits160-charactertext-onlyformat,whileMMSmessagescanincludepicturesorvideoclips.Nevertheless,bothSMSandMMSchannelscanhavepositiveeffectsonconsumers’brandrelationships(Nysveenetal.2005).DespitethepotentialofSMSasanadvertisingmedium,itsusers,volumeofusage,acceptance,andeffectivenesshavereceivedlittleattentionfromacademicsandinternationalmarketresearchinstitutes.Still,someinitialresearchexists.AccordingtoForresterResearch,inEurope’smostadvancedmobilemarkets,suchastheUnitedKingdomandFinland,morethanhalfofdirectmarketersandtheiragencieshaveadoptedSMSfortheiradvertisingcampaigns(deLussanet2004).AccordingtoA.T.KearneyandCambridgeUniversity(2003),asmanyas54%ofEuropeanconsumersreceivedSMSadvertisementsin2003;comparedto40%in2002.In2005,45%ofFinnishconsumersreceivedSMSadvertisements;whilein2004thenumberwas33%andin2001only9%(Kauhanen2005).Despitethewidespreadusage,theinitialresultsofmobileadvertisingseemquitedisappointing.Forexample,in2003only2%ofEuropeanconsumerssaidtheyhadboughtanythingasaresultofSMS-basedmobileadvertising(A.T.Kearney&CambridgeUniversity2003).However,arecentstudyshowsthatdependingonthecustomersegment,SMS-basedmobileadvertisingcanincreasesalesofmobileservices(e.g.,newsandsportsinformation,ringtones,andgraphics)upto420%(Merisavoetal.2006).Inotherwords,mobileadvertisingseemstoworkdiff