ABSTRACT: the customer acceptance toward mobile advertising via

ABSTRACT:

The
ubiquity of text messaging (SMS) based mobile communication creates new
opportunities for marketers. However, the factors that induce consumers to
accept mobile devices as an advertising medium are not yet fully understood.
This paper examines the drivers of consumer acceptance of SMS-based mobile
advertising. A conceptual model and hypotheses are tested with a sample of
4,062 Finnish mobile phone users. Structural equation modelling is used to test
five drivers of mobile.

INTROCTION:

An Empirical Study Of The… (Annabelle
Parameter Ratihayu et al) 1 AN EMPIRICAL STUDY OF THE DRIVERS OF CONSUMER
ACCEPTANCE OF MOBILE ADVERTISING (SHORT MESSAGE SERVICES) IN INDONESIA
Annabelle Parameter Ratihayu1 ; Lit Agustina2 ; M. Farman Baihaqi3 ; Andreas
Raharso4 ABSTRACT Today, mobile marketing has been used for ‘a new media’ to
advertise any marketing campaign for the company. In Indonesia, we can find a
lot of mobile marketing campaign via mobile device and usually mentioned as SMS
advertising. Many researchers have proven how good the effect of mobile
advertising, the acceptance, and also consumers’ attitude of the impact of SMS
advertising. In this paper we explore and do the research about the consumers’
acceptance toward advertising via mobile device. In addition, for the research
we use several variables that were: consumers’ utility, consumers’ utilization
of contextual information, consumers’ control, consumers’ sacrifice, consumers’
trust, and the last is frequency of exposure about the mobile advertising itself.
This research is done using questionnaire to find out the Indonesian customer
acceptance toward mobile advertising via mobile device. The result of this
research tells that customer utilities, contextual, control, sacrifice, and
trust of the SMS advertising are significantly affecting the acceptance about
receiving mobile advertising; The frequency of exposure from SMS advertising
are not significantly affect the customer acceptance toward mobile advertising
via mobile device. With this result mobile advertising via message can deliver
effectively and meet the company objective.

 

 Advertising acceptance:

(1)utility, (2) context,
(3) control, (4) sacrifice, and (5) trust. The results show that utility and
context are the strongest positive drivers, while sacrifice is negatively
related to the acceptance of mobile advertising. Despite the concerns about
privacy, our results indicate that control and trust are not that important to
consumers in mobile advertising. Consumer adoption of digital mobile telecommunications
has in most countries been even faster than that of the Internet (Perl ado and
Barwise 2005). The number of mobile subscriptions worldwide was 2.4 billion by
the end of the second quarter of 2006 (GSM Association 2006). According to
OECD, there is nearly one mobile phone per person in much of the

developed world (Economist
2005).

Text messaging is very
popular;

49% of European Internet users frequently send SMS to
their friends and family (Smith, Husson, and Mulligan 2005a). In the United
Kingdom, for instance, 2.13 billion person-to-person text messages were sent in
September 2004 (Mobile Data Association 2004). In Finland, the average number
of SMS messages sent per month per one mobile phone subscription in 2004 was 37
(Ministry of Transport and Communications of Finland 2005). 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 2005). Up to this point, mobile advertising has
mostly been carried out by mobile operators and, to a lesser degree, by
consumer brands (Virtanen, Bragged, and Tunnel 2005). Even though we focus 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.

 

Advertisements in 2003;

Compared
to40% in2002,In2005, 45% of Finnish
consumers received SMS advertisements; while in 2004 the number was 33% and
in 2001 only 9% (Kauhanen 2005). Despite the widespread usage, the initial
results of mobile advertising seem quite disappointing. For example, in 2003
only 2% of European consumers said they had bought anything as a result of
SMS-based mobile advertising (A.T. Kearney & Cambridge University 2003).
The purpose of this study is to examine the drivers of consumer acceptance of
SMS-based mobile advertising. Our conceptual model and hypotheses are tested
with a survey of 4,062 mobile phone users in Finland.

 First we discuss consumer acceptance of mobile
advertising and present our conceptual model and hypotheses. The research
method and results obtained follow in the next two sections. Finally, the paper
concludes with a discussion of the results, the academic and managerial
implications, and suggestions for future research. Consumer Acceptance of
Mobile Advertising As consumers are increasingly exposed to mobile advertising.

 One of the first empirical studies was bar
wise and Strong’s (2002) study of incentive based mobile text message (SMS)
advertising in the United Kingdom. The results showed that almost all
respondents were satisfied or very satisfied.

Bar
wise and Strong (2002) suggested that mobile advertising works best for
marketing simple and inexpensive products and services. Since mobile phones are
very personal devices, mobile advertising can often be regarded as intrusive,
although relevance and added value (e.g.,
discounts or special offers) can increase consumer acceptance (Patel 2001).

 Acceptance was significantly correlated with
campaign interest, campaign relevance, and monetary incentives. Research on
consumer acceptance of mobile advertising and related issues has often been
conducted using structural equation modelling. The results from empirical
studies of four mobile services (text messaging, contact, payment, and gaming)
with 2,038 respondents by Nysveen, Pedersen, and Thorbjørnsen (2005) showed
that perceived enjoyment, perceived usefulness, and perceived expressiveness
had a strong overall impact on consumers’ intentions to use mobile services.

While
perceived usefulness was found to be a general antecedent for consumers’
intentions to use all kinds of mobile services, enjoyment, for instance,
appeared to be particularly important as a driver for using experiential
services like contact and gaming services. A recent survey (1,028 respondents)
by Bauer et al. (2005) identified entertainment value and information value as
the strongest drivers of mobile advertising acceptance. They argued that
consumers develop a positive attitude towards mobile advertising – which in
turn leads to the behavioural intention to use mobile services – only if mobile
advertising messages are creatively designed and entertaining, or if they
provide a high information value. Furthermore, Para’s (2005) survey on
location-based SMS services found that conditional value (i.e., context),
commitment, and monetary value had the strongest influence on behavioural
intentions to use mobile services. Conceptual Model and Hypotheses In this
section we develop our hypotheses and a conceptual model based on the previous
discussion on consumer acceptance of mobile advertising and additional relevant
issues related to the specific nature of the mobile phone as a medium.

Many
of the studies discussed above identified perceived usefulness, relevance, and
monetary incentives, as well as entertainment and information value, as
important factors affecting consumer acceptance of mobile advertising. Together
these form the total utility that consumers perceive in mobile marketing.

43 Journal
of Interactive Advertising Spring 2007 H1:

Consumers’
perceived utility of mobile advertising is positively related to their
willingness to accept mobile advertising. Consumers carry their mobile phones
almost everywhere, which creates new opportunities for marketers. This can be
useful to both marketers and consumers. It has been suggested that when using
mobile services or receiving mobile advertising messages, consumers perceive
value in relation to the utilization of time and place (i.e., contextual
information) (Heinonen and Strandvik 2003; Pure 2005).

For
example, with location-based mobile services, the location of a single consumer
at a given time can be identified and mobile advertising made contextually
valid (e.g., a dinner offer when passing by a favorite restaurant in the
evening), which in turn can provide more value for the consumer. In the literature
this is often referred to as “conditional value” that depends on the
context and occurs and exists only within a specific situation (Holbrook 1994).

Consumers’ utilization of contextual information in
mobile advertising:

positively
related to their willingness to accept mobile advertising. In many countries
mobile advertising is permission-based by law in order to keep mobile phones
clear of spam. Accordingly, mobile advertising basically follows the ideas of
permission marketing (see Godin 1999). As mobile phones are very personal
devices, consumer perceptions of controlling that permission as related to the
mobile advertising (e.g., how many messages they receive in a given period)

Consumers’
perceived control of mobile advertising:

Positively
related to their willingness to accept mobile advertising. It has been
suggested that consumers’ risk perceptions can strongly determine their behaviour
(Mitchell 1999). This may also be the case with mobile advertising. Although
consumers have given their consent to receive mobile advertising, what they
actually get may not necessarily match their expectations. Therefore, they
might perceive various risks (e.g., privacy, unsuitable content) or even feel
irritated when receiving the communication (Bauer et al. 2005; Tsang, How, and
Liang 2004). These risks and annoyances represent disadvantages (or sacrifices)
that the consumers associate with mobile advertising.

The
consumers’ perceived utility of mobile advertising:

And
the willingness to accept mobile advertising was found. Also, Hypothesis 2 was
supported, as a strong positive path (?= .27) from the utilization of
contextual information to the willingness to accept mobile advertising was
found. However, the consumers’ perceived control of mobile advertising did not
significantly affect their willingness to accept mobile advertising (?= .03),
and therefore our Hypothesis 3 was not supported. This finding might indicate
that consumers take it for granted that marketers do not send them mobile advertising
messages without their permission, and thus the whole question of control is
less important to them. However, this finding warrants further research,
especially in countries where the legislation concerning permission is
different. In Hypothesis 4 we predicted that the consumers’ perceived sacrifice
is negatively related to their willingness to accept mobile advertising. Our
study supported this hypothesis, as there was a strong negative path (?= -.32)
between perceived sacrifice and the willingness to accept mobile advertising.

 Together, all five constructs explain 63% of
the variance observed in the acceptance of mobile advertising. This result
provides confidence that the model is appropriate.  Our results show that perceived utility and
perceived sacrifice are of great importance in mobile advertising, being
consistent with the general notion that customer-perceived value can be
regarded as a ratio between perceived benefits and perceived sacrifice (Monroe
1991; Zeithaml 1988). The importance of the utilization of contextual
information was emphasized as well, which implies that mobile advertising would
benefit from being location-, time- and consumer profile-specific. However, the
results also suggest that perceived control and perceived trust are not very
important drivers of consumer acceptance of mobile advertising. 46 Journal of
Interactive Advertising Spring 2007 DISCUSSION Our research makes a number of
academic and managerial contributions. On the other hand, the study indicates
that consumers’ perceived control of mobile advertising is not a strong
contributor to their willingness to accept mobile advertising. Perceived
sacrifice was negatively related to the acceptance of mobile advertising, and
so marketers should avoid any mobile advertising that consumers might find
irrelevant or irritating. Despite increasing concerns about privacy and the
protection of personal data in the public debate, this study finds trust for
the appropriate use of personal information by marketers and mobile operators
to be a relatively weak driver of the acceptance of mobile advertising.
Furthermore, while previous literature on permission marketing emphasized the
consumers’ control over the marketing, our study indicates that consumers might
take it for granted that marketers do not send them mobile advertising messages
without their permission, and thus the whole question of control is less
important to them. These perceptions, however, may vary in different countries
with different legislation and dissimilar ways of conducting mobile
advertising. In Finland consumers are well protected by law from unsolicited
mobile advertising.

 

 

The
respondents might see mobile advertising:

 As more acceptable than other samples would.
We would suggest future studies to test the external validity of our findings.
The third limitation of the paper concerns the use of confirmatory factor
analysis, which is based on a domain sampling paradigm with LISREL. The concern
is that the study constructs can in some circumstances be criticized as more
formative than reflective by nature; as a result the indicator variables can
have the weakness of measuring different aspects of the latent variables (see Geffen,
Straub, and Boudreau 2000) instead of the same aspect. When using a domain
sampling paradigm the indicator variables should be highly correlated and thus
exchangeable. In the present study both of these criteria were met, which can
be seen from the high correlation between the indicator variables and scale
development. The scale development was based mainly on modifying existing
scales used in similar studies that were also conducted with LISREL. Even
though the scale purifying can be considered valid, future studies should
validate the findings by testing the model with other structural equation
programs such as PLS (e.g., Chin 1998). Moreover, further work is required to
develop the scaling procedure and to examine the impact of scale modifications
on how well a modified scale performs in this new context under investigation
(see e.g., Rossiter 2002). CONCLUSIONS Overall, our study indicates that
marketers should pay particular attention to the utility and relevancy of
mobile advertising messages.

 For example, mobile advertising should provide
consumers with either useful information or a way to 47 Journal of Interactive
Advertising Spring 2007 save time or money based on the consumer’s situation,
location, or personal profile. Prior research has also found that the perceived
relevance of mobile advertising is related to changes in purchase intention (Retie,
Grand colas, and Dakin’s 2005). Thus, future research should focus on the
content of mobile advertising messages and their effect on both the acceptance
of mobile advertising and the purchase behaviour of targeted consumers.
Finally, given the additional importance of trust on acceptance, it is no
surprise that the most successful mobile marketers worldwide are well-trusted
brands like Coca-Cola, McDonalds, and mobile operators, which have successfully
incorporated the mobile channel into the promotion of their goods and services.
Based on these facts it seems that it is much easier for a customer to get into
a dialogue with a well-known and established brand than with an unknown one.

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