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A study of effectiveness of mobile ads & smarphone consumer attitude towards it

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In this report author attempt to discuss in detail the direction in which Mobile Advertising is heading in India and try to establish consumer attitude towards acceptance of Mobile advertising. …

In this report author attempt to discuss in detail the direction in which Mobile Advertising is heading in India and try to establish consumer attitude towards acceptance of Mobile advertising. Further we try to establish how effective this medium really is vis a vis consumer mind space.

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  • 1. 1 Consumer Attitude towards Mobile Advertising in India & It’s Effectiveness Under the Guidance of Dr. Mahim Sagar Submitted by Vijayendra Dwari, Nitin Nanda, Rajeev Kumar INDIAN INSTITUTE OF TECHNOLOGY DELHI
  • 2. 2 Table of Contents Introduction 3 Literature Review 4 Research Gap & Problem Definition 6 Research Objective 6 Research Design And Methodology 6 Organizational Sample, Data Collection And Respondents 6 Findings And Interpretation 7 Implications Of The Study/Research 10 Conclusion & Limitations 10 References 11
  • 3. 3 Introduction Mobile advertising is the newest kid on the block as a medium to reach consumers. It is a subset of digital advertising and is still at an early stage in India. Advertisers have a number of options available, and the usage of a particular medium is largely dependent upon factors like the product itself, the target consumer and many other factors like the stage of product lifecycle the product is in at currently. Every advertising campaign revolves around communicating a central idea. From the strategic point of view it’s important to select the right medium to reach the consumer among the various array of mediums available i.e – Radio, Print, Internet, Outdoor, Mobile etc. The traditional mediums are passive in nature and don’t offer advertiser an opportunity to interact with consumer. In India today, the mobile explosion is drastically changing the face of digital marketing. Three major factors are shaping up the future of digital marketing in India – The drastic rise in the use of mobile Internet, Increasing penetration of smart phones & the impending broadband revolution. [4] Figures in Million Total no. of subscribers 930 Internet User base 213 Mobile Internet User base 130 Mobile Internet User urban 103 Mobile Internet User Rural 27 Source IAMAI industry report Dec 2013* [1]  Compared to the 0.4% mobile internet users in 2012, the penetration has grown to 2.4%, indicating a substantial growth in the mobile internet user penetration levels.  In Rural India, 70% of the active internet users also access internet using mobile phones, while 32% use internet only through mobile. The Community Service Centers and Cyber Cafes are the main point of access for 40% of them.  63 percent of consumers are accessing internet on their mobile at least once a day.
  • 4. 4 Further on the table below gives a comparison of advertising spends across various digital advertising avenues projected as on April 2013. Ad spends across subcategories of Digital Advertising [5] The actual figures however exceeded expectations and touched 300 cr in 2013. Moreover it is expected to grow by 43 % and touch 430 cr in 2014. [4] [7] In this report, we attempt to discuss in detail the direction in which Mobile Advertising is heading in India and try to establish consumer attitude towards acceptance of Mobile advertising. Further we try to establish how effective this medium really is vis a vis consumer midspace. Literature Review All about mobile advertising Advertisements that are transmitted and consumed on mobile phones and/or tablets are commonly considered under this category. IAMAI in its March 2013 report identifies mobile advertising distributed among the following types of ads  Mobile Web ads  SMS  MMS  Mobile Video & TV ads  In-App ads. [IAMAI, March 2013] For a particular category of consumers mobile as a medium holds the distinction of being the media with maximum time exposure. It’s inherently difficult to separate a man and his mobile phone. Even in the most developed countries mobile until very recently was predominantly being used as a medium of engagement and not reach. With more than
  • 5. 5 950 million consumers in India, who can be reached with Video, Gaming, Audio on their phones in an extremely personalized manner, this medium is being recognized and used as a reach medium as well [4].Mobile is the only medium today which can deliver high reach, efficiency and engagement in a very personalized manner. Shenoy & Salvendy have categorized types of mobile advertising based upon communication method adopted; they fall in two broad categories called Push and Pull advertising [2] [3].  Push advertising: Advertisers proactively sends information to the user, One such example is as the British mobile advertising platform Celltick, which presents advertisements when a user's cell phone is in standby mode. If the user is interested in the advertisement, it can be directly clicked on.  Pull advertising: Advertisers links users to a Web site and learns more about the users' habits and preferences through an interactive process. This allows effective communication of relevant advertising messages, often marketing to customers via promotions and coupons. For example, Turkish mobile operator Turkcell-Tonla Kazan allows users to register as members on the site and agree to receive advertisements for certain goods or services. It then sends advertisements and information about relevant product promotions and coupons in accordance with the member's personal information [3]. Mobile advertising ecosystem In this ever changing technology ecosystem the rise of ad networks and ad exchanges facilitate the power to target users based upon location, operating system, device type, frequency etc. while advertisers can control their bids and target their audiences basis their interest and behavior, Technological innovations like Real Time Bidding make it possible for advertiser to win ad bids basis their bid price for every exposure to a targeted consumer. Figure 1.1 depicts the mobile advertising ecosystem with availability of features *DSP Platform – Demand Side Plaform, **SSP Platform – Supply Side Platform
  • 6. 6 Research Gap & Problem Definition Various industry reports and the statistics show clearly that mobile advertising is growing and is here to stay, while much is being said about future of mobile advertising in India, and various reports and articles are available about adoption of mobile advertising from a technology point of view, we feel that the need to establish the consumer attitude towards mobile advertising and its overall effectiveness is very important. From advertiser’s point of view it’s very important to understand the consumer attitude and how exactly he likes to interact with brands within the mobile environment. Research Objective The following are the two main objectives of this research, 1) Establish consumer attitude towards mobile advertising 2) Establish the effectiveness of mobile advertising Research Design and Methodology This study focuses upon the opinions of respondents from New Delhi Mumbai and Bangalore .Many factors were evaluated and studied to analyze the consumer attitude and arrive at a reasonable conclusion vis a vis consumer attitude towards mobile advertising. Data Sources Secondary data was obtained from various periodicals, Industry reports, articles and Journals while primary data was collected using a questionnaire designed specifically to understand the consumer attitude & effectiveness of mobile advertising. Sampling procedure and sample size A total of 100 people were contacted and obtained responses from to conclude this research. Individuals between the age group of 18 – 40 were targeted for this research since the mobile Internet usage in this particular age group is maximum. The Ratio of male to female respondents is about 70:30.
  • 7. 7 Findings and Interpretation (All data in %) 1. I feel mobile ads are informative 2. I like to receive offers from brands of my choice on my mobile 3. Mobile ads make it easier for me to find product/service of my choice Agree Neutral Disagree 0 10 20 30 40 50 60 0 10 20 30 40 50 60 Agree Neutral Disagree 0 10 20 30 40 50 Agree Neutral Disagree
  • 8. 8 4. I click on mobile ads when I find it relevant for me 5. Mobile makes search of right product easy 6. I feel seeing mobile ads influence my buying decision 7. I feel mobile ads are distracting 0 10 20 30 40 50 Agree Neutral Disagree 0 10 20 30 40 50 60 Agree Neutral Disagree 0 10 20 30 40 50 60 Agree Neutral Disagree 0 10 20 30 40 50 60 70 Agree Neutral Disagree
  • 9. 9 8. I usually avoid clicking mobile ads 9. I have purchased a product because I saw an ad on my mobile phone 10. Mobile ads are a nuisance 0 10 20 30 40 50 60 70 80 90 Agree Neutral Disagree 0 10 20 30 40 50 60 70 Agree Neutral Disagree 0 10 20 30 40 50 60 70 80 Agree Neutral Disagree
  • 10. 10 Implications of the Study/Research This research shows some very interesting insights into the consumer attitude and psyche towards how he likes to interact with brands in the mobile environment. We can safely deduct that while most of the Smartphone users accept mobile advertising with a pinch of salt they want to define the rules of the game. They want to receive brand communication which is rewarding for him. He is ready to reward the business owner with a sale as long as brand respects his concerns and sends only very relevant communication. Conclusion and Limitations Looking at the data one can easily deduct that while mobile advertising is being adopted by brands as part of their media plan, consumers’ attitude is disposed towards positive and neutral. Some of important pointers are mentioned below.  Consumers don’t like to be spammed; they want to receive only relevant information from brands they are aware of.  People like to receive discounts and offers which can be consumed conveniently via the mobile device  A large chunk of people consume a lot of video content via their mobile devices  30 % people have bought a product or service because of seeing an ad on mobile  Out of the people who agreed upon buying a product due to mobile ads, 76 % were female. This finding is pretty much in line with a recent report published which says Indian Digital commerce market is being fuelled by Women and mobile phones [8]  52 % of people prefer to receive offers led advertising communication from brands of their choice  78 % people avoid clicking on mobile ads. The primary reasons seem to be not knowing where they will land, security concerns.  Marketers need to respect consumer’s privacy and send them only relevant information
  • 11. 11 This research was done on a sample size of 100 across Delhi, Mumbai and Bangalore. These geographies being tier I represents the urban and more evolved Smartphone users of India, the results and interpretation of this research may be applied only for the above mentioned audience. References [1] http://www.iamai.in/PRelease_detail.aspx?nid=3240&NMonth=1&NYear=2014 [2] T. Park, R. Shenoy, G. Salvendy, Effective advertising on mobile phones: a literature reviewand presentation of results from53 case studies, Behav. Inf. Technol 27(5) (2008) 355–373. [3] Peng-Tin Chen , Hsin-Pei Hsieh Technological Forecasting & Social Change 79 (2012) 543–557 [4] http://www.mmaglobal.com/whitepaper/india-adspend-report [5] http://www.digitalquotient.com/#about [6] http://www.iamwire.com/2013/04/indian-digital-advertising-spend- snapshot-projections-by-imrb-a-report/#_amoob8dv [7] http://www.business-standard.com/article/companies/online-ad-market-at- rs-2-940-cr-by-2014-report-113040400454_1.html [8] http://techcrunch.com/2014/03/26/inside-indias-e-commerce-boom- growing-base-of-mobile-internet-users-women-shoppers-and-several- infrastructure-bottlenecks/?ncid=rss