CONSUMER ACCEPTANCE OF MOBILE ADVERTISING WITHIN A SOCIAL CONTRACT

CONSUMER ACCEPTANCE OF MOBILE ADVERTISING WITHIN A

SOCIAL CONTRACT FRAMEWORK

_______________

A Thesis

Presented to the

Faculty of

San Diego State University

_______________

In Partial Fulfillment

of the Requirements for the Degree

Master of Arts in Communication

with a Concentration in

Mass Communication and Media Studies

_______________

by

Kelly E. Campbell

Summer 2011

iii

Copyright © 2011

by

Kelly E. Campbell

All Rights Reserved

iv

ABSTRACT OF THE THESIS

Consumer Acceptance of Mobile Advertising within a SocialContract Framework

byKelly E. Campbell

Master of Arts in Communication with a Concentration in MassCommunication and Media StudiesSan Diego State University, 2011

Despite the promise of mobile advertising as an emerging marketing channel, themedia has yet to gain adoption as a mainstream advertising source in the United States. Moststudies support a positive relationship between contextual, permission-based mobileadvertisements and consumer acceptance. However, little research has examined drivers ofconsumer acceptance from a social contract perspective. This study presents a model basedon previous research regarding social contract theory and identifies key factors that mayaffect the mobile advertising social contract. The researchers posit that there are fourattributes consumers consider when determining acceptance of mobile advertising:permission, trust, relevance, and context. Using a 2 x 2 x 2 x 2 full factorial design, the maineffects and interactions of permission (granted, not granted) trust (high, low), relevance(relevant content, not relevant content) and context (present, absent) are measured.Understanding drivers of consumer acceptance of mobile advertising have both practical andacademic applications. Consumers will benefit from receiving mobile advertisements that areperceived as personally valuable instead of intrusive; while the proposed model offers mobilemarketing researchers a framework for future study.

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TABLE OF CONTENTS

PAGE

ABSTRACT............................................................................................................................. iv

LIST OF TABLES................................................................................................................... vi

LIST OF FIGURES ................................................................................................................ vii

CHAPTER

1 INTRODUCTION AND LITERATURE REVIEW .....................................................1

Adoption of Mobile Advertising..............................................................................1

Acceptance of Mobile Advertising ..........................................................................3

Key Components of the Mobile Marketing Social Contract ...................................4

Social Contract Framework .....................................................................................6

2 METHODOLOGY ......................................................................................................11

Research Design.....................................................................................................11

Sample....................................................................................................................15

Data Analysis Procedure........................................................................................15

3 RESULTS AND DISCUSSION..................................................................................17

Presentation of the Findings...................................................................................17

Discussion of the Findings.....................................................................................22

4 SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS...............................26

REFERENCES ........................................................................................................................29

APPENDIX

A RANDOM ASSIGNMENT SURVEY SCENARIOS.................................................31

B FULL TABLE OF ANOVA RESULTS......................................................................37

vi

LIST OF TABLES

PAGE

Table 1. Sixteen Experimental Cells Used in Advertising Scenarios......................................12

Table 2. Random Assignment Sample Size by Scenario.........................................................13

Table 3. Results from Factorial Analysis of Variance.............................................................18

Table 4. Estimated Marginal Means ........................................................................................19

vii

LIST OF FIGURES

PAGE

Figure 1. Framework for consumer acceptance of mobile advertising......................................9

1

CHAPTER 1

INTRODUCTION AND LITERATURE REVIEW

ADOPTION OF MOBILE ADVERTISING

According to the International Association for the Wireless Telecommunications

Industry, as of June 2010, 93% of the U.S. population owned a mobile phone and over 24%

of U.S. households used mobile phones exclusively in place of a land-line. The

pervasiveness of this technology and the ability to target advertising on an individual basis

has led marketers to believe for many years now that mobile advertising is the next great

frontier for interactive, one-to-one, target marketing. The ability to obtain detailed

demographic and psychographic information about the mobile phone subscriber allows

marketers to deliver personalized, relevant messages to the user. In addition, the fact that

phones are GPS enabled and are with consumers at almost all times, allows marketers to

deliver location-based, contextually relevant advertisements. Finally, as the technology

evolves, more and more consumers are carrying data enabled devices that allow them to

access the internet, view video, and download content. This allows marketers to serve rich-

media advertising similar to that on the web.

While marketers are in agreement as to the potential for this advertising, they also

acknowledge substantial risk. Marketers fear alienating their customer with ads that may be

perceived as an invasion of privacy. In her examination of privacy issues with mobile

advertising, Cleff (2007, p. 229) stated “it is important to consider that in the case of mobile

telephones, the perception of intrusion and invasion in the private sphere is greater than in the

case of other means of communication.” Cleff (2007, p. 229) goes on to state that “without

2

adequate privacy protection they have the potential to create an environment of profiles,

blacklists, and constant surveillance.”

Wireless network providers have demographic, psychographic, and geographic

information about their subscribers that can be shared with advertisers. This allows the

advertiser to send the mobile user more relevant, targeted ads. However, this can also elicit

feelings of privacy violation from the consumer who is not comfortable with their personal

information being shared or with the idea that an advertiser knows where they are at any

given time. Consumers may also be turned off to a brand that sends them an advertisement

when they are in an atmosphere where they are not expecting an interruption. Consumers

expect to see advertisements when they are watching TV or reading a newspaper, however

they do not expect to see an ad when they are in a meeting at work. Finally, consumers may

become irritated if they receive an ad from a brand they are not familiar with or did not give

explicit permission to send advertisements.

All of these concerns have kept mobile advertising from gaining mainstream adoption

by marketers and consumers. The Mobile Marketing Association (2010) offers “Consumer

Best Practices” guidelines but there is no formal policy or regulatory measure that dictates

mobile advertising. This research examines the findings from previous research on consumer

acceptance of mobile advertising. Then, combining the results of this examination within a

social contract framework, explores the attributes which may have the greatest influence on

consumer acceptance of mobile advertising while alleviating the perceived risk associated

with it.

3

ACCEPTANCE OF MOBILE ADVERTISING

Consumer attitudes toward advertising have been studied extensively across all media

and are often used to operationalize consumer acceptance toward advertisements. Within a

mobile marketing context, acceptance is imperative to the adoption of mobile advertising as a

mainstream marketing source. A positive attitude toward the medium leads to the behavioral

intention to adopt and use mobile marketing services (Bauer, Reichardt, Barnes, & Neumann,

2005). This research operationalizes acceptance of mobile advertising as the consumer’s

overall positive attitude toward receiving advertisements on their mobile phone, including

attitude toward the medium, attitude toward the advertisement, and willingness to receive

mobile advertisements.

Understanding what drives consumer acceptance of mobile advertising is the key to

adoption of this medium as a mainstream advertising source (Sharma, Herzog, & Melfi,

2008) and the key to conceptual models that attempt to explain levels of acceptance. A large

obstacle facing the adoption of mobile advertising is consumers’ fear of information privacy

violations (Bauer et al., 2005). Technology that enables marketer’s to send personalized,

targeted ads based on consumer location, interests, and behaviors, may raise privacy

concerns among consumers and thus increase their perceived risk associated with receiving,

opening, or responding to mobile advertising (Okazaki, Li, & Hirose, 2009). This hypothesis

was confirmed by Okazaki et al. (2009) when they found a positive relationship between

information privacy concerns and perceived risk in mobile advertising. However, the

research also found that trust in the advertiser actually decreases the consumer’s perceived

risk of mobile advertising. These findings suggest that information privacy concerns

associated with mobile advertising can be mitigated by other factors. Research also suggests

4

that consumers are willing to accept a certain degree of privacy loss if the social or economic

benefit of doing so outweighs the perceived cost (Milne & Gordon, 1993). An eMarketer

Research Report (2003) confirmed this finding within a mobile marketing context,

suggesting that approximately 65% of U.S. consumers are willing to provide personal

information about them in exchange for relevant mobile advertising. This research identifies

four key attributes that are hypothesized to positively influence the implied social contract

between those who send and receive mobile advertisements.

KEY COMPONENTS OF THE MOBILE MARKETING

SOCIAL CONTRACT

Permission: Well defined policies surrounding permission and email marketing are

already in place, however, less concrete guidelines exist with respect to permission and

mobile advertising. When an individual grants an advertiser explicit consent to send

promotional messages to his or her mobile phone, the advertiser has gained the receiver’s

permission (Tsang, Ho, & Liang, 2004). Previous research supports the concept that

permission is not only a key driver of consumer acceptance but also effectiveness of mobile

advertising. Kavassalis, Spyropoulou, Drossos, Mitrokostas, Gikas, and Hatzistamatiou

(2003) examined the emerging mobile market potential and proposed that a successful

industry structure requires that marketers gain permission from consumers before sending an

advertisement. An empirical study by Barwise and Strong (2002) found that advertisers who

gained permission prior to sending an ad had much better response rates than those who sent

unsolicited messages. In addition, in the absence of permission, ads were found to be

ineffective and to have a negative impact on a consumer’s attitude toward the brand.

Another empirical study that examined consumer attitudes found that permission had a

5

positive influence on attitudes toward mobile advertising (Tsang et al., 2004). These findings

were confirmed by Bamba and Barnes (2007) in their examination of permission specifically

related to SMS mobile advertising. Their research indicated that 87.8 percent of respondents

felt it was important that they give permission to an advertiser before receiving a text

message advertisement.

Trust: Any social contract between an advertiser and consumer requires a certain

level of trust. From a brand perspective, trust is achieved when there is a perceived

credibility toward the advertiser on the part of the consumer (Jevons & Gabbott, 2000). In

relation to mobile marketing, trust has also been found to decrease a consumer’s perceived

risk of mobile advertising (Okazaki, Katsukura, & Nishiyama, 2007). In their research

examining the role of trust in improving attitudes toward mobile advertising, Okazaki et al.

(2007) found that attitude toward the brand was a mediating variable for attitude toward

mobile advertising with regard to durable goods. In addition, a review of the literature

regarding factors that affect the use of mobile advertising suggested that the advertiser’s

brand influences the “credibility of the advertisement and the use of mobile advertising”

(Vatanparast & Asil, 2007, p. 27). Research examining consumer privacy concerns toward

mobile advertising found that higher levels of advertiser trust can reduce the level of a

mobile user’s perceived risk (Okazaki et al., 2009).

Relevance: The amount of personal data available regarding mobile users allows

marketers to send highly targeted mobile advertisements. Personalized ads aimed at an

individual’s interests and behaviors as opposed to a broader target audience are considered

highly relevant to the consumer (Kazienko & Adamski, 2007). Relevance is key to consumer

adoption of mobile advertising not only because consumers expect mobile ads to be

6

personally relevant but also because there is the potential for negative consumer reactions

towards advertisements that are not relevant (Barwise & Strong, 2002). An empirical study

of consumer acceptance of SMS mobile advertising found that acceptance was high when ads

were “relevant, highly targeted, personalised and of value-added content” (Maneesoonthorn

& Fortin, 2006, p. 71). Similar research that examined acceptance of SMS ads also measured

effectiveness and found that campaign relevance was strongly correlated with levels of

acceptance and that consumers were significantly more likely to take action as a result of

high campaign relevance (Rettie, Grandcolas, & Deakins, 2005).

Context: The GPS functionality of most mobile phones allows marketers to send

promotional messages and offers that are contextually relevant to an individual based on

proximity to the respective marketer’s products or services (Bruner, Gordon, & Kumar,

2007). The potential to reach consumers when they are in public and in a consumer-related

state of mind (shopping, buying, etc…) is very appealing to marketers and research shows is

perceived as useful by consumers (Banerjee & Dholakia, 2008). A focus group of

consumers’ willingness to receive text message advertisements found that most participants

liked the idea of location-based services and were willing to accept a certain feeling of

intrusion because the ads were highly relevant to their time and place (Bamba & Barnes,

2007). An empirical study by Merisavo et al. (2007) supported the importance of contextual

ads and found that utilization of contextual information was a strong positive driver of

consumer acceptance toward mobile advertising.

SOCIAL CONTRACT FRAMEWORK

Social contract theory from a marketing perspective focuses on the concept of

exchange between the organization and the consumer. An organization offers society a

7

benefit in exchange for the opportunity to make a profit (Donaldson, 1982). Milne and

Gordon (1993) first conceptualized advertising specifically as an implied social contract in

the direct marketing environment. They examined the relationship between the sender and

receiver of direct marketing advertisements and posited that consumers are willing to provide

information about themselves to direct marketers in exchange for social or economic

benefits. However, for this social contract to be perceived positively by the consumer, the

social or economic benefit must outweigh the risk associated with providing personal

information. If the benefits do not outweigh the risks, consumers feel their rights have been

violated. The difficult part of this social contract is that the relationship is not explicitly

articulated; instead, the terms of the contract are implied, leaving both advertiser and

consumer expectations somewhat subjective. In an effort to more clearly define the

expectations of this relationship, Milne and Gordon (1993) developed a Direct Marketing

Social Contract Framework. This Framework suggested there are four major attributes each

party must positively evaluate for the contract to be enacted. In the direct marketing

environment, these attributes were: targeting, volume, permission, and compensation. Milne

and Gordon (1993) found that consumers consider all these attributes to varying degrees

when determining satisfaction levels with the direct marketing social contract.

There is an absence of theoretical and empirical work on the mobile advertising social

contract. However, the work by Milne and Gordon (1993) provides a basis for pursing work

in this area, given the similarities between direct marketing and mobile marketing. Similar to

the direct marketing environment, mobile advertising is highly targeted and personalized to

the receiver. However, because mobile phones are considered such personal devices there is

even greater risk associated with sending and receiving mobile advertisements. Marketer’s

8

are concerned that unsolicited advertisements on mobile phones will be perceived as SPAM

and have a negative effect on consumer’s attitudes toward both the advertiser and mobile

advertising in general (Merisavo et al., 2007).

The framework presented in this research is an adaption and extension of the Milne

and Gordon (1993) framework. An original model is presented which (based on prior

research) identifies key factors that may affect the mobile advertising social contract. The

model is provided in Figure 1. The solid lines represent the exchange of mobile user

information and advertisements on a mobile phone. The dashed lines represent the third

party organizations that influence mobile advertising policy and information privacy. The

bold lines indicate the four attributes that the thesis posits consumers consider when

determining acceptance of mobile advertising: (a) permission, (b) trust, (c) relevance, and (d)

context. The dotted line represents the level of consumer acceptance based on the attributes

present in an advertising scenario. Perceived risk is an intervening variable that can affect

consumer acceptance levels and is influenced by two of the attributes, permission and trust.

The model shows that wireless network providers have information about mobile

users that can be provided to mobile advertisers. They also control the advertising platform

and can dictate when and how advertisements are served to mobile users. The government

regulates policy and guidelines for consumer privacy and can stipulate what information

wireless providers are allowed to disclose to advertisers. Consumers themselves can provide

the advertiser with personal information in exchange for receiving advertisements on their

mobile phones. This exchange is based on each party’s evaluation of the attributes of the

social contract. Two of the attributes, permission and trust, are given by the consumer to the

advertiser. The other two attributes, relevance and context, are provided by the advertiser to

9

Figure 1. Framework for consumer acceptance of mobile advertising.

the consumer. The model posits that a consumer’s response to the four attributes in the

framework will significantly affect the level of acceptance toward mobile advertising. Since

there are privacy violation concerns associated with organizations obtaining personal

information about a consumer’s demographic, psychographic, and geographic information,

perceived risk is considered an intervening variable affecting the consumer’s acceptance

level. If the consumer feels the social or economic benefits of receiving a mobile ad

outweigh the risks associated with privacy loss, then the perceived risk is mitigated and

acceptance is higher. In the case of this framework, when permission and trust are present,

perceived risk is lower. Based on the framework presented, this study seeks to answer the

following research questions:

R1: What is the effect of permission on consumer acceptance of mobile advertising?

R2: What is the effect of brand trust on consumer acceptance of mobile advertising?

R3: What is the effect of personal relevance on consumer acceptance of mobileadvertising?

10

R4: What is the effect of location-based context on consumer acceptance of mobileadvertising?

R5: Does the presence of permission (opt-in) reduce the consumer’s perceived riskassociated with mobile advertising?

R6: Does the presence of advertiser brand trust reduce the consumer’s perceived riskassociated with mobile advertising?

11

CHAPTER 2

METHODOLOGY

RESEARCH DESIGN

This study utilized an online survey to examine the influence of permission, trust,

relevance, and context on consumer acceptance levels toward mobile advertising.

Specifically, the research used a 2 x 2 x 2 x 2 full factorial design with main effects of

permission (granted, not granted), trust (high, low), relevance (relevant content, not relevant

content), and context (present, absent). Table 1 represents each of the 16 experimental cells.

PsychData’s services were used to deploy an online survey with random stimulus

assignment so that each participant was assigned to one of the 16 cells. Sample size per cell

ranged between 18 and 34 based on random assignment of all qualified respondents. A

breakdown of the sample size for each scenario is presented in Table 2.

Each scenario represented the specific conditions of its factorial cell. Scenarios were

constructed out of a common set of elements representing each factor in the research design.

For example, a scenario in the “permission granted” condition contained the sentence “You

gave the (name of advertiser) permission to send promotional advertisements to your mobile

phone.” While the scenario in the “permission not granted” condition contained the sentence

“You did not give the (name of advertiser) permission to send promotional advertisements to

you.” Appendix A includes a full list of each scenario presented to respondents.

Key measures addressed attitudes toward the mobile advertisement and perceived

risk. Attitude measures are widely used in forecasting acceptance and the most popular

approach within the realm of marketing research utilizes direct self-report by asking survey

12

Table 1. Sixteen Experimental Cells Used inAdvertising Scenarios

Per

mission

T

rust

Re

levance

C

ontext

1 - - - -

2 + - - -

3 - + - -

4 - - + -

5 - - - +

6 + + - -

7 + - + -

8 + - - +

9 - + + -

10 - + - +

11 - - + +

12 + + + -

13 + + - +

14 + - + +

15 - + + +

16 + + + +

respondents a series of questions (Aaker & Day, 1983). Specifically, attitude measures for

this research included attitude toward the advertisement, attitude toward the medium, and

willingness to receive advertisements on a personal mobile device. Scales to measure each of

these constructs were garnered from previous research. Attitude toward the advertisement

was measured using a 3 item scale adapted from Xu, Oh, and Teo (2009). The index had a

Cronbach alpha reliability coefficient of .938.

13

Table 2. Random Assignment Sample Size by Scenario

Scenario

Sample

Size

1

2

5

2

3

2

3

2

3

4

2

7

5

2

8

6

2

1

7

2

4

8

1

8

9

2

4

1

0

2

2

1

1

1

9

1

2

2

2

1

3

3

1

1

4

2

2

1

5

3

4

1

6

2

2

14

7 point agree/disagree

I would find this mobile advertisement useful

I would find this mobile advertisement valuable

I would find this mobile advertisement interesting

Attitude toward the medium was measured using a 3 item scale adapted from

Merisavo et al. (2007). The index had a Cronbach alpha reliability coefficient of .885.


I feel positively about receiving mobile advertising

I am willing to receive mobile advertising messages in the future

I would read all the mobile advertising messages I receive in the future

Intention to use or respond to the advertisement was measured using a 2 item scale

adapted from Banerjee and Dholakia (2008). The index had a Cronbach alpha reliability

coefficient of .679.

7 point likely/unlikely

After receiving this advertisement I would consider responding to the ad

After receiving this advertisement I would consider sharing it with a friend or familymember

The intervening variable of perceived risk was measured using a 4 item scale adaptedfrom Merisavo et al. (2007). The index had a Cronbach alpha reliability coefficientof .873.


I would feel a loss of control if I received this type of mobile advertisement

I would feel a loss of privacy if I received this type of mobile advertisement

I would feel annoyed if I received this type of mobile advertisement

I would feel as if the distinction between home, work, and leisure had been blurred ifI received this mobile advertisement

15

SAMPLE

Recruitment of survey respondents was conducted through Facebook, LinkedIn, and

email. A brief description of the study along with a link to the online survey was emailed to

the researcher’s co-workers, school colleagues, and personal network. In addition, the

description and link were also posted on the researcher’s Facebook and LinkedIn pages to

recruit additional respondents.

Selection for survey respondents included three main criteria: (a) respondents must

own a mobile phone, (b) respondents must send and receive text messages at least once a

week, and (c) respondents must be at least 18 years of age. These selection criteria were

important because the study demonstrates a relationship between mobile advertising,

attitudes, and acceptance. To obtain relevant data that demonstrates a correlation,

respondents must already have a personal connection to their mobile device and be familiar

with how to send and receive text messages. Also, certain questions are based on scenarios

and require previous knowledge of the technology to answer them appropriately.

Of the 457 respondents recruited, 392 met the eligibility requirements of the survey.

The sample was comprised of approximately 31% male and 69% female respondents.

Approximately 8% of respondents were between the ages of 18 and 25, 41% were 26 – 34,

27% were 35 – 45, 13% were 46 – 55, and 12% were over 55. 83% of all respondents

described themselves as non-Hispanic white.

DATAANALYSIS PROCEDURE

SPSS was used to conduct statistical analysis on the data collected from an online

survey. A 2 x 2 x 2 x 2 factorial analysis of variance was used to measure the effects of the

16

presence or absence of each attribute (permission, trust, relevance, and context) on attitudes

toward mobile advertising and also mitigation of perceived risk.

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CHAPTER 3

RESULTS AND DISCUSSION

PRESENTATION OF THE FINDINGS

The model posited the effect of four variables on individuals’ reactions to mobile

advertising. The first four research questions focused on these variables and their effects.

Overall, it appears that the model correctly predicted the influence of each variable; however

the range of influence varied across outcome measures.

R1: What is the effect of permission on consumer acceptance of mobile advertising?

Permission exerted the greatest influence. As shown in Table 3, there was a

significant main effect for permission in relation to all three acceptance measures: (1) attitude

toward the advertisement [F (1/379) = 24.90, p < .001], (2) attitude toward the medium [F

(1/378) = 6.46, p = .011], and (3) intention to act on the ad [F (1/373) = 9.65, p = .002]. An

examination of the mean scores (see Table 4) indicates that this effect was in a positive

direction, that is, across all three outcome measures respondents were more positive toward

mobile advertising and more likely to act when permission was present versus when it was

absent.

R2: What is the effect of brand trust on consumer acceptance levels of mobile

advertising? Trust also exerted an important (but versus permission a more limited)

influence on the outcome measures. As shown in Table 3, there was a significant main effect

for trust in relation to two of the acceptance measures: (1) attitude toward the ad [F (1/379) =

24.49, p < .001], and (2) intention to act on the ad [F (1/373) = 6.24, p = .013]. An


18

Table 3. Results from Factorial Analysis of Variance

Permission

Measure dfMean

Square F Sig

Attitude toward ad 1 64.572 24.898 0.000

Attitude toward medium 1 15.939 6.458 0.011

Intention to act on ad 1 23.581 9.654 0.002

Perceived risk 1 269.311 124.088 0.000

Trust

Measure dfMean

Square F Sig



Perceived risk 1 13.346 6.149 0.014

Relevance

Measure dfMean

Square F Sig


Context

Measure dfMean

Square F Sig



Trust and Context

Measure dfMean

Square F Sig

Attitude toward medium 1 22.443 9.093 0.003

19

Table 4. Estimated Marginal Means

Permission

Measure

Present Absent

Mean Std. Error Mean Std. Error

Attitude to ad 4.13 0.115 3.308 0.118

Attitude to medium 3.032 0.112 2.623 0.115

Intention to act on ad 3.299 0.112 2.799 0.115

Percieved risk 3.315 0.105 4.992 0.108

Trust

Measure

Present Absent


Attitude to ad 4.126 0.117 3.312 0.115


Percieved risk 3.967 0.107 4.34 0.106

Relevance

Measure

Present Absent


Attitude to ad 3.938 0.116 3.5 0.117

Context

Measure

Present Absent


Attitude to ad 4.058 0.115 3.38 0.118


direction, that is, respondents were more positive toward the ad and showed greater intention

to act when trust was present versus when it was absent.

R3: What is the effect of personal relevance on consumer acceptance of mobile

advertising?

Versus permission and trust, personal relevance showed a more limited role in

influencing the outcome measures. As shown in Table 3, there was one significant main

effect for relevance [F (1/379) = 7.10, p = .008] in relation to the acceptance level for attitude

20

toward the ad. Similar to the other measures, an examination of the mean scores (see Table

4) indicates that this effect was in a positive direction, that is, respondents were more positive

the ad when relevance was present versus when it was absent.

R4: What is the effect of location-based context on consumer acceptance of mobile

advertising?

Similar to trust, location-based context showed an important role in influencing

reactions to mobile advertising. As shown in Table 3, there was a significant main effect

observed for context with two of the acceptance measures: (1) attitude toward the ad [F

(1/379) = 17.01, p < .001] and (2) intention to act on the ad [F (1/373) = 15.07, p < .001]. An


direction, that is, respondents were more positive toward the ad and showed greater intention

to act when location-based content was present versus when it was absent.

Research questions 5 and 6 focused on the model’s assumed relationship between

permission, brand trust and perceived risk.

R5: Does the presence of permission reduce the consumer’s perceived risk associated

with mobile advertising?

Permission does influence perceived risk [F (1, 373) = 124.08, p <.001]. As shown in

Table 3, perceived risk is lower when permission is present versus when it is absent.

R6: Does the presence of brand trust reduce the consumer’s perceived risk associated

with mobile advertising?

Brand trust also influences perceived risk [F (1, 373) = 13.346, p <.01]. As shown in

Table 3, perceived risk is lower when permission is present versus when it is absent.

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Finally there was one significant interaction effect observed between trust and context

in relation to the acceptance measure attitude toward the medium [F (1/378) = 9.09, p =

.003].

To allow for further exploration of the key attributes in the model, additional data was

collected. Respondents were asked to rate their overall reaction to the ad they received in the

scenario. Crosstabulation was used to uncover the relationship between positive reaction and

attributes present. This crosstabulation reinforced the prior findings and demonstrated the

effects of each of the four variables. The prior findings indicated that permission and trust

exerted the greatest overall effect. Here, of those respondents who had trust, relevance, and

context present but permission absent in their scenario, only 53.1% rated their reaction as

positive or very positive. Of those respondents who had permission, relevance, and context

present, but trust absent, only 50% rated their reaction as positive or very positive. The

absence of the remaining two variables (as would be predicted by the prior findings) showed

more limited effect. Of those respondents who had permission, trust, and context present, but

relevance absent, fully 81.5% rated their reaction as positive or very positive. Finally, of

those respondents who had permission, trust, and relevance present but context absent, fully

71.4% rated their reaction as positive or very positive. These outcomes are statistically

significant. The Chi-Square statistic equals 102.07 with 15 degree of freedom and a

significance level of <.01 (x2 = 102.07, d.f. = 15; p<.01).

Please reference Appendix B to see a full table of the Anova results for those findings

that were not statistically significant.

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DISCUSSION OF THE FINDINGS

The conceptual framework presented in Figure 1 suggested that four attributes,

permission, trust, relevance, and context, when present, increase consumer acceptance levels

toward mobile advertising. In addition, permission and trust, when present, decrease the

perceived risk associated with receiving mobile advertisements. The findings presented here

support the framework and suggest that all attributes positively influence consumer

acceptance levels of mobile advertising to a varying degree.

Permission has the greatest overall influence on acceptance levels and positively

influenced all three acceptance measures. When consumers provide the advertiser with

explicit permission to send them mobile advertisements, their acceptance levels are higher.

That is, they have a more positive attitude toward the ad and toward the medium as well as a

greater intention to act on the ad. In addition, when permission is present in an advertising

scenario, the perceived risk associated with receiving mobile advertising is also mitigated.

This seems intuitive given societal norms and legislation already in place around opt-in and

permission based email advertising. Since consumers are already familiar with permission

marketing in the email medium, they consider it a “ticket to play” in the mobile marketing

context as well. This confirms previous research surrounding permission-based advertising

on mobile phones. The findings also suggest that if marketers only have one attribute present

in their mobile advertising scenario, that attribute should be permission. It has the greatest

overall positive effect on the consumer’s acceptance of mobile advertising.

Trust was also found to influence consumer acceptance levels of mobile advertising,

although to a slightly lesser degree than permission. When consumers trust the brand they are

receiving an ad from, their attitude toward the ad is more positive and their intention to act on

23

the ad is greater. In addition, when brand trust is present, the consumer’s perceived risk

associated with receiving mobile advertising is lowered, as the model posited. These

findings are significant on two levels. First, from a social contract perspective, the research

presented here suggests that consumers are willing to give up a certain level of privacy if

they trust an advertiser, regardless of whether they gave the advertiser permission to send

them ads. Second, from a practitioner perspective, this speaks to the importance of brand

equity and the deep significance the consumer places on brand trust. If an advertiser is

unable to gain permission to send mobile advertising, they should only target those customers

who are loyal to the brand. Therefore, mobile advertising campaigns are better suited for

customer retention versus customer acquisition.

Context is the third most influential attribute in the model that positively influences

consumer acceptance of mobile advertising. When ads are relevant to a consumer’s time or

place, they have a more positive attitude toward the ad and are more likely to act on the ad.

This finding was supported by anecdotal feedback from respondents when asked what aspect

of the scenario contributed to their positive response:

Being near a Macy’s when I received the text message. If I was at home orlunch or something I would be irritated.

I was already shopping at the mall at the time I received the text and it wasfrom a store I actually shop at. It boils down to the text’s timing: if I received it atwork or while busy doing something else I would have been irritated.

The efficiency of receiving the message while shopping at a location near aMacy’s. (Survey conducted by author, April 2011)

These findings suggest that delivery of the ad in the “right place” is more important

than the personalized content. That is, context has more influence than relevance. This may

be because of the nature of the medium itself. Mobile phones offer instant gratification to the

user and location-based advertising allows consumers to receive ads when they are most

24

timely. Respondents seemed less concerned with whether the ad was relevant to what they

were shopping for and more concerned with whether the store they were receiving the

discount for was close by. These findings are somewhat contrary to the old marketing adage

that successful ads are a combination of the right offer, to the right person, at the right time.

The unique combination of the mobile phone being such a personal device but also such a

targeted advertising medium most likely contributes to this difference.

Relevance was also found to positively influence consumer acceptance of mobile

advertising. However, this attribute has the smallest effect out of the four attributes in the

model. When consumers receive an advertisement on their mobile phone that is personally

relevant, their attitude toward the ad is more positive. This finding is contrary to much of the

previous research on acceptance of mobile advertising which suggests relevance is the main

driver of consumer acceptance. Although it is a significant attribute, it is the least influential

out of the four. One of the key attributes surrounding mobile advertising that make it so

appealing to advertisers is the ability to serve ads that are highly relevant. Because

advertisers are able to access demographic and psychographic infomation about mobile

subscribers, they can serve them highly targeted ads. However, based on the findings

presented here, the attribute that makes this medium so appealing to marketers is actually the

least important to consumer acceptance of mobile advertising.

Contrary to the researchers’ expectations, there was only one significant interaction

effect among the attributes and it was between trust and context. When trust and context are

present in a mobile advertising scenario, attitude toward the medium is more positive. This

is significant for those advertisers who have not gained consumer permission to send mobile

advertisements. The findings suggest that the benefits of the ad outweigh the risk of having

25

not given permission. This finding is significant from a social contract perspective as it

appears that if the ad is timely for the consumer and the consumer has trust in the advertiser,

the benefit of the ad outweighs the feeling of privacy loss experienced from having an

advertiser know one’s location.

26

CHAPTER 4

SUMMARY, CONCLUSIONS, AND

RECOMMENDATIONS

The mobile phone is still a relatively new medium that advertisers have yet to fully

leverage. Unique properties of the medium make it especially appealing to marketers who

wish to send personalized, relevant, and timely advertisements to their target audience.

Wireless network providers have a wealth of demographic and psychographic data about

their subscribers that can be used to send highly targeted ads. In addition, GPS capabilities

allow advertisers to send location-based ads that are contextually relevant to the consumer.

However, consumers consider their mobile phones to be very personal devices and marketers

walk a fine line between providing value to the consumer and irritating or even offending the

consumer. This research presented a framework that suggests four attributes, permission,

trust, relevance, and context, when present in the mobile advertising scenario, increase

consumer acceptance levels of mobile advertisements. The framework also posits that

permission and trust, when present, mitigate the perceived risk that is inherent in the implied

social contract between advertiser and consumer. Based on the findings from this research, it

is clear that all four attributes positively influence consumers’ attitudes toward mobile

advertisements to varying degrees. In addition, the presence of consumer permission or

advertiser trust mitigates the perceived risk inherent in this new medium. These findings

suggest that when developing a mobile advertising campaign, the most influential attribute is

permission. The second most influential attribute is trust. Context is the third most

27

influential attribute and relevance is the least influential attribute. Marketers should strive to

gain permission from their customer’s before sending mobile advertisements. However, if

permission is not possible, it is important for marketers to target those customers who are

already loyal to their brand. Most importantly, the findings presented in this research

confirm that those attributes most important in traditional advertising transcend mediums and

are applicable in mobile advertising as well.

While the findings from this research suggest the mobile phone is a viable new

medium for advertisers, there are limitations to the study. The sample used in this research

was a convenience sample, rather homogenous, and heavily female. Future studies should

attempt to gain a more random and representative sample of the mobile phone subscriber

population. The study also did not control for those respondents who may be comfortable

sharing private information. In this age of social networks, many people are more at ease

making private information public and may have less concern with privacy issues

traditionally associated with mobile advertising. In addition, the scale used to measure

intention to respond to the ad had a Cronbach alpha reliability coefficient of only .679.

Future research should attempt to use measures that more accurately predict consumer

intentions. The study also asked respondents to imagine themselves in a given scenario and

then answer questions about their attitudes based on self-report. This may have been difficult

for respondents since they were not actually in the situation and did not view a real

advertisement. Future studies should use an experimental design instead of survey

methodology to replicate this research in a “real-world” setting and serve ads to mobile

phone users. In addition, future researchers may benefit from understanding how adoption

rates of mobile phone use affect acceptance of mobile advertisements. There may be some

28

correlation between those who use their phone heavily for web browsing or apps and those

who have higher acceptance levels of mobile advertisements. It may also be beneficial to

understand if the content of the ad influences consumer acceptance levels. For example, if

the ad offers a specific monetary discount or simply builds brand awareness. In addition, this

research was limited to SMS text advertisements. However, there are many other ways to

serve targeted mobile advertisements including on the mobile web, in mobile gaming, and

through mobile apps. Researchers may benefit from understanding if there are differences in

acceptance levels based on the mobile advertisement type. Future research may also

consider the framework from the advertiser or wireless network point of view.

Understanding drivers of consumer acceptance of mobile advertising is the key to leveraging

this new medium as a powerful tool that is mutually beneficial to the advertiser and

consumer.

29

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Bauer, H. H., Reichardt, T., Barnes, S. J., & Neumann, M. M. (2005). Driving consumeracceptance of mobile marketing: A theoretical framework and empirical study.Journal of Electronic Commerce Research, 6(3), 181-191.

Bruner II, Gordon C., & Kumar, A. (2007). Attitude toward location-based advertising.Journal of Interactive Advertising, 7(2), 1.

Cleff, Evelyn B. (2007). Privacy issues in mobile advertising. International Review of LawComputers and Technology, 21(3), 225-236.

Donaldson, T. (1982). Corporations and morality. Englewood Cliffs, NJ: Prentice Hall.

eMarketer Research Report. (2003). SMS marketing yields strong results. United Kingdom:eMarketer.

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Jevons, C., & Gabbott, M. (2000). Trust, brand equity and brand reality in internet businessrelationships: An interdisciplinary approach. Journal of Marketing Management,16(6), 619-634.

Kavassalis, P., Spyropoulou, N., Drossos, D., Mitrokostas, E., Gikas, G., & Hatzistamatiou,A. (2003). Mobile permission marketing: Framing the market inquiry. InternationalJournal of Electronic Commerce, 8(1), 55-79.

Kazienko, P., Adamski, M. (2007). AdROSA – Adaptive personalization of web advertising.Information Sciences, 177(11), 2269–2295.

Maneesoonthorn, C., & Fortin, D. (2006). Texting behaviour and attitudes toward permissionmobile advertising: An empirical study of mobile users' acceptance of sms formarketing purposes. International Journal of Mobile Marketing, 1(1), 66-72.

Merisavo, M., Kajalo, S., Karjaluoto, H., Virtanen, V., Salmenkivi, S., Raulas, M., &Leppäniemi., M. (2007). An empirical study of the drivers of consumer acceptance ofmobile advertising. Journal of Interactive Advertising, 7(2), 1.

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Milne, G. R., & Gordon, M. (1993). Direct mail privacy-efficiency trade-offs within animplied social contract framework. Journal of Public Policy & Marketing, 12(2), 206-215.

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Okazaki, S., Katsukura, A., & Nishiyama, M. (2007). How mobile advertising works: Therole of trust in improving attitudes and recall. Journal of Advertising Research, 47(2),165-178.

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Sharma, C., Herzog, J., & Melfi, V. (2008). Mobile advertising: Supercharge your brand inthe exploding wireless market. Hoboken, NJ: John Wiley & Sons.

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31

APPENDIX A

RANDOM ASSIGNMENT SURVEY SCENARIOS

32

1. Imagine that you are at the mall shopping for a new shirt. While you are shopping, you

receive a text message on your phone. The message is from Macy’s department store and

offers you a coupon for 20% off your next purchase. A couple weeks earlier, while on

Macy’s website, you gave the retailer permission to send you promotional advertisements to

your cell phone. The timing couldn’t be better because there happens to be a Macy’s at the

mall you are shopping at and they have a wide selection of shirts. You also trust Macy’s as a

retailer with fair prices, wide selection, and quality products.



offers you a coupon for 20% off your next purchase. You never gave Macy’s permission to

send promotional advertisements to your phone but the timing couldn’t be better because

there happens to be a Macy’s at the mall you are shopping at and they have a wide selection

of shirts. You also trust Macy’s as a retailer with fair prices, wide selection, and quality

products.






mall you are shopping at and they have a wide selection of shirts. However, because of a

recent negative shopping experience at Macy’s, they are no longer a retailer you trust for fair

prices, wide selection, or quality products.

4. Imagine that you are at the mall shopping for a new computer. While you are shopping,

you receive a text message on your phone. The message is from Macy’s department store

and offers you a coupon for 20% off your next purchase. A couple weeks earlier, while on



mall you are shopping at. You also trust Macy’s as a retailer with fair prices, wide selection,

33

and good quality products. However, you came to the mall to buy a new computer and

Macy’s does not sell computers.





your cell phone. The timing couldn’t be better because Macy’s has a wide selection of shirts

and you trust Macy’s as a retailer with fair prices, wide selection, and good quality products.

However, there is not a Macy’s at the mall you are currently shopping at.





there happens to be a Macy’s at the mall you are shopping at and they have a wide selection

of shirts. However, because of a recent negative shopping experience at Macy’s, they are no

longer a retailer you trust for fair prices, wide selection, or quality products.



and offers you a coupon for 20% off your next purchase. You never gave Macy’s permission

to send promotional advertisements to your phone but the timing couldn’t be better because

there happens to be a Macy’s at the mall you are shopping at. You also trust Macy’s as a

retailer with fair prices, wide selection, and good quality products. However, you came to

the mall to buy a new computer and Macy’s does not sell computers.





34

Macy’s has a wide selection of shirts and you trust Macy’s as a retailer with fair prices, wide

selection, and good quality products. However, there is not a Macy’s at the mall you are

currently shopping at.






mall you are shopping at. However, because of a recent negative shopping experience at

Macy’s, they are no longer a retailer you trust for fair prices, wide selection, or quality

products. You also came to the mall to buy a new computer but Macy’s does not sell

computers.





your cell phone. The timing couldn’t be better because Macy’s has a wide selection of shirts.

You also trust Macy’s as a retailer with fair prices, wide selection, and quality products.

However, because of a recent negative shopping experience at Macy’s, they are no longer a

retailer you trust for fair prices, wide selection, or quality products. In addition, there is not a

Macy’s at the mall you are currently shopping at.





your cell phone. You trust Macy’s as a retailer with fair prices, wide selection, and quality

products. However, there is not a Macy’s at the mall you are currently shopping at and you

came to the mall to buy a new computer but Macy’s does not sell computers.

35




to send promotional advertisements to your phone but the timing couldn’t be better because

there happens to be a Macy’s at the mall you are shopping at. However, because of a recent

negative shopping experience at Macy’s, they are no longer a retailer you trust for fair prices,

wide selection, or quality products. You also came to the mall to buy a new computer but

Macy’s does not sell computers.





they have a wide selection of shirts. However, because of a recent negative shopping

experience at Macy’s, they are no longer a retailer you trust for fair prices, wide selection, or

quality products. In addition, there is not a Macy’s at the mall you are currently shopping at.




to send promotional advertisements to your phone but you trust them as a retailer with fair

prices, wide selection, and quality products. However, there is not a Macy’s at the mall you

are currently shopping at and you came to the mall to buy a new computer but Macy’s does

not sell computers.





your cell phone. However, because of a recent negative shopping experience at Macy’s, they

36

are no longer a retailer you trust for fair prices, wide selection, or quality products. In

addition, there is not a Macy’s at the mall you are currently shopping at and you came to the

mall to buy a new computer but Macy’s does not sell computers.



and offers you a coupon for 20% off your next purchase but you never gave Macy’s

permission to send promotional advertisements to your phone. Also, because of a recent

negative shopping experience at Macy’s, they are no longer a retailer you trust for fair prices,

wide selection, or quality products. In addition, there is not a Macy’s at the mall you are

currently shopping at and you came to the mall to buy a new computer but Macy’s does not

sell computers.

37

APPENDIX B

FULL TABLE OF ANOVA RESULTS

38

Tests of Between-Subjects Effects

Dependent Variable: INTENTV2 Intention to act on ad 2 variables

103.555a 15 6.904 2.826 .000

3515.110 1 3515.110 1439.042 .000

.294 1 .294 .120 .729

15.240 1 15.240 6.239 .013

36.805 1 36.805 15.068 .000

23.581 1 23.581 9.654 .002

.703 1 .703 .288 .592

4.342 1 4.342 1.777 .183

8.948 1 8.948 3.663 .056

.058 1 .058 .024 .878

.741 1 .741 .303 .582

1.380 1 1.380 .565 .453

.098 1 .098 .040 .841

.011 1 .011 .005 .946

.363 1 .363 .149 .700

1.781 1 1.781 .729 .394

.455 1 .455 .186 .666

911.117 373 2.443

4619.938 389

1014.673 388

SourceCorrected Model

Intercept

RELEVANC

TRUST

CONTEXT

PERMISSI

RELEVANC * TRUST

RELEVANC * CONTEXT

TRUST * CONTEXT

RELEVANC * TRUST *CONTEXT

RELEVANC * PERMISSI

TRUST * PERMISSI

RELEVANC * TRUST *PERMISSI

CONTEXT * PERMISSI

RELEVANC * CONTEXT* PERMISSI

TRUST * CONTEXT *PERMISSI

RELEVANC * TRUST *CONTEXT * PERMISSI

Error

Total

Corrected Total

Type III Sumof Squares df Mean Square F Sig.

R Squared = .102 (Adjusted R Squared = .066)a.


Dependent Variable: ATTTOAD Attitude toward the ad

226.733a 15 15.116 5.828 .000

5298.096 1 5298.096 2042.868 .000

18.406 1 18.406 7.097 .008

63.515 1 63.515 24.490 .000

44.120 1 44.120 17.012 .000

64.572 1 64.572 24.898 .000

.110 1 .110 .043 .837

.008 1 .008 .003 .955

4.181 1 4.181 1.612 .205

.039 1 .039 .015 .903

.298 1 .298 .115 .735

8.445 1 8.445 3.256 .072

3.979 1 3.979 1.534 .216

.076 1 .076 .029 .864

.223 1 .223 .086 .770

.004 1 .004 .002 .968

.449 1 .449 .173 .678

982.921 379 2.593

6667.889 395

1209.654 394


Intercept

RELEVANC

TRUST

CONTEXT

PERMISSI

RELEVANC * TRUST

RELEVANC * CONTEXT

TRUST * CONTEXT


RELEVANC * PERMISSI

TRUST * PERMISSI


CONTEXT * PERMISSI




Error

Total

Corrected Total



39


Dependent Variable: ATTTOMED Attitude toward the medium

63.427a 15 4.228 1.713 .046

3055.673 1 3055.673 1238.094 .000

2.224 1 2.224 .901 .343

.322 1 .322 .130 .718

.649 1 .649 .263 .608

15.939 1 15.939 6.458 .011

.036 1 .036 .015 .904

1.727 1 1.727 .700 .403

22.443 1 22.443 9.093 .003

6.267 1 6.267 2.539 .112

2.276 1 2.276 .922 .337

.007 1 .007 .003 .957

1.641 1 1.641 .665 .415

.130 1 .130 .052 .819

.270 1 .270 .109 .741

.147 1 .147 .059 .808

1.794 1 1.794 .727 .394

932.921 378 2.468

4073.000 394

996.348 393


Intercept

RELEVANC

TRUST

CONTEXT

PERMISSI

RELEVANC * TRUST

RELEVANC * CONTEXT

TRUST * CONTEXT


RELEVANC * PERMISSI

TRUST * PERMISSI


CONTEXT * PERMISSI



RELEVANC * TRUST *

CONTEXT * PERMISSI

Error

Total

Corrected Total




Dependent Variable: PERCRISK Scale for Perceived Risk

315.531a 15 21.035 9.692 .000

6607.421 1 6607.421 3044.432 .000

1.382 1 1.382 .637 .425

13.346 1 13.346 6.149 .014

3.328 1 3.328 1.533 .216

269.311 1 269.311 124.088 .000

2.506 1 2.506 1.155 .283

2.832 1 2.832 1.305 .254

2.635 1 2.635 1.214 .271

.842 1 .842 .388 .534

.084 1 .084 .039 .844

2.408 1 2.408 1.109 .293

1.647 1 1.647 .759 .384

.851 1 .851 .392 .531

4.690 1 4.690 2.161 .142

.395 1 .395 .182 .670

.474 1 .474 .219 .640

822.555 379 2.170

7934.750 395

1138.086 394


Intercept

RELEVANC

TRUST

CONTEXT

PERMISSI

RELEVANC * TRUST

RELEVANC * CONTEXT

TRUST * CONTEXT


RELEVANC * PERMISSI

TRUST * PERMISSI


CONTEXT * PERMISSI




Error

Total

Corrected Total



Documents

CONSUMER ACCEPTANCE OF MOBILE ADVERTISING WITHIN A SOCIAL CONTRACT