Location Based Advertising - uni-muenchen.de · 2015-04-03 · Location Based Advertising Determinants of consumer acceptance and intention to use Claudius Warwitz ... Introduction

Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 1

Location Based AdvertisingDeterminants of consumer acceptance and intention touse

Claudius WarwitzUniversity of Bremen, GermanyChair of Innovative Brand Management

March, 13th. 2015

Chair of Innovative Brand Management (LiM®)

Big Data Conference, LMU

Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 2

Agenda

1. Why should anybody care about Location-Based

Advertising (LBA)?

2. State of the (Research) Art, Research Design & Qu estions

3. Preliminary Results

Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen

+ -

Nr. 3

LBA on the Smartphone: A Hot Topic, Controversially D iscussed!


What is LBA? - Meaning and Definition.

1 Unni, R./Harmon, R. (2007): Perceived effectiveness of push vs. pull mobile location-based advertising , in: Journal of Interactive advertising, Jg.7, Heft 2, S. 28

2 Kölmel, B., / Spiros A. (2002): "Location based adve rtising." The First International Conference on Mobile Business. 2002.

Mobile Advertising

Location BasedServices

� LBA as intersection set of:

1) Location Based Services (LBS)

2) Mobile Advertising (MA), i.e. mobile ads withoutcontextual location

� LBA can be defined as „targeted advertising initiatives delivered to a mobile device from an identified sponsor that is specific to the location of the consumer.”1

� “Advertisers could deliver contextually appropriate advertising messages through wireless devices on a geographically targeted basis and could reach mobile consumers when they are most likely to make a purchase ”2

Location Based

Advertising

SMS/MMS Campaigns

Mobile Couponing

Emergency Services

Friendsfinder

Navigation-services

Display-Ads

… …

Nr. 4


How does LBA work: Leveraging Big Data for Personalised , Context Aware, Local Targeting.

Geography/sensor/time layerMerchant adresses/smartphone

sensors/ weather/time/event calender

Context & location-based OfferPersonalized / real-time

User preferences & profile dataBrowsing and clicks (behavioral data)3rd party Intender / Expressed Intent

OffersBased on prior puchases / Display /

Local Search / SMS / MMS …

Demo/Psychographic LayerHH Income, size / age / gender /

education / PRIZM lifestyle categories

Geo-Positioning dataNetwork / GPS / WiFi

Adress /…

SMS/MMS/Push

notification

Mobile paymentsolutions

Source: Davis, T. (2013): Telco 2.0.: Making Money from Location Insights. An Operator Perspective on Location Insight Services, STL Partners .

BENEFITS:

� Efficient targeting foradvertising companies(less spreading losses)

� Local, context specific, highly relevant offers forconsumers

� Unlock new consumersegments in particularfor small businesses

Pot

entia

l Dat

a S

ourc

es

Nr. 5


Working Examples.

Nr. 6

O2 Facebook Aha Radio Apple Watch

� Geo-FencingSolution

� Introduction in Germany: May 2014

� Product Recommendations via SMS and MMS

� Compatible with all mobile Phones

� Offers as Coupons, redemption in the shop

� Small Business Solution

� Targeting, based on facebook consumerprofile, activities andlocation

� Smartphone Sensors to be usedto optimise targetingprecision andrelevance

� Introduced in the US already

� In Car – Solution� Driver gets Info

Commercials based on his car position anddirection

� Next Burger Chain, Hair Dresser etc.

� Usage of In Car „Spare Time“

� In Future: Car salesprice bound toopportunity to getaccess to car dash

� March 2015� industry’s first

programmatic ad platform for Apple Watch already in place

� hyper-local and relevant targeted ad delivery, e.g. ride-sharing alternatives in response to subway delays


Mobile Catching up in Advertising Space!

Nr. 7

0

5

10

15

20

25

30

35

40

45

TV Internet (PC) Mobile Internet Newspaper Magazines OOH Radio

2014 2017

Global Advertising Market Shares

-6%

+4%

+130%-20%

-20% +0% -9%

%

-X% Development


LBA In Europe: Market Worth EUR 1.5bn in 2018

CAGR´11-´18

+44%

+41%

EU 27

EU 5

Source: IDATE 2012-2013; EU5: GB, DE, FR, IT, SP

€ Mio

Nr. 8


Location Based Services Market Strongly Developing in Germany.

Source: Goldmedia

XY # of LBS Services

XY% YoY growth

Development of LB-Services in Germany

Nr. 9


Currently, LBA Market Very Fragmented

Nr. 10

LBA Specialists

Mobile operators

LBS and navigation providers

Location-aware applications and media

Mobile coupons and deals providers

Mobile search providers

AdMooveCityGrid MediaLEMON Mobile

Placecast, Verve MobileWHERE/PayPal Media

Network, xAd, Xtify, YOOSE

AT&T Mobility Orange Group

SFRTelefónica GroupVerizon Wireless

Weve – mobile operator joint

Appello SystemsIntersec

TeleNav, TelenityTelmap, TomTom

Waze

BadooFoursquare

GbangaSCVNGR/LevelUp

Shopkick

COUPIESGroupon

VouchercloudYourbanDeals

Yowza!!

HibuMobile Commerce

PoyntYelp and Qype

Proximity marketing providers

Traditional mobile advertising players

Major digital and telecom players

BLIP SystemsProximus Mobility

QwikkerScanbuy

InMobiJumptap

MadvertiseMillennial Media

NexageSofialys

AppleFacebook

GoogleMicrosoft

NokiaYahoo!

Source: Berg Insight, April 2014; http://www.berginsight.com/ReportPDF/ProductSheet/b i-lba3-ps.pdf

+ also bigretailers &

brands moveinto LBA


All Struggle With Advertising Paradox:Consumers Want Information But No Advertising.

So, How to do it right ??!

Info/Ads in Malls/High Streets(e.g. next ATM, Bakery, etc.)

Price-Comparison local offers

Local coupons, discounts

Sightseeing Information

Managing house lightning via mobile

Managing house heating via mobile

Lokation Info (e.g. Around me)

Mobile as TV remote control

What new local services would you appreciate?

Source: Goldmedia Analyse/Respondi 2013: Mobile Moni tor 01/2014, n=1000

Ads disturb me

I ignore ads best I can

I accept ads, because I benefit

(e.g. free apps)

I use an ad blocker

I like to getpersonalised ads

I find ads informative

What to you think about mobile advertising?

LBA-centric!

Nr. 11

Mobile as travel ticket


Working Hypotheses

Nr. 12

LBA based on big data will become a significant marketin g

channel for the majority of consumer brands

Stated privacy concerns seem to be an issue!

Brand managers need to know what will drive LBA consumer

acceptance


Adoption Research…

Source: 45 international peer-reviews scientific Stu dies (A-,B-,C-) Journals, Research Papers and Disser tations

# Tests (A)

# Positiv(B)

Determinants of Adoption

22 20 Relevance/Usefulness/Value

21 17 Entertainment/flow

16 14 Trust/controllability

16 13 Informativeness

13 11 Privacy

12 11 Subjective Norms

12 10 Credibility of ad

12 9 Irritation

# Tests(A)

# Positiv (B)


10 10 Attitude towards use of service

10 9 Personalisation/contextualoffering

8 6 Risk

7 4 Ease of use

6 5 Compatibility with task

6 5 Permission to send ads

6 4 Personal Innovativeness

5 5 Previous user experience

5 2 Effort expectancy

… … … (further until No. 51)

(A): Number of empirical tests with this determinant in sc ientific research studies (A, B Journals)

(B): Number of empirical tests in which this determinant s ignificantly influenced service adoption

Nr. 13


…Reveals First Relevant LBA Acceptance Factor Candidate s.

# Tests (A)

# Positiv(B)


22 20 Relevance/Usefulness/Value

21 17 Entertainment/flow

16 14 Trust/controllability

16 13 Informativeness

13 11 Privacy

12 11 Subjective Norms

12 10 Credibility of ad

12 9 Irritation

# Tests(A)

# Positiv (B)


10 10 Attitude towards use of service

10 9 Personalisation/contextualoffering

8 6 Risk

7 4 Ease of use

6 5 Compatibility with task

6 5 Permission to send ads

6 4 Personal Innovativeness

5 5 Previous user experience

5 2 Effort expectancy

… … … (further until No. 51)

Nr. 14

Source: 45 international peer-reviews scientific Stu dies (A-,B-,C-) Journals, Research Papers and Disser tations

(A): Number of empirical tests with this determinant in sc ientific research studies (A, B Journals)

(B): Number of empirical tests in which this determinant s ignificantly influenced service adoption


What´s missing …

Nr. 15

…and what is the impact of the

BRAND?


So…

Nr. 16

� Studies in Cultural different areas like US, Asia

� But, only 3 scientific publications in Germany

� Brand influence on consumer acceptance not researched until now.

� Authors claim further research need


Expert Estimate:Most Relevant LBA Adoption Determinants.

Ø Determinants of LBA Adoption (closed questions)(5= very important, 1= not important)

4,67 Information value

4,47 Privacy Concern

4,27 Marketing Effects like Brand Trust

4,07 Monetary incentive

4,00 Entertainment value

3,93 Personalization of LBA

3,47 Irritation when receiving LBA

2,93 Innovation affinity of consumer

Amount ofMentions

What other factors determine LBA usage intention?

5 Perceived usefulness

4 Relevancy of the ad

2 Ease of use

2 Social norm

1 Transparency (Why this ad?)

1 Prognosis capability of the app

1 Quality of content

1 Cost consciousness

� Duration: approx. 45 Min. -1,5h.� Modus: Explorative guided interviews personal and via phone� Duration 11/2013 – 04/2014� N = 15

Nr. 17

Interviewees: CEOs/entrepreneurs, product developer , telco- and retail experts, association members, consultants, market r esearcher, scientists.


Expert Estimate:Most Relevant LBA Adoption Determinants.

Ø Determinants of LBA Adoption (closed questions)(5= very important, 1= not important)

4,67 Information value

4,47 Privacy Concern

4,27 Marketing Effects like Brand Trust

4,07 Monetary incentive

4,00 Entertainment value

3,93 Personalization of LBA

3,47 Irritation when receiving LBA

2,93 Innovation affinity of consumer

Amount ofMentions

What other factors determine LBA usage intention?

5 Perceived usefulness

4 Relevancy of the ad

2 Ease of use

2 Social norm

1 Transparency (Why this ad?)

1 Prognosis capability of the app

1 Quality of content

1 Cost consciousness

� Duration: approx. 45 Min. -1,5h.� Modus: Explorative guided interviews personal and via phone� Duration 11/2013 – 04/2014� N = 15

Nr. 18

Interviewees: CEOs/entrepreneurs, product developer , telco- and retail experts, association members, consultants, market r esearcher, scientists.


Research Questions.

1 What acceptance factors determine the intention to use Big Data based LBA?

4 What marketing measures should be taken to decrease privacy risks and increase LBA adoption?

3 How important is the brand perception ? Differences on established brands and start-ups ?

5 What consumer segments show high LBA acceptance ?

2 What factors reduce the influence of the perceived privacy risks ?

Nr. 19


Research Model (Results: April 2015)

Consumer-Focused

Nr. 20

Brand Trust

Brand Authenticity

Privacy Concerns

UsageIntention

SocialNorms

Advertising Value

H1

H2b

H4bH6

H3

H5

H7a

H8a

Self-Efficacy

Entertain-ment Irritation

H10a

Rele-vance

Brand relatedVariables

Brand Image

LBA Attitude

H4a

H7b

H8b

H10b

H2a

Usage(not part ofresearchmodel)

BrandAttachmentH13a H13b

IncentivesH9a

H9b

Setting:� Online / Smartphone

Questionnaire, 1.250 German Smartphone-Users, that know or use LBA

� Results Expected April 2015


Brands

Nr. 21

Established Brands

Advertising Brands

Established Brands Start-ups

LBA-Supplier

Restauration FMCG Telco/Electronic Trade Retail


Preliminary Findings from Pre-Test

Nr. 22

Source:

� Online / Smartphone Questionnaire, 150 German Smart phone-Users, that know or use LBA

� Time-Frame: Dec 2014 - Jan 2015

1.) Big data privacy concern with no strong impact on LBA usage intention. Possible

reason: PRIVACY PARADOX.

3.) Brand related determinants: customers must „love“ advertised brands to really

accept personalised LBA

2.) Relevancy and entertainment of personalized LBA far m ore important

4.) Monetary incentive not main driver for LBA usage. At tractive brands/products by

far more important

5.) Customers: less students, more employees, less for mal education but with more

disposable Income and less privacy concerns


Thank You !

Questions ?

Documents

Location Based Advertising - uni-muenchen.de · 2015-04-03 · Location Based Advertising Determinants of consumer acceptance and intention to use Claudius Warwitz ... Introduction