Tag Archives: advertising

Which products are best suited to mobile advertising?

March 5, 2017 373003oh Leave a comment

No doubt it is the first thing you look at when you wake up in the morning and the last thing you see before you go to sleep: your mobile phone. Imagine when checking the weather app before you leave the house a banner pops-up showing an ad for a new movie. What will be the chance that this banner will have any effect on you?

Mobile phones have become a part of our lives. According to eMarketer (2015a) US adults spend an average of 3 hours per day on mobile devices. Therefore, it is not surprising that global spending on mobile advertising has been rapidly growing up to more than $100 billion in 2016 (eMarketer, 2015b). Marketers want to grab the opportunity to capture your attention while browsing on your phone. However, marketers are not very happy with the effectiveness of their mobile advertising campaigns. Most of the time, they do not know what they are doing and are using a so-called ‘spray-and-pray’ mentality.

Research
Because of the large-scale investments that are being made in mobile advertising, a better understanding of factors affecting mobile advertising campaign performance is needed. This is where Bart et al. (2014) saw an opportunity for research. Their main question is: ‘Under what product-related conditions are mobile display advertisements effective in changing consumers’ product related attitudes and purchase intentions?’.

Bart et al. (2014) used a multi-campaign, multi-industry data set from a large U.S. market research agency. 39,946 consumers participated in their field study and completed a questionnaire about products featured in 54 mobile display ads from 2007 to 2010. This large and double mixed data set is one of the main strengths of the paper. The authors estimated Average Treatment Effects (the difference between the mean attitude or intention ratings in the exposed and control conditions) for attitude and intention, moderated by product involvement (high or low) and product type (utilitarian or hedonic).

Results
The most striking result from their study is that mobile display advertisements tend to only be effective for products that are both utilitarian and have high involvement, such as washing machines and family cars. These ads, on average, increased positive attitude by 4.5% and intention to buy by 6.7%, while hedonic and low involvement product ads (such as a sports car or toilet paper) had no effect.

An underlying psychological reason for this result is that high involvement goods are relevant and consumers are likely to have retained information about them. Even though mobile display ads do not include a lot of information they do have the ability to influence consumers by triggering their memory about a product that has already been assessed. In addition, a higher involvement with the product tends to be processed cognitively rather than emotionally, which is why mobile display ads work better for utilitarian products rather than hedonic products.

Implications
The main managerial implications of this study are that given a product, marketers can now better understand whether a mobile display ad will be effective or not. Also, given the decision of a marketer to invest in a mobile display advertisement campaign, they can have a better sense of what product to use and how to position this product in order to maximize campaign effectiveness.

So after reading these results and interesting findings, what do you think, will a banner on your phone showing a movie ad have an effect on you?

Sources:

Bart, Y., Stephen, A. T., & Sarvary, M. (2014). Which products are best suited to mobile advertising? A field study of mobile display advertising effects on consumer attitudes and intentions. Journal of Marketing Research, 51(3), 270-285.

eMarketer (2015a) Growth of Time Spent on Mobile Devices Slows available at: https://www.emarketer.com/Article/Growth-of-Time-Spent-on-Mobile-Devices-Slows/1013072

eMarketer (2015b) Mobile Ad Spend to Top 100 Billion Worldwide in 2016, 51% of Digital Market available at: (https://www.emarketer.com/Article/Mobile-Ad-Spend-Top-100-Billion-Worldwide-2016-51-of-Digital-Market/1012299

Articles

How communication channels impact word of mouth

March 5, 2017 aradavording Leave a comment

Word of mouth has become an important aspect of marketing. More specifically, word of mouth marketing is the most trusted form of marketing among consumers. According to Nielsen – a leading global provider of information and insights into what consumers watch and buy, 92 percent of consumers trust word of mouth and recommendations from friends and family above all other advertising forms (Nielsen.com, 2012). Moreover, there are different channels through which word of mouth can be communicated. Examples of communication channels include social media, e-mail, face to face, or instant messaging, to name a few. Berger and Iyengar (2013) aimed to study the effects of how the communication medium can shape the message of word of mouth.

The main aim of their study was to uncover whether self-enhancement motives (i.e. wanting to seem cool or smart) and synchronicity (i.e. level of delay between the statement and response) of the communication channel impacts the brand or product being discussed. Furthermore, the authors distinguished the communication channels according to their modality (i.e. spoken or written). After conducting five related studies – three experiments and two field studies, the authors found that modality in fact influences what is discussed. Writing rather than oral communication leads to more interesting products and brands being mentioned. Regarding the impact of synchronicity, the studies showed that the asynchronous nature of written communication allows for greater construct and refinement of the discussion. Furthermore, asynchrony provides the opportunity to self-enhance, which in turn affect topic selection. On the other hand, when consumers have very little time to construct and refine their message (e.g. in oral communication), or have little urge to self-present, accessibility drives the topic of discussion. In these situations, consumers are more inclined to mention brands or products that are top of mind, regardless of how interesting these brands or products may be. (Berger and Iyengar, 2013)

In summary, these findings indicate that written word of mouth is the communication channel that naturally leads to the discussion of more interesting brands and products. This includes written discussions in blog posts, online reviews, and social networking sites, among others. The findings of this study are more relevant for explaining consumer behavior, however some managerial implications can be considered. Taking these findings, and the aforementioned fact that word of mouth and recommendations are regarded as the trustworthiest marketing channel, into account, impacts companies’ word of mouth strategy. Corporate blogs, in which employees interact with consumers in a more informal setting, have been around for a while, and many companies have attempted to launch viral campaigns, in order to stimulate word of mouth among consumers. However, some of these viral campaigns have caused backlash. For instance, McDonalds attempted to stimulate word of mouth by asking their followers on Twitter to share their #McDStories. However, this did not pan out the way they expected, as one user tweeted the following #McDStories:

All in all, it is important for companies to carefully consider their word of mouth marketing campaigns, as online communication channels have allowed for more elaborate and witty responses among consumers. This links back to the theory suggested by Berger and Iyengar (2013) that written communication channels provide consumers for better construct and review of their statement. Despite good intentions, a campaign can always pan out differently, as #McDstories has showed.

References:

Nielsen.com. (2012). Nielsen: Global Consumers’ Trust in ‘Earned’ Advertising Grows in Importance | Nielsen. [online] Available at: http://www.nielsen.com/us/en/press-room/2012/nielsen-global-consumers-trust-in-earned-advertising-grows.html [Accessed 5 Mar. 2017].

Berger, J. and Iyengar, R. (2013). Communication Channels and Word of Mouth: How the Medium Shapes the Message. Journal of Consumer Research, 40(3), pp.567-579.

Articles

Online Display Advertising: Targeting and Obtrusiveness

February 28, 2017 mwilschut Leave a comment

We all have been in situations where you are browsing the internet and the advertising is targeted on the content on the website and they are shown to you. Hereby, advertising is targeted. And what is maybe even more intrusive, that the advertising pops up. It definitely gets your attention. However, are you more willing to click on the advertising and buy the product? This is what Goldfarb & Tucker (2011) researched. They study the effect of targeted display advertising and obtrusiveness on sales, and what the effect is when these two are combined.

This question is interesting. Because even with all these new techniques, display advertising success drops. People avoid online display advertising because they infer them in their browsing goals (Drèze & Hussherr 2003). Do obtrusive advertising works exactly in the opposite way and affects the effectiveness of advertising negatively?

To find out, this study uses data from a large randomized field experiment on 2,892 web advertising campaigns. For every campaign on average 852 surveys were distributed. Where the half of them were to consumers who have seen the advertising and the other half were on the website without the advertisement on it.

The main results of this study are that targeting the advertising improves the effectiveness of online display advertising and obtrusiveness does also. However, when these two techniques are combined the effectiveness decreases. This is because privacy concerns temper the appreciation of formativeness in targeted advertising. So, for advertising in categories where privacy matters more, the effect is tempered more than in categories where privacy matters less.

The strength of this paper is the fact that it, in contrast to earlier research, propose that obtrusive advertising is not very effective in the contextually targeted situations. Earlier research study the effect of the obtrusiveness on advertising recall, which is of course positive. By adding the privacy concerns and the feelings of manipulation to the fact that advertising can be perceived as useful makes advertising perceived as intrusive, and therefore result the effectiveness negatively.

This paper shows a reason for the unexpected success of search advertising, where the advertising is highly targeted on the context (the advertising is based on search keywords) but is absolutely not obtrusive or attractive. For managers, this means that in choosing the right way to advertise they must not only consider whether to target their audience with contextually targeted advertising, but also consider the negative influence if these advertisements are obtrusive. Economically, 5.3 percent of advertising spending could be cut, without affecting the effectiveness of advertising. This, solely because the wrong combination of advertising content and format is used.

In short terms, either choose to reach your audience with targeted advertising, or with obtrusive advertising. But don’t combine the two.

Drèze, X. & Hussherr, F.X., 2003. Internet advertising: Is anybody watching? Journal of Interactive Marketing, 17(4), pp.8–23.

Goldfarb, A. & Tucker, C., 2011. Online Display Advertising: Targeting and Obtrusiveness. Marketing Science, 30(3), pp.389–404.

Articles

Personalized Online Adverstising Effectiveness: The Interplay of What, When, and Wher

February 16, 2017 382963aj Leave a comment

If you go to any website, or online store specifically, your behaviour is tracked. Landing page, time spent, clicks, exit page: you name it, it is tracked. But even when you leave a page, a company does not really leave you: they saw what you clicked on, and based on your browsing behaviour, they retarget you: they show you a (sometimes personalized) advertisement on another channel, hoping you will come back and purchase the product you viewed.

Retargeting can either be done during or after a website visit, and is done based on a customer’s visit. When showing personalized recommendations, for example, it is important to take into account the quality of the recommendation, the level of personalization and the timing. This is what Bleier & Eisenbeiss (2015) looked at: what should they show, when should they show it, and where should they show it.

As with any academic article, past literature is analysed and hypothesis are developed. In order to test the what, when and where of personalized online advertising effectiveness, Bleier & Eisenbeiss conduct two large-scale field experiments and two lab-experiments. The first field experiment looked at the interplay of degree of content personalization(DCP), state, and the time that has passed since the last online store visit, at a large fashion and sports goods retailer, who carries over 30000 products. The second field experiment, conducted at the same retailer, looked at the interplay of placement and personalization. Based on the results from these two field experiments, two lab experiments were designed: one focussing on web browsing in an experiential model, the other focussing on goal-direct web browsing.
Within this paper, thus, many things are studied and confirmed. The papers shows the importance of how to determine the effectiveness of online personalization’s, and which one works best when. When a customer sees a personalized ad right after his/her website visit, the ad becomes more effective. This is mainly because preferences are not constant: they can over time. Thus if you liked a shirt 5 minutes ago, you will mostly still like it now. Thus if a company is able to directly respond to a consumer’s behaviour, the CTR is expected to be higher.

While the effectiveness of recommendations decreases over time, the level of personalization plays a moderating role. This means that high-level personalization in later stages of the decision making process have lower effectiveness, because of changes in customers tastes’ and preferences. The personalized ad is therefore not applicable anymore. Thus, the more personalized an ad, the sooner after a website visit it should be sent. Moderate personalized ads are thus more effective over time, as they take into account these changes in preferences. As visual recommendations are often highly personalized, these type of recommendations are more relevant shortly after a visit. Cross-sell recommendation, which is a more moderate recommendation type, performs better later in time

So what does this all mean? When retargeting customers and showing them personalized ads, it is important to keep in mind how long ago they visited a website. Given that this research was performed at a large fashion/sports retailer, it would be interesting to see whether the same conclusions hold for other settings. What do you think? And when do you consider (personalized) ads target to you most effective?

Bleier, A., & Eisenbeiss, M. (2015). Personalized Online Adverstising Effectiveness: The Interplay of What, When, and Where. Marketing Science, 669-688.

Business Case

Crowdsourcing ad campaigns – the future of advertising?

April 27, 2015 332466bb Leave a comment

With massive amounts of information available online, consumers are increasingly better informed about companies and their offerings (1). These advances increase the bargaining power of consumers and show how focus has shifted from the company towards the consumer (2). The process of advertising and content creation is thus changing. Agency-created advertising is not expected to disappear, but nowadays the demand for continually-refreshed materials is growing rapidly. By crowdsourcing new content, brands can use passion and insights from consumers and provide authentic marketing communications (3). The number of platforms where companies can run open pitches for their advertising has rapidly grown and the European Commission (1) expects the volume to grow to €5.5 billion in 2015. An example is the social crowdsourcing platform Zooppa, which allows for brands and agencies to place advertising contests in order to generate advertising campaigns. It offers ‘a cost-effective, strategic approach to engage consumers, build online word-of-mouth and gain customer insights’ (4). The company states that its main challenge is to open the minds of the industry towards these new ways of working and acquiring content, instead of building on an reusing one ‘hero’ tv ad (3). For each contest, a creative brief is provided. By submitting designs for video, print, concepts, audio or banner advertising, over 300,000 active members (5), both professionals and amateurs, compete for money and other prizes. Users can vote and comment on submissions of others. This peer feedback plays an important role, since it can facilitate additional learning opportunities, but also provides social value and recognition to users (Franke, Keinz & Schreier, 6). By participating in Zooppa contests, users can grow their portfolio and have it seen by millions (7). The company does not pre-select contributors based on their qualifications or context specific as described by Geiger et al. (10). Contibutors only have to register and complete a personal profile (Facebook account or e-mail address). The quality of submissions can be controlled in various ways (8). Zooppa uses e.g. specific terms and conditions regarding ownership of submitted materials and peer evaluation of content. For each competition both Jury awards (assigned by clients) and Community awards (based on community votes) are handed out. Providing several prizes (monetary prizes as well as awards) is described (8) as the best way to target asymmetrically skilled individuals (professionals as well as amateurs). This way, participation from weaker players increases, and competition and effort by strong players increases as well (Sisak, 9). Remuneration is probably a major reason for creatives contributing to Zooppa. But also intrinsic motivations such as glory and love (Zooppa displays ‘featured members’ on the homepage with a picture, the projects they contributed to and how much money they won) (8) can be reasons for contribution. A successful example is the sustainability campaign of Siemens. ‘By crowdsourcing video stories Siemens obtained hundreds of unique, authentic content pieces used across channels, all at less than the cost of producing one average TV commercial’ (3). An example of a smaller brand is Mike’s Hard Lemonade Company, which posted contests to obtain can designs and names for new flavors. The winning designs were voted for by consumers (11) and the company included the names of the winners on the cans (3) to build engagement. Concluding, the Zooppa platform sounds like an ideal way for companies to crowdsource their advertising campaigns. However, it remains unclear how many professionals vs amateurs submit ideas and whether the resulting winning ads are truly user-generated (as the company repeatedly states).

References
(1) Walter, E. (2012).
(2) European Commission (2014).
(3) AdLibbing (2014).
(4) Globe Newswire (2012).
(5) Zooppa (2015).
(6) Franke, Keinz & Schreier (2008). Complementing Mass Customization Tookits with User Communities: How Peer Input Improves Customer Self-Design. Journal of product innovation management.
(7) Zooppa (2015).
(8) Tsekouras, D. (2015). Session 3 Ideas & Designs. Customer Centric Digital Commerce.
(9) Sisak, D. (2008). Multiple-prize contests – the optimal allocation of prizes. Journal of Economic Surveys.
(10) Geiger, D., Seedorf, S., Schulze, T., Nickerson, R.C., Schader, M. (2011). Managing the Crowd: Towards a Taxonomy of Crowdsourcing Processes. (2011). AMCIS 2011 Proceedings – All Submissions. Paper 430.
(11) PRNewswire (2014).