Location Based Advertising - Determinants of consumer acceptance and intention to use
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Big Data Conference, LMU Chair of Innovative Brand
Management (LiM®)
Location Based Advertising
Determinants of consumer acceptance and intention to
use
Claudius Warwitz
University of Bremen, Germany
Chair of Innovative Brand Management
March, 13th. 2015
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 1Agenda
1. Why should anybody care about Location-Based
Advertising (LBA)?
2. State of the (Research) Art, Research Design & Questions
3. Preliminary Results
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 2LBA on the Smartphone: A Hot Topic, Controversially Discussed! + - Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 3
What is LBA? - Meaning and Definition.
Mobile Location Based LBA as intersection set of:
Advertising Services
1) Location Based Services (LBS)
2) Mobile Advertising (MA), i.e. mobile ads without
contextual location
SMS/MMS Navigation-
Campaigns services
Location LBA can be defined as „targeted advertising
Mobile Emergency
initiatives delivered to a mobile device from
Couponing Based Services
an identified sponsor that is specific to the
Advertising Friends location of the consumer.”1
Display-
Ads finder
… …
“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
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 advertising." The First International Conference on Mobile Business. 2002.
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 4How does LBA work: Leveraging Big Data for Personalised,
Context Aware, Local Targeting.
BENEFITS:
Context & location-based Offer Efficient targeting for
Personalized / real-time
SMS/MMS/P Mobile advertising companies
ush payment (less spreading losses)
notification solutions
Offers Local, context specific,
Based on prior puchases / Display / highly relevant offers for
Local Search / SMS / MMS … consumers
Potential Data Sources
Unlock new consumer
User preferences & profile data segments in particular
Browsing and clicks (behavioral data) for small businesses
3rd party Intender / Expressed Intent
Demo/Psychographic Layer
HH Income, size / age / gender /
education / PRIZM lifestyle categories
Geography/sensor/time layer
Merchant adresses/smartphone
sensors/ weather/time/event calender
Geo-Positioning data
Network / GPS / WiFi
Adress /…
Source: Davis, T. (2013): Telco 2.0.: Making Money from Location Insights. An Operator Perspective on Location Insight Services, STL Partners .
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 5Working Examples.
O2 Facebook Aha Radio Apple Watch
Geo-Fencing Small Business In Car – Solution March 2015
Solution Solution Driver gets Info industry’s first
Introduction in Targeting, based on Commercials based on programmatic ad
Germany: May 2014 facebook consumer his car position and platform for Apple
Product profile, activities and direction Watch already in place
Recommendations location Next Burger Chain, hyper-local and
via SMS and MMS Smartphone Hair Dresser etc. relevant targeted ad
Compatible with all Sensors to be used Usage of In Car delivery, e.g. ride-
mobile Phones to optimise targeting „Spare Time“ sharing alternatives in
precision and response to subway
Offers as Coupons, relevance In Future: Car sales delays
redemption in the price bound to
shop Introduced in the US opportunity to get
already access to car dash
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 6Mobile Catching up in Advertising Space!
% Global Advertising Market Shares
45
-6%
40
35
30
25
+4%
20
-20%
15 +130%
10
-20% +0% -9%
5
0
TV Internet (PC) Mobile Internet Newspaper Magazines OOH Radio
2014 2017 -X% Development
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 7LBA In Europe: Market Worth EUR 1.5bn in 2018
€ Mio
CAGR
´11-´18
EU 27
+44%
EU 5
+41%
Source: IDATE 2012-2013; EU5: GB, DE, FR, IT, SP
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 8Location Based Services Market Strongly Developing in
Germany.
Development of LB-Services in Germany
XY # of LBS Services
XY% YoY growth
Source: Goldmedia
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 9Currently, LBA Market Very Fragmented
Location-aware applications Proximity marketing
LBA Specialists
and media providers
AdMoove Badoo BLIP Systems
CityGrid Media Foursquare Proximus Mobility
LEMON Mobile Gbanga Qwikker + also big
Placecast, Verve Mobile SCVNGR/LevelUp Scanbuy retailers &
WHERE/PayPal Media Shopkick brands move
Network, xAd, Xtify, YOOSE
into LBA
Mobile coupons and deals Traditional mobile advertising
Mobile operators
providers players
AT&T Mobility COUPIES InMobi
Orange Group Groupon Jumptap
SFR Vouchercloud Madvertise
Telefónica Group YourbanDeals Millennial Media
Verizon Wireless Yowza!! Nexage
Weve – mobile operator joint Sofialys
Major digital and telecom
LBS and navigation providers Mobile search providers
players
Appello Systems Hibu Apple
Intersec Mobile Commerce Facebook
TeleNav, Telenity Poynt Google
Telmap, TomTom Yelp and Qype Microsoft
Waze Nokia
Yahoo!
Source: Berg Insight, April 2014; http://www.berginsight.com/ReportPDF/ProductSheet/bi-lba3-ps.pdf
Nr.
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen
10All Struggle With Advertising Paradox:
Consumers Want Information But No Advertising.
What new local services would What to you think about
you appreciate? mobile advertising?
Info/Ads in Malls/High Streets
(e.g. next ATM, Bakery, etc.) LBA- Ads disturb me
Price-Comparison local offers centric!
I ignore ads
Local coupons, discounts best I can
Mobile as travel ticket I accept ads,
because I benefit
(e.g. free apps)
Sightseeing Information
Managing house lightning via I use an ad
mobile blocker
Managing house heating via I find ads
mobile informative
Lokation Info (e.g. Around
me) I like to get
Mobile as TV remote control personalised ads
Source: Goldmedia Analyse/Respondi 2013: Mobile Monitor
01/2014, n=1000 So, How to do it right ??!
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 11Working Hypotheses
LBA based on big data will become a significant marketing
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
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 12Adoption Research…
# # Determinants of Adoption # # Determinants of Adoption
Tests Positiv Tests Positiv
(A) (B) (A) (B)
22 20 Relevance/Usefulness/Value 10 10 Attitude towards use of service
10 9 Personalisation/contextual
21 17 Entertainment/flow offering
16 14 Trust/controllability 8 6 Risk
7 4 Ease of use
16 13 Informativeness
6 5 Compatibility with task
13 11 Privacy Permission to send ads
6 5
12 11 Subjective Norms 6 4 Personal Innovativeness
5 5 Previous user experience
12 10 Credibility of ad
5 2 Effort expectancy
12 9 Irritation … (further until No. 51)
… …
(A): Number of empirical tests with this determinant in scientific research studies (A, B Journals)
(B): Number of empirical tests in which this determinant significantly influenced service adoption
Source: 45 international peer-reviews scientific Studies (A-,B-,C-) Journals, Research Papers and Dissertations
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 13…Reveals First Relevant LBA Acceptance Factor Candidates.
# # Determinants of Adoption # # Determinants of Adoption
Tests Positiv Tests Positiv
(A) (B) (A) (B)
22 20 Relevance/Usefulness/Value 10 10 Attitude towards use of service
10 9 Personalisation/contextual
21 17 Entertainment/flow offering
16 14 Trust/controllability 8 6 Risk
7 4 Ease of use
16 13 Informativeness
6 5 Compatibility with task
13 11 Privacy
6 5 Permission to send ads
12 11 Subjective Norms 6 4 Personal Innovativeness
5 5 Previous user experience
12 10 Credibility of ad
5 2 Effort expectancy
12 9 Irritation … (further until No. 51)
… …
(A): Number of empirical tests with this determinant in scientific research studies (A, B Journals)
(B): Number of empirical tests in which this determinant significantly influenced service adoption
Source: 45 international peer-reviews scientific Studies (A-,B-,C-) Journals, Research Papers and Dissertations
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 14What´s missing …
…and what is the impact of the
BRAND?
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 15So…
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
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 16Expert Estimate:
Most Relevant LBA Adoption Determinants.
Interviewees: CEOs/entrepreneurs, product developer, telco- and retail
experts, association members, consultants, market researcher, scientists.
Ø Determinants of LBA Adoption Amount of What other factors determine LBA
Mentions
(closed questions) usage intention?
(5= very important, 1= not important)
4,67 Information value 5 Perceived usefulness
4,47 Privacy Concern 4 Relevancy of the ad
4,27 Marketing Effects like Brand Trust 2 Ease of use
4,07 Monetary incentive 2 Social norm
4,00 Entertainment value 1 Transparency (Why this ad?)
3,93 Personalization of LBA 1 Prognosis capability of the app
3,47 Irritation when receiving LBA 1 Quality of content
2,93 Innovation affinity of consumer 1 Cost consciousness
Duration: approx. 45 Min. -1,5h.
Modus: Explorative guided interviews personal and via phone
Duration 11/2013 – 04/2014
N = 15
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 17Expert Estimate:
Most Relevant LBA Adoption Determinants.
Interviewees: CEOs/entrepreneurs, product developer, telco- and retail
experts, association members, consultants, market researcher, scientists.
Ø Determinants of LBA Adoption Amount of What other factors determine LBA
Mentions
(closed questions) usage intention?
(5= very important, 1= not important)
4,67 Information value 5 Perceived usefulness
4,47 Privacy Concern 4 Relevancy of the ad
4,27 Marketing Effects like Brand Trust 2 Ease of use
4,07 Monetary incentive 2 Social norm
4,00 Entertainment value 1 Transparency (Why this ad?)
3,93 Personalization of LBA 1 Prognosis capability of the app
3,47 Irritation when receiving LBA 1 Quality of content
2,93 Innovation affinity of consumer 1 Cost consciousness
Duration: approx. 45 Min. -1,5h.
Modus: Explorative guided interviews personal and via phone
Duration 11/2013 – 04/2014
N = 15
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 18Research Questions.
What acceptance factors determine the intention to use Big Data
1
based LBA?
2 What factors reduce the influence of the perceived privacy risks?
How important is the brand perception? Differences on established
3
brands and start-ups?
What marketing measures should be taken to decrease privacy risks and
4
increase LBA adoption?
5 What consumer segments show high LBA acceptance?
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 19Research Model (Results: April 2015)
Consumer-Focused
Privacy
Concerns
H1
Brand Brand
Authenticity H10b
Brand related H10a Trust
Variables
Brand Usage
Brand Image Attachment Usage
H13a H13b Intention
(not part of
research
Social model)
H7b
Norms
H7a
H8b
Self-
H8a
Efficacy
H9b
H2b
H9a
Incentives
Setting:
LBA
H2a Attitude Online / Smartphone
Questionnaire, 1.250
H3
German Smartphone-Users,
H4a Advertising that know or use LBA
Value
H6 Results Expected April 2015
H4b H5
Entertain Rele-
vance Irritation
-ment
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 20Brands
Established Brands
Advertising Brands Restauration FMCG Telco/Electronic Trade Retail
Established Brands Start-ups
LBA-Supplier
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 21Preliminary Findings from Pre-Test
1.) Big data privacy concern with no strong impact on LBA usage intention. Possible
reason: PRIVACY PARADOX.
2.) Relevancy and entertainment of personalized LBA far more important
3.) Brand related determinants: customers must „love“ advertised brands to really
accept personalised LBA
4.) Monetary incentive not main driver for LBA usage. Attractive brands/products by
far more important
5.) Customers: less students, more employees, less formal education but with more
disposable Income and less privacy concerns
Source:
Online / Smartphone Questionnaire, 150 German Smartphone-Users, that know or use LBA
Time-Frame: Dec 2014 - Jan 2015
Univ.-Prof. Dr. Christoph Burmann, Lehrstuhl für innovatives Markenmanagement (LiM), Universität Bremen Nr. 22Thank You !
Questions ?
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