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When do mobile ads work?

Companies mentioned in this article: American Marketing Association

CHICAGO, June 23, 2014 /PRNewswire-USNewswire/ -- With global spending on mobile advertising expected to reach $36 billion by 2016, an increasingly important goal for marketers is to know when mobile ads will work for their brands. According to new research published in the June 2014 issue of the American Marketing Association's Journal of Marketing Research, mobile ads are only suited to certain types of products: those that are both functional (or utilitarian) and "high involvement".

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The article provides guidance to marketers who are considering using mobile ads. The research, authored by Yakov Bart from INSEAD, Andrew Stephen from the University of Pittsburgh, and Miklos Sarvary from Columbia Business School, looked at ad testing data from 54 mobile display ad campaigns and 39,946 US consumers. Multiple industries were represented in the data, including automobiles, packaged goods, health, and finance. Products were categorized based on whether they were more utilitarian or hedonic, and whether they required higher or lower involvement when being considered by consumers. The key finding is that mobile display ads can increase brand favorability and purchase intent, but only for products that are more utilitarian (functional) and require higher involvement consideration. Mobile ads for more hedonic products (such as movie tickets) or lower involvement products were not found to be effective.

Why does this occur? The authors suggest that mobile ads - which are tiny banners on small screens that therefore convey very little information - are only effective when they remind consumers of information they already know about a particular product. In other words, mobile ads can work by jogging consumers' memories. Consequently, not only do consumers need to have some prior awareness and information about the product being featured in a mobile ad, but they also need to be motivated to think about the product information that was acquired prior to the mobile ad exposure. Products that engender greater thought tend to be more utilitarian and higher involvement.

Companies can use these new findings to predict whether their products are likely to benefit from mobile display ad campaigns. If marketers are planning a multi-channel campaign, for example, it might be advantageous to run the mobile display ads after first advertising the product in other media. That way, prior advertising would generate initial awareness and provide relevant information about the product, which could then be triggered when cued with a mobile ad.

About the American Marketing Association:
The American Marketing Association (AMA) is the professional association for individuals and organizations who are leading the practice, teaching, and development of marketing worldwide. Learn more at ama.org.

Contact: Christopher Bartone - 312.542.9029 - cbartone@ama.org

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SOURCE American Marketing Association