Permission-based location-aware mobile advertising: Understanding the consumer s intention to use

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Permission-based location-aware mobile advertising: Understanding the

consumer’s intention to use

Introduction

The rapid growth of mobile advertising derives from organisations increasing appreciation of mobile advertising’s ability to reach almost any person, in any place, at anytime (Haghirian & Madlberger, 2005). This unprecedented reach to consumers is an advertising first, and has been strengthened with the recent increase in mobile phone users, innovation, and

convergence of technologies (Mobile Marketing Association 2010).

Whilst mobile advertising’s expected growth has been aggressively projected, modest empirical evidence has been collected to evaluate the expected consumer response. Existing research has shown that attitude (Haghirian & Madlberger, 2005; Oh & Xu, 2003), subjective norms (Bauer, Reichardt, Barnes, & Neumann, 2005) and perceived behavioural control (Jayawardhena, Kuckertz, Karjaluoto, & Kautonen, 2009) are significant influences on individuals’ likelihood of accepting mobile advertising. However, there is no current research which has tested these constructs collectively.

The objective of this study is to empirically test individuals’ behavioural intentions of using mobile advertising. This is achieved by adapting Ajzen’s (1985, 1991) theory of planned behaviour as the guiding research model framework. The model will test how attitudes, subjective norms and perceived behavioural control towards mobile advertising affects the behavioural intentions of use. The benefits of this study is that it will contribute to both marketing theory and practice. The main extension to marketing theory is that this study will be the first to utilise and test Ajzen’s theory of planned behaviour in a mobile advertising context.

The paper reviews existing research with respect to permission-based location-aware mobile advertising (PBLAMA) and digital natives. A conceptual model is then developed, followed by a description of the research method and data collection. The research results are then presented and discussed.

Mobile advertising, mobile marketing (Tähtinen, 2005), wireless advertising (Krishnamurthy, 2003) or wireless advertising messaging (Petty, 2003) is in its academic infancy, with the first research study published in 2001 (Leppäniemi, Sinisalo, & Karjaluoto, 2006; Oh & Xu, 2003). However, as mobile commerce’s utility increases, so does the academic interest in mobile advertising (Bergeron, 2001; Kalakota & Robinson, 2001; Keen & Mackintosh, 2001; Lamont, 2001; Newell & Lemon, 2001). Currently, little progress has been made in

universally defining mobile advertising.

Through the advancement of ‘location-aware’ technologies, mobile advertisers can now send messages to cellular subscribers based on their geographic location (Oh & Xu, 2003; Zoller, Housen, & Matthews, 2001). These technologies include Bluetooth, wireless application protocol (WAP), global positioning systems (GPS) and infrared technology (Leppäniemi, et al., 2006). The ability of mobile advertisers to use location-aware advertising heightens consumers’ concerns of the privacy and protection of their personal information (Haghirian & Madlberger, 2005). These concerns illustrate the need for mobile advertising to be

permission-based, where the consent of the recipient is required before any mobile advertising activity is enacted (Godin, 1999). Research has shown that consumers demonstrate higher trust in brands who seek their permission before sending mobile advertising to them (Jayawardhena, et al., 2009).

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‘Digital natives’, the ‘net generation’, or the ‘millennials’ are early and substantial adopters of new communication technologies (Howe & Strauss, 2000; Strauss & Howe, 2003; Tapscott, 1998). Digital natives are individuals aged between 16 and 30 (Bennett, Maton, & Kervin, 2008) who have grown up with information and communication technology as a part of their everyday lives and are now dependent on it for accessing information and communicating with others (Frand, 2000; Oblinger & Oblinger, 2005; Prensky, 2001b; Tapscott, 1999). Their response to new technologies often shapes the success or failure of the technology (Prensky, 2001a).

Conceptual model and hypothesis

Figure 1 depicts the conceptual model which is discussed more fully below. Eight constructs, adapted from the theory of planned behaviour, advertising, and information technology related literature, are considered to influence the intention to use permission-based location aware mobile advertising (PBLAMA).

Figure 1: Conceptual model

Entertainmentis the ability of an advertisement to promote enjoyment (Elliott & Speck, 1998; Mitchell & Olson, 1981; Shimp, 1981). Existing literature suggests that entertainment

significantly affects behavioural intentions towards behaviour in a general (Ducoffe, 1995), Internet (Ducoffe, 1996) and mobile advertising context (Oh & Xu, 2003).

H1: PBLAMA entertainment will have a significant positive relationship on the

behavioural intentions of using PBLAMA.

Informativeness is the supplying of information through an advertisement. Existing literature suggests that informativeness significantly affects behavioural intentions towards behaviour in a general (Ducoffe, 1995), Internet (Ducoffe, 1996) and mobile advertising context (Oh & Xu, 2003). Entertainment Informativeness Irritation Credibility Personal relevance Incentive enticement Subjective norms Perceived behavioural control Intention to use PBLAMA H1 H2 H3 H4 H5 H6 H7 H8

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H2: PBLAMA informativeness will have a significant positive relationship on the

behavioural intentions of using PBLAMA.

Irritation is the indignity that people feel when addressed by an advertisement (Aaker & Bruzzone, 1985; Shavitt, Lowrey, & Haefner, 1998). Existing literature suggests that irritation significantly affects behavioural intentions towards behaviour in a general context (Ducoffe, 1995).

H3: Irritation towards PBLAMA will have a significant negative relationship on the

behavioural intentions of using PBLAMA.

Credibility is consumers’ perceptions of advertisings truthfulness and believability

(MacKenzie & Lutz, 1989). Existing literature suggests that credibility significantly affects behavioural intentions towards behaviour in an Internet (Brackett & Carr Jr., 2001) and mobile advertising context (Haghirian & Madlberger, 2005).

H4: PBLAMA credibility will have a significant positive relationship on the behavioural

intentions of using PBLAMA.

Personal relevance is the amount an individual is involved and satisfied by an advertisement (Leppäniemi & Karjaluoto, 2005). Existing literature suggests that personal relevance

significantly affects behavioural intentions towards behaviour in a television context (Lastovicka, 1983).

H5: PBLAMA personal relevance will have a significant positive relationship on the

behavioural intentions of using PBLAMA.

Incentive enticement is the way in which consumers are lured into accepting advertising (Haghirian, Madlberger, & Tanuskova, 2005; Leppäniemi & Karjaluoto, 2005). Whilst no empirical testing has been completed in the mobile advertising context, it is suggested that the impact of incentives offered by brands and telecommunication companies would be of further interest to investigate. This study develops a new scale to test incentive enticement. This scale measures how behavioural intentions towards PBLAMA are influenced by incentive

enticements holistically and through specified brand and telecommunication incentives H6: PBLAMA incentives will have a significant positive relationship on the intention of

using PBLAMA.

Subjective norms are social pressures to perform or not to perform a specific behaviour (Ajzen, 1991). Existing literature suggests that subjective norms significantly affect behavioural intentions towards a behaviour (Bauer, et al., 2005; Madden, Ellen, & Ajzen, 1992).

H7: PBLAMA subjective norms will have a significant positive relationship on the

intention of using PBLAMA.

Perceived behaviour control (PBC) is an individual’s perception of the ease or difficulty of performing a specific behaviour (Ajzen, 1991). Existing literature suggests that PBC significantly affects behavioural intentions towards accepting a specific behaviour in a computer based (Compeau & Higgins, 1995; Venkatesh & Davis, 1996) and mobile commerce context (Jayawardhena, et al., 2009). Ajzen also suggests that behavioural

intentions can be impacted by the level of controllability an individual feels towards a specific behaviour.

H8: PBLAMA perceived behaviour control will have a significant positive relationship on

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Research Design

The scales, apart from incentive enticement, were adapted from the existing literature for the PBLAMA context. For incentive enticement, a new scale was developed and tested

specifically for the purposes of this study. The study population were digital natives; marketing students studying at either the 100 or 300 level at Victoria University of

Wellington. Digital natives’ are seen as relevant to this study since mobile phones are relied upon in this grouping’s daily life (Prensky, 2001a). Data collection was via a voluntary, anonymous online self-administered questionnaire through the university support website. Participants were invited to click on a link which took them to the survey.

Results and discussion

The survey generated 276 responses, of which 260 were usable. The ratio of response favoured females (59%) over males (41%). All respondents indicated that they owned a mobile phone.

SPSS version 18 was used to conduct CFA with Varimax rotation where applicable. Each item loaded appropriately on the respective construct and each construct’s Cronbach’s alpha met the minimum criteria (>.70)(Nunnally & Bernstein, 1994), see Appendix A for details. To estimate the proportion of variance in intention to use PBLAMA that can be accounted for by entertainment, informativeness, irritation, credibility, personal relevance, incentive

enticement, subjective norms, and PBC multiple regression analysis was performed. In combination these factors accounted for a significant 53.9% of the variability in intention to use PBLAMA, R2 = .539, adjusted R2 = .525, F(8, 251) = 36.72, p < .001. Unstandardised (B) and standardised (β) regression coefficients, and squared semi-partial correlations (sr2) for each predictor in the regression model are reported in Table 1.

Table 1: Regression model with intention to use PBLAMA as dependent variable

Variable B[95% CI] β sr2 Entertainment .280[.160, 400]** .270 0.039 Informativeness .171[.013, .329]* .130 0.008 Irritation -.113[-.219, -.007]* -.098 0.008 Credibility .046[-.074, .166] .039 0.001 Personal relevance .068[-.063, .199] .057 0.002 Incentive enticement .172[.045, .299]* .133 0.013 Subjective norms .272[.157, .386]** .238 0.040 PBC .198[.028, .367]* .119 0.010

Note: n = 260, CI = confidence interval. *p < .05, **p < .001

H1 is supported by this research demonstrating that entertainment significantly and positively influences digital natives’ behavioural intentions of using PBLAMA. This supports Madden, et al. (1992) by illustrating that significant and positive attitudes lead to positive behavioural intentions. Entertainment shows the highest explanatory power of all the predictor variables, and illustrates the importance of incorporating entertainment into PBLAMA. As a

consequence the more entertaining digital natives find PBLAMA, the higher their behavioural intentions will be of using PBLAMA.

H2 is supported by the results demonstrating informativeness as significantly and positively influencing digital natives’ behavioural intentions of using PBLAMA. This further supports Madden, et al. (1992) results of attitudes having a causal relationship to behavioural

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intentions. This result indicates that the more informative digital natives find PBLAMA, the higher their behavioural intentions will be of using PBLAMA.

H3 is supported; irritation with mobile advertisements negatively influences behavioural intentions to use PBLAMA. This result does not supports Ducoffe (1996) and Oh and Xu (2003) findings, but does illustrate the ability of Ducoffe’s (1995) irritation scale to transfer from a general context to a specific context (such as Internet or mobile advertising).

H4 is not supported; credibility towards mobile advertisements does not significantly predict behavioural intentions to use PBLAMA. This result does not support previous findings in the Internet and mobile environment (Brackett & Carr Jr., 2001; Haghirian & Madlberger, 2005). H5 is not supported; there was no direct relationship between personal relevance and the behavioural intentions of using PBLAMA. The lack of relationship between personal relevance and behavioural intentions of using PBLAMA may be due to the utilised scale (Lastovicka, 1983) being designed for the television context. Previous research has shown marked difference in attitudes towards different advertising mediums (Ducoffe, 1995) and with mobile advertising being inherently different to mass-advertising (Balasubramanian, Peterson, & Jarvenpaa, 2002), this could could explain personal relevance’s insignificance. H6 is supported by the results, demonstrating incentive enticement significantly and positively influencing digital natives’ behavioural intentions of using PBLAMA. As far as the authors understand this is the first study to empirically test the role of incentive enticement within a PBLAMA context, and provides evidence to support suggestions of incentive enticements role in making mobile advertising more attractive (Leppäniemi & Karjaluoto, 2005). As a consequence of this result, this research shows that the better incentives digital natives receive, the higher their behavioural intentions are of using PBLAMA.

H7 is supported by the results; subjective norms significantly and positively influence digital natives’ behavioural intentions of using PBLAMA. Subjective norms show the second highest explanatory power of all the predictor variables. This highlights the importance of taking individuals subjective norms into consideration when designing PBLAMA. As a consequence of this result, the more favourable digital natives’ subjective norms are of using PBLAMA, the higher their behavioural intentions will be of using PBLAMA. H8 is supported by the results; perceived behavioural control significantly and positively influences behavioural intentions to use PBLAMA. This result indicates that the greater the perceived behavioural control higher, the higher the behavioural intentions to use PBLAMA.

The results indicate that entertainment, informativeness, irritation and incentive enticement are four significant attitudes digital natives’ hold towards PBLAMA. This illustrates that for PBLAMA to be effective, it must be entertaining, informative, not irritating and include some form of incentive (whether it be brand or telecommunication discount). Furthermore, to support digital natives’ attitude formation towards using PBLAMA, PBLAMA needs to be portrayed as attractive not only to the individual planning to use it, but to the referent people surrounding that individual. This illustrates the importance of communicating the benefits of PBLAMA to a wider group than just the targeted audience, as the people surrounding

potential users will have impact on their decision making process.

Finally, to increase perceived behavioural control, marketers need to communicate and provide easy to use supporting information and aid in how to operate it.Limitations include assuming behavioural intentions infer actual behaviour (Ajzen, 1991); generalisation based on student (and digital natives) samples, potential method and non-response bias due to the Internet based self- administered questionnaire.

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Appendix A: Constructs, survey items, factor loadings, Cronbach’s alpha and variance extracted

Construct/items Loading α Var

Entertainment Enjoyable .907 Fun to use .885 Pleasing .882 Exciting .845 Entertaining .823 .918 75.460 Irritation Annoying .956 .134 Irritating .955 .143 Confusing -.017 .913 Deceptive .362 .776 .742 85.756 Credibility Trustworthy .889 Believable .888 Credible .781 .815 72.991 Informativeness

Be a good source of up-to-date product information .883 Be a good source of product information .823 Make product information immediately accessible .809 Provide timely information .808 Be a convenient source of product information .798 Supply relevant product information .786

.900 66.987

Personal Relevance

Make me feel like I am right in the advertisement

experiencing the same thing .779 Make me think of how the product might be useful to me .765

Be meaningful to me .764

Make me think why I would buy or not buy the product .760

Give me a good idea .726

.814 57.584

Incentives

The advertisement offers me a discount on the advertised

brand/product .872

I receive an incentive .855 The telecommunication firm who sent me the

advertisement offers me a discount on one of their services (i.e. cheaper texting or calling)

.798

.791 70.945

Subjective Norms

If I use PBLAMA most of the people who are important to

me will regard it as valuable .900 If I used PBLAMA most of the people who are important

to me would regard it as wise .877 If I used PBLAMA most of the people who are important

to me would regard it as useful .846 People who are important to me would think that I should

use PBLAMA .818

.884 74.135

PBC

I would be confident managing PBLAMA if someone else

helped me get started .895 .107 .104 .019 I would be confident managing PBLAMA if someone

showed me how first .883 .010 .054 .019 I would be confident of managing PBLAMA if I could ask

someone for help if I got stuck .782 .226 .242 .059 I would be confident managing PBLAMA if I had seen

someone manage it before myself .753 .384 .196 .040

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I would be confident managing PBLAMA if there was

inbuilt assistance .724 .203 -.017 -.212 I would be confident managing PBLAMA if I had a lot of

time to process it .696 .051 -.232 -.138 I would be confident managing PBLAMA if I have a

manual for reference .617 .486 .075 .061 I would be confident managing PBLAMA even if there

was no one to show me how .194 .930 .033 -.073 I would be confident managing PBLAMA even if I have

never used it before .175 .939 .014 -.053 The decision to use PBLAMA is completely up to me .109 .232 .642 -.489 The decision to use PBLAMA is beyond my control .056 -.050 .902 .104 Whether I use PBLAMA or not is entirely up to me -.027 -.023 .014 .912

Intention

I plan to use PBLAMA when it is available .943 I will use PBLAMA when it is available .929 I expect to use PBLAMA within the next 2 years .826

.882 81.157

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