Canadian Journal on Computing in Mathematics, Natural Sciences, Engineering and Medicine Vol. 2 No. 6, June 2011

Exploring and Analysis of Factors Affecting Mobile Advertising Adoption - An Empirical Investigation Among Iranian UsersM. Keshtgary, S. KhajehpourAbstract The high penetration and growth rates of mobile phones with the recent technological development have created a whole new communication channel with consumers known as mobile advertising. Researches show that the success of this new advertising channel depends on the customer acceptance of advertising. In this paper, we investigate the factors influencing consumer attitudes toward mobile advertising and the relationship between their attitudes and behaviors. An empirical method is used and six hypotheses are tested. Our findings confirmed five of hypothesis. A quota sample of 167 cellular phone users has been assessed. The results indicate that (1) entertainment is the most important attribute affecting consumer attitudes toward mobile advertising, (2) in our society, consumers have not generally negative attitudes toward mobile advertising but they prefer prior permission (3) incentives that offer free minutes on the phone lead to more positive influence on consumer intentions to receive and read mobile advertisements . Key Words Mobile Advertising, Consumer Attitudes, Mobile Advertising Acceptance, Iranian Attitudes.

I. INTRODUCTION Mobile Advertising refers to the transmission of advertising messages via mobile devices such as mobile phones [1]. According to the International Telecommunication Union, until the end of 2010, from 6.8 billions of Earth's population, more than 5 billion have mobile phone; this is a very good communication channel with consumers. Mobile advertising enables new revenue streams and opportunities for subsidizing access to its providers while enabling the consumers with a new value adding mobile experience sponsored by advertising. The value added services increase the power of ads tenfold, because a strong kind of customer bonding is likely to happen and they are likely to use the business service again. If the businesses want to use this communication channels efficiently, they need to know how mobile consumers evaluate mobile devices as a source of advertising [1] and what factors influence on acceptance of mobile advertising. The factors mentioned above lead us some questions like: what are the consumer's attitudes toward mobile advertising, which factors

affect them and what is the relationship between consumer attitudes and consumer behavior. Many research and empirical studies have been done in other countries, but we do not have any in Iran. Here we use the Tsang, Ho and Liang model [3] which is an empirical analysis of consumer behavior in respect to mobile advertising. Entertainment, in formativeness, Irritation and Credibility are the main factors affecting the acceptance of mobile ads, as mentioned by most of researchers. We also consider these factors and try to evaluate it in our country. For this purpose a quota sample of 167 cellular phone users who are generally young and educated, have been interviewed. The results indicate that Iranian users have not generally negative attitudes toward mobile advertising but they prefer prior permission. Structure of this paper is as follows: At first in section II, we review the advertising models. Then in section III, we will review the process of mobile advertising acceptance. In the sections IV to VII, we discuss factors affecting customer attitudes and decisions to acceptance of mobile advertising. In Section 8, we describe customer behavioral intention to accept or not accept the mobile advertising. In section IX, we will analyze our results and findings. We conclude the paper in section X. II . MOBILE ADVERTISING MODELS

Based on different strategic applications, Mobile advertising can be permissionbased, incentive-based, location-based [3] or can be combination of them. We review them in the next section. The most famous mobile advertising technologies are SMS, MMS, Bluetooth and Wap. Short message service (SMS) is estimated to have 90% of global mobile market revenue. Multimedia message service (MMS) is able to send simultaneously text, photos, audio and video messages or a combination of them. Advertising with Bluetooth is a kind of location based services in the short range (1 to 100 m), and advertising in Wap sites which enables mobile phones to connect to the Internet. Advertising can be sent in two forms: push and pull. In push form, marketers send advertisement to the consumers without initial request of them. In pull form, the customer's request information actively from organizations or marketers. One of 144

Canadian Journal on Computing in Mathematics, Natural Sciences, Engineering and Medicine Vol. 2 No. 6, June 2011 the major factors of success of mobile advertising is obtaining permission from customers. The dominant form of mobile advertising which is available in Iran is advertising via short message service or SMS. Therefore, in this paper we focus on this technology. SMS has the high influence and its cost is less than other media .In other hand it has exceeded all initial expectations and become a great market success [5]. In America more than 350 billion SMS is sent every year. Every mobile phone in the world supports SMS, creating a great market for SMSbased advertising campaigns. Although m-advertising offers attractive and innovative opportunities, it has some limitations, which make mobile advertising rather unpractical in current form. Many limitations are due to technical attributes of mobile devices that can be overcome in the future, except the screen size [6]. This seems to be one of the most difficult limitations to overcome when applying advertising to mobile devices, because the scope for design of advertised messages is limited [1]. It has been found a challenge for advertisers to produce SMS ads that consumers explore eye- catching, entertaining, relevant, and effective. MMS along with the high resolutions and multicolor display phones enables a more attractive adverting technology compared to SMS, involving audio , pictures and videos clips that can be produced for individual users with specific needs and interest. But broadband access and advanced mobile devices with multimedia support should increase the media's attraction for image campaigns [13] .MMS and mobile internet technology is expected to be used by consumers among with the movement from 2G to 3G phones. In fact MMS messages would be the right approach to drive mobile campaigns in the future [2]. In the absence of sound, image and motion in SMS that could effectively convey and demonstrate the products ability to satisfy a sensory need, text advertisements may be ineffective in producing an influential emotional appeal. Instead the quality of information may play a more crucial role [11]. III. ACCEPTANCE PROCESS As many other innovation concepts, mobile advertising is fully depends on the consumer acceptance of the new marketing channel. For a well-grounded forecast of the acceptance of mobile marketing it is necessary to examine the adoption and use decisions as combined processes. The best way to forecast consumer acceptance should be by measuring the attitude toward acceptance [2]. The aim of this section is to discuss the consumer acceptance process construction. There are three models which are the most commonly used in explaining the process of consumer's acceptance and adoption of services/ products. These are: Theory of Reasoned Action (TRA), Theory of Planned Behavior (TPB) and Technology Acceptance Model (TAM). Theory of reasoned action suggests that an individual who intend to perform a behavior, will most likely perform. This model consists of three components: attitudes, subjective norms and behavioral intention. Attitudes toward a specific behavior can be referred as "the degree of favorable or unfavorable reaction toward a given behavior". For instance if the individual have positive attitudes towards mobile advertising, he/ she will probably have a behavioral intention of accepting it. If the attitudes are negative, the behavioral intentions will instead be not accepting it [4]. Attitude, intention, and behavior are three major constructs in the theory of reasoned action (TRA) proposed by Fishbein and Ajzen in the early 1970[7]. The model links individual beliefs, attitudes, intentions, and behavior to describe the psychological process that mediates the observed relations between attitudes and behavior [3]. The theory also means that a person's intention followed by a behavior. In other words individuals work logically. If they intend to do something, they will perform that action. The TPB model is an extension of the TRA. It adds a new variable to the TRA model called perceived behavioral control. The variable perceived behavioral control takes in account the individuals perception of how easy or difficult it is to do an intended behavior. For example, if the individual have the resources to perform a behavior. Are there any obstacles in the way of performing it? [4]. TAM has replaced the original TRA variables of attitudes and subjective norms with technology acceptance measures. The model is the most used TRA extensions concerning individual's acceptance of new technologies. The model suggests that the intention of using new technology is based on two ease of use and usefulness. If the person finds the technology is easy to use without a large amount of effort and the new technology is useful, for instance, for creating value then he/she will create attitudes towards it. These attitudes result in behavioral intentions of using / accepting it. [4] IV. FACTORS AFFECTING CONSUMER ATTITUDES Here we discuss factors affecting consumer's attitude. A. Entertainment Entertainment is a crucial factor for mobile advertising. Entertainment is the ability to arouse aesthetic enjoyment [8]. Since most people have a natural playfulness, providing games and prizes via text messaging (SMS), yields high participation and is a successful way to attract and keep customers [1]. It is essential that the message is concise and funny, and thus immediately get consumer's attention. Peoples feeling of enjoyment associated with advertisements is very important their overall attitudes towards them. These features can be used to make consumers more familiar with the service or product. These features can be used to involve customers more deeply and make them more familiar with the advertised service or product [1].

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Canadian Journal on Computing in Mathematics, Natural Sciences, Engineering and Medicine Vol. 2 No. 6, June 2011 Japanese mobile communication providers have very strongly promoted mobile internet as a means of entertainment right from the start. In contrast in Europe and US, mobile Internet-based services are strongly positioned as a convenient service for business professionals and mainly provide business-related information. In general, advertising in Japan is more fantasy-oriented than advertisements in western countries. Consequently, Japanese consumers regard their mobile phones portable entertainment players [6]. The more entertaining the services are, the more customers will mind the advertising entertainment services. Examples for such services would be games with company logos (i.e. puzzles), ring tones of the company theme song, Jokes, astrology, competitions, etc. B. In formativeness (Awareness) Past researches show that informativeness of the advertising message turns out to be the second strong influential factor on consumers. Informativeness is the ability to effectively provide relevant information [8]. The advertising message is perceived as valuable as long as it provides information and thus creates some benefit for the consumer [8]. A survey [5] identified entertainment value and information value as the strongest drivers of mobile advertising acceptance. They argued that consumers develop a positive attitude toward mobile advertising which in turn leads to the behavioral intention to use mobile services only if mobile advertising messages are creatively designed and entertaining or if they provide a high information value [9]. In a trial in Sweden, it was found out that 76 percent of mobile users welcome advertising if it is integrated within useful information [14]. Mobile advertising are considered a source of information. Results indicate that Japanese and Austrian do not perceive advertisements as more informative [6]. Advertising funded information services include news, weather, traffic reports, market rates, and details on songs currently played on the radio. Although the receiver pays little or nothing for this information, advertisements must complement consumer interests. [13] If user goal involves any kind of information seeking that can be fulfilled with an ad, the user attitudes are likely to be positive towards receiving it. If mobile advertising can provide consumers with relevant information that helps them to fulfill their needs, they will accept it too [2]. C. Irritation Irritation refers to any offending effects that may go against what a user values [8]. In other words, Irritation is a phenomenon that is similar to reactance, which means consumers tend to refuse advertisements if they have the feeling that the advertisement is too intrusive. The perception of intrusiveness can be decreased if the advertisements are relevant to the target group and if they provide value to the recipient. Thus, the perceived irritation can be influenced by an advertisements message [1]. Timerelated information is closely linked with the location dimension. An advertising message sent at a certain time of day may be very important at a time but can be irrelevant some hours later [6]. The number of advertising messages received via mobile devices is an important factor influencing the advertising value for the consumer. D. Credibility Advertising credibility refers to consumer's perception of the truthfulness and believability of advertising [6]. Credibility is based on the extent to which consumers believe that the business has the expertise and honesty to perform a transaction effectively and reliably. It is the base of consumer trust. Building customer trust is a complex process that involves technology and business practices, but is crucial for the growth and success of m-commerce. Since communication with consumers via their mobile devices is a young phenomenon, marketers are requested to build trust. It is therefore advisable to build awareness via other media as well [1]. Risk is an issue related to trust. To minimize the risk, the marketers must not only gain the trust of consumer but also have to work hard to sustain it. If consumers cannot trust the provider, they will not accept receiving ads to their mobile phones [4]. Therefore, the establishment of a well founded basis of trust for mobile marketing has to be a major goal for all advertising companies. This is the prime prerequisite for consumer's willingness to permit the reception of advertising messages on their mobile phones and to provide their personal data for personalization of those messages. Thus, it is a prerequisite for the consumer acceptance of mobile marketing [5]. Based on these four main features, we explain the first hypothesis: H1: The perceived entertainment, informativeness, irritation, and credibility of mobile ads affect attitude toward mobile advertising.

V. PERMISSION According to researchers, customers in general have shown negative attitudes towards receiving mobile advertisements that are unexpected. This type of mobile advertising is also referred spam. Customers find this as a violation of their privacy [4]. Permission based mobile advertising (PBMA) is considered to be the easiest way to tackle the privacy issue [10]. In many countries mobile advertising is permission based by law in order to keep mobile phones clear of spam. Accordingly, mobile advertising basically follows the ideas of permission marketing [9]. In the UK, under privacy and Electronic Communication Regulations, permission is needed for SMS ads [10].

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Canadian Journal on Computing in Mathematics, Natural Sciences, Engineering and Medicine Vol. 2 No. 6, June 2011 On the other hand, users should be able to control advertising. This refers simply to consumers control over when, where, what and how much advertising to receive into the mobile [2]. Typically, gaining permission is done by asking the consumer to fill out a survey during registration for a service to indicate his or her interests regarding advertisement. After that the marketer can match advertising messages with the interests of the consumer [1]. Consumers will accept a certain degree of privacy loss if the benefit is perceived as being sufficient and satisfying. These processes allow a new kind of interactivity, which often leads to marketers collecting, compiling and using information about customers. Mobile advertising may therefore be considered the easiest way to tackle privacy especially the sharing of user information will be a major issue in the future [1]. Some researches show that consumer attitudes toward mobile advertising are generally negative, but are positive if permission is obtained. This view leads us to the second hypothesis: H2: consumer attitudes are different for permissionbased and general mobile advertising. The TRA model says that a person's intention is followed by a behavior and if they intend to do something they will perform that action. If the individual have positive attitudes towards mobile advertising then he/she will probably have a behavioral intention of accepting it and if the attitudes are negative the behavioral intentions will instead be not accepting it. Thus for exploring this relationship we expose to discussion the third hypothesis: H3: Attitudes toward mobile advertising affect consumer intentions to receive mobile ads studies show that incentives like free minutes on the phone, free SMS/MMS, free games and ring tones to the mobile are working well. Some researchers show that Incentives have a significant effect on students and they belong to a group of people who are more responsive to incentives in general than other groups [4]. So we expose the forth hypothesis. H4: Incentives can affect consumer intentions to receive mobile ads.

VII.

LOCATION BASED ADVERTISEMENTS

VI.

INCENTIVES

Locationbased advertising is regarded as one of the most interesting opportunities that m-commerce has to offer because of its impact on the perceived informational utility of the location-aware advertisement. [11] Location aware adverts will help to improve and targeting and reduce irrelevant advertising messages. GPS ranks second as the most desired handset function in both Western Europe and the US .Of course , Bluetooth system location finder are usually used in mobile advertising in shortranges such as organizations and campus. Location- Based SMS Advertising involves participants agreeing to receive SMS and/or MMS- based advertising based on their physical location. For example, when someone is near of a retailer, he/she would be pushed a message which typically offers a time-limited promotion or discount [12]. Pull mobile advertising is better where the consumers requires information and does not receive it until later. Push mobile advertising can be finding irritating. Despite numerous advantages of Location-Based Advertising which in future will be presented in Iran, we expose the fifth hypothesis: H5: providing Location-Based Advertising affect consumer intentions to receive mobile ads.

Incentive based advertising is an approach that provides specific financial rewards to consumers who agree to receive ads. This type of approach has been discovered affecting the consumer intention to receive mobile advertising under a given attitude, which instead affects the consumer's actual advertisement receiving behavior [2]. In a Nokiasponsored survey, conducted by HPI Research Group, almost nine out of ten participants (86%) agreed that there should be a trade-off for accepting advertisements on their mobile devices. Previous studies have shown that retail price promotions change consumers purchase decisions and that retailers use price promotions more frequently to boost store sales [11]. Incentives must be clear. The benefit has to be worth user's time. They need to know exactly what the benefit is. Mobile coupon is one of the incentives. Mobile coupons are digital coupons sent to mobile devices. The consumer receives the coupon on the mobile device and stores it until he or she decides to redeem it. Coupons are still considered as effective promotional tools for a wide range of products. The most obvious objective is sales increase triggered by price reductions offered by the coupons value [12]. Several

VIII.

BEHAVIORAL INTENTION

The analysis also looked at behavior after receiving a mobile advertisement. Behavior is measured by the extent to which an ad would be read (ranging from fully read to not read) and the timing for reading the message after receiving it (ranging from immediately reading it to ignoring it). Respondents who were willing to receive mobile ads tended to read the messages in full and tended to read them immediately, but those whose intention was not to receive mobile ads tended to ignore and not read those [3]. According to the TRA model, a person's intention is followed by a behavior. In other words, individuals work logically. If they intend to do something they will perform that action [4]. So it is necessary to expose sixth hypothesis: H6: Consumer's intentions to receive mobile ads affect their behavior after receiving mobile ads. Among three types of mobile advertising (permissionbased, incentive-based and location- based advertising),

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Canadian Journal on Computing in Mathematics, Natural Sciences, Engineering and Medicine Vol. 2 No. 6, June 2011 permission is usually considered to be a major factor that may affect attitudes. Incentives and location based advertisements are considered to have an impact on consumer intentions to receive mobile advertising under a given attitude. Intention then affects their actual advertisement receiving behavior. Figure1 shows these relationships graphically.

Fig.1. Research framework

IX.

STATISTICAL ANALYSIS 20 questions which measured the respondent attitudes and their behaviors after receiving mobile advertising. Any questions were divided to five choices from completely agree to completely disagree and to confirm or dismiss our hypothesis, we used SPSS to run different test to find out if our hypothesis are statistically supported. Demographic data show that 94 respondents were male and 73 female. 60 respondents had less than 18 years, 77 between 18 to 35, and 30 respondents are over 35 years old. These data show that most respondents are young and they composed of 60 high school students, 35 university students, 16 professors, 41 employees and 15 other occupations. Table I shows frequency percent of user tends to type, number and length of received messages.

In order to examine the effect of identified factors on customer attitudes, intentions and behaviors, we use a quantity method. Questionnaires were distributed among 170 mobile users which 167 were returned. 60 questionnaires were distributed among high school students in Shiraz and 70 questionnaires were distributed among students, faculties and staffs of Persian Gulf University in Busher. Others were distributed among Fars telecommunication Company, airline employees and shop sellers. Our target group was youths because we believe that this age group will be the ones that are the target for mobile advertisers. Questionnaire includes two parts. The first part includes age , sex , occupation and education of respondents and also four questions about their desire to media type, number, length and type of SMS advertising. Second part includes

TABLE I PERCENT FREQUENCY OF USERS TEND TO TYPE , NUMBER ,AND LENGTH TO INCOPMING MESSAGES

Communication Media Type Advertising Number of daily SMS Message received length

Television 53.9% Timing 37.1% No matter 56.9% No matter 41.3%

Mobile 38.9% Product 26.9% Maximum two 16.2% Not more than one line 24%

Internet 27.6% Service 26.9% Maximum three 13.2% Not more than two line 20.4%

E-mail 8.4% Election 13.2% Maximum one 11.4% Not more than three line 14.4%

None 4.8% None 9.6% No number 2.4% -

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Canadian Journal on Computing in Mathematics, Natural Sciences, Engineering and Medicine Vol. 2 No. 6, June 2011 For the first hypothesis, because we must check the impact of some independent variables on a dependent variable, so we use the analysis of variance (ANOVA). Whenever meaningful level (p) is less than 0.001, a hypothesis with 99% confidence is accepted. So first hypothesis is accepted because p < 0.001 and F=6.216 (Test statistic). To determine the share of each variable, step wise regression was used. The test shows that among the four independent variables (Entertainment , Informativeness, Irritation and Credibility) , the variable Entertainment with the 9.1% share , and followed by lack of Irritation with 2.8% share have the most influence on attitudes toward mobile ads and the share of Informativeness and Credibility is less than one. Table II and III show statistical analysis results of the first hypothesis.

TABLE II RESULTS OF AN ANALYSIS OF VARIANCE TEST

Model 1 Regression Residual Total

Sum of Squares 88.709 577.950 666.659

df 4 162 166

Mean Square 22.177 3.568

F 6.216

Sig. 0.000a *

*0.001 < pTABLE III STEPWISE REGRESSION RESULTS OF HYPOTHESIS 1

step 1 2 * 0.001 < p

variable Entertainment Entertainment Irritation No

R 0.302 0.345

R Square 0.091 0.119

B 0.489 0.505 0.144

Beta 0.302 0.119 0.063

t 4.07 4.25 2.28

Sig. 0.000 * 0.000 * 0.024

Regarding the second hypothesis, the correlation coefficient test was used. This test showed that consumer attitudes for general mobile advertising and permissionbased are not different and there is a correlation between them. Because the answer of question 7 of questionnaire which is , I generally have no problem with mobile advertisements, show that %65.9 responders completely agreed or agreed. These findings show that general public respondents do not object to mobile advertising. On the other hand for the question 4, The authorization of receiver has direct effect on their attitudes, %82 responded completely agree or agree. The test results show that this relationship is significant because p