CHAPTER -2- CONSUMER BEHAVIOUR AND SMS ADVERTISINGshodhganga.inflibnet.ac.in/bitstream/10603/72326/11/11_chapter2.pdf · Online advertising VS. Traditional 2.1.1.1. Traditional Advertising

2.1 Traditional Advertisement and online Advertisement

2.2 Consumer View of Mobile Marketing

2.3 Consumer behaviour and SMS advertisement

2.4 Consumer Attitude toward SMS advertisement

2.5 Attitude toward and intention to use advertisement

2.6 Consumer behaviour and Permission Marketing

2.7 Factor to willingness to accept SMS advertisement

2.8 Consumer acceptance of SMS advertisement

References

CHAPTER-2- Consumer Behaviour and SMS Advertising

CHAPTER -2- CONSUMER BEHAVIOUR AND SMS ADVERTISING

PhD Thesis PRASHANT AMIN Page Number-64

SMS advertising is an effective interactive medium that combines the impact of telemarketing, the

digitalization of e-mail, and the localization of m-commerce. Considering the above reasons,

users’ responses to SMS ads will shape the future of SMS advertising. Seeking an understanding

of mobile phone users’ attitudes towards and behavioral responses to SMS ads from a use-and-

gratification perspective will help advertisers to design SMS messages that mobile phone users do

not feel intrusive. This chapter outlines the important drivers of SMS advertising and provides a

framework within which the critical elements affecting consumers’ willingness to accept SMS

advertising can be assessed.

2.1 Traditional advertisement and online advertisement

2.1.1. Online advertising VS. Traditional

2.1.1.1. Traditional Advertising

What are some methods of advertising used in the past?

1) Past methods of advertising that were not online

2) The methods include:

a. Billboards

b. Television Commercials

c. Radio Ads

d. Posters

Before the Internet was used in advertising, companied used various tactics in their

advertisements to attract customers:

1) HUMOR: Humor-based advertising helps to get consumers to remember a product or

service that a company is attempting to sell by making them laugh.

2 CHAPTER

Consumer Behaviour and SMS Advertising

http://www.youtube.com/watch?v=r0EVSP_6XZA



2) CELEBRITY ENDORSEMENT: Celebrity Endorsements get consumers to see that the

product is being used by certain celebrities, making them in turn want to use the product

as well

3) STORYTELLING: Storytelling attracts the consumers to read or listen to the

advertisement. By instilling anxiety in what the story will bring in the end helps to keep

the consumers attracted to both the story and the product being sold

4) FEAR: Fear can be used to force people to make decisions based on their emotions. This

type of persuasion can be used to make people fearful against a companies competitors,

thus making people choose the safe brand of products.

All of these methods are used in traditional advertising models. Now companies use new and

improved ways of advertising (including with the internet) that contain these methods, but expand

on them and use the web to their advantage in order to spread knowledge of their products and

services and ultimately make consumers want to use them.

2.1.1.2. Featured Advertising and How IT Works

The most recent and successful change in online advertising has been the development of

“featured” or “targeted” advertising. Companies like Google have taken advantage of this new

type of advertising and its benefits and have made millions of dollars through it.

So what is featured advertising?

Featured advertising is one of the most revolutionary new ways that companies are advertising on

the internet.

The use of featured advertising allows companies to perform a number of task that allow them to:

1) Customize their own ads to best attract customers

2) Only have ads on selected sites that are relevant to their product

3) Optimize their advertising budgets by not wasting money on ads that will not reach the

right audience

The ability of companies to do this has allowed them to capitalize on their advertising and

marketing success and make increased profits in recent years.

http://www.youtube.com/watch?v=iHozLw6f5rI

http://www.youtube.com/watch?v=oVngo_slWJ4



4) Google in Featured Advertising

Google has spear-headed the movement and expansion of featured advertising on the web.

The company has made extremely large profits by utilizing and selling featured advertising to

other companies.

Google has mastered this technique. When someone types in search criteria into the search bar,

Google will then have ads appear that relate to what that person was searching for.

To allow for the most accurate featured advertising Google has created a variety of services from

email to document sharing to an internet browser all to get a better idea of what customers want

and are doing. This allows Google to ensure its customers that the advertising that they are paying

for is worth the cost.

2.1.1.3. Advertising in Everyday Applications

1) Word of mouth advertising and how it is accessed, for example through Facebook

2) Also how it works using the advertising on the applications

2.1.1.4. Online Advertising

Types:

1) EMAIL ADVERTISING: sales messages sent directly to a consumer's email address

2) BEHAVIORAL TARGETING: tailoring web based ads on consumer's online behaviours

through the use of sophisticated software, analytics, and tools.

3) SEMANTIC ADVERTISING: joining or "marriage" of content analysis with advertising

through a process which allows ads to be fine-tuned and improved based on the environment they

are placed in (fishing advertisements will be placed on a website related to fishing products)

4) AFFILIATE MARKETING: form of advertising where a website owner allows an online

merchant to post advertisements on the website. This practice directs traffic to the merchant while

the website receives compensation (practiced by Facebook, Google, etc.)



5) WORD OF MOUTH ADVERTISING: newer form of traditional advertising, where

customers post feedback on social media sites therefore influencing their friends into avoiding or

using the product.

6) Banner Ads

7) Floating Ads

8) Pop-Up and Pop-Under Ads

9) Pull-Down Ads

10) Streaming Sidebar Ads

11) Text Ads

12) Unicast Ads

13) All the types found on the traditional advertising page as well

2.1.1.4.1. The process of online advertisement

In the realm of online advertising, a consumer goes through a particular process in purchasing an

item and then advertising that product to other people (intentionally or inadvertently):

1. Consumer purchases item

2. Seller asks permission to promote on social media

3. Media receives fee if consumer agrees

4. Consumer markets to contacts

*In general, this process breaks down existing barriers in commerce and switches power from the

seller to the consumer.

Negative Aspects of Online Advertising

Malware, which appears through viruses when advertising leads you to a page which can cause a

computer to be harmed just by simply clicking on a link for an advertisement. Despite the fact that

advertising online is one of if not the best way to reach the largest audience it also has some

negative attributes as well. Some people have begun using unethical methods of advertising that

can be abusive, immoral and often illegal. Many consumers feel that many of the online

advertisements are an invasion of property and are borderline censorship while some people create

advertising viruses that can pose a serious threat to internet users. Some people also feel that



online advertising constitutes as a violation of privacy as well as personal rights. Users do not want

to think that their every move online is being monitored by a corporation or business who wants

to sell them a product.

[Source: https://sites.google.com/a/siena.edu/online-advertising-vs-traditional/]

2.2 Consumer view of mobile marketing

2.2.1 SMS Messaging – A Mobile Marketing Medium

SMS marketing can be more cost effective than other media as its main cost is buying cell phone

numbers. This is necessary if a company fails to convince customers to “opt-in”, or give their

permission to receive wireless advertising. According to Forrester Research, the price for 1,000

numbers can be as high as 30$ in comparison to 1$ for 1,000 e-mail addresses. According to

experts, SMS’ effectiveness in reaching target groups helps justify this higher price. The demand

for mobile devices – equipment such as cell phones, PDAs, and digital music players that are

typically used on an anytime, anywhere basis without being connected by wires – and services that

use these mobile devices (mobile services) is growing rapidly worldwide Furthermore, mobile

services such as global positioning system (GPS) navigation, mobile email, and text and video

messaging are growing at a significant pace.

Formally, we define mobile marketing as the two-way or multi-way communication and

promotion of an offer between a firm and its customers1 using a mobile medium, device, or

technology. Because it involves two-way or multi-way communication, mobile marketing is

primarily interactive in nature, and could include mobile advertising, promotion, customer support,

and other relationship-building activities. Such interactive marketing activities are becoming

increasingly important in the changing business landscape (Ancarani and Shankar 2003; Bolton

and Saxena-Iyer 2009; Deighton and Kornfeld 2009)1. Research on mobile commerce has

primarily addressed the role of technology in facilitating the growth of transactions through mobile

devices. However, research on mobile marketing is nascent. Existing research has yielded some

insights, but these remain scattered across disciplines.



To better understand mobile marketing, it is useful to briefly review the key characteristics of

mobile media and devices, and to compare mobile and mass marketing. The mobile channel – the

marketing channel involving mobile devices – is growing rapidly in the multichannel environment

(Neslin and Shankar 2009)2. All mobile devices incorporate one or more of the following

capabilities: audio, text/data, and video. Furthermore, the following properties of mobile devices

have key marketing implications.

Customer adoption of mobile devices and services Consistent with the drivers of the adoption of

any innovation, the key drivers of a consumer's decision to adopt a mobile device or service include

the relative advantage of the innovation, the innovation's fit with existing usage patterns, the

perceived complexity of the innovation, the ability to try out the innovation, the perceived risk

related to adoption, and the degree to which adoption and use of the innovation is observable by

others (Rogers 1995)3. In addition, the Technology Adoption Model (TAM, Davis 1989)4, which

is derived from the Theory of Reasoned Action/TRA (Fishbein and Azjen 1975)5, posits that

perceived usefulness and perceived ease of use influence attitudes toward an innovation, and

ultimately, its adoption. Unlike the TRA, the TAM allows perceived usefulness and ease of use to

directly drive adoption, reflecting the notion that a positive attitude may not be required for

adoption to occur. For example, norms and pressures from a social group can induce customers

within that group to adopt an innovation, according to the TAM2 model (Venkatesh and Davis

2000)6. These additional drivers apply to mobile devices and services as well.

Pagani (2004)7 empirically examined the determinants of adoption of third generation mobile

multimedia service in the Italian market. She found that perceived usefulness, ease of use, price,

and speed of use, in that order, were the most important determinants of adoption of multimedia

mobile services. She also showed that the importance of determinants differed across segments

based on age.

Kleijnen, de Ruyter, and Wetzels (2004)8 studied the drivers of mobile gaming adoption using a

survey of mobile game users in the Netherlands. They found that perceived risk, followed by

complexity and compatibility were the most important drivers of adoption. Their analysis,

however, revealed that the key drivers differed by consumer segments. For value seekers,



compatibility was the critical driver; for risk avoiders, perceived risk was the key determinant, and

for game players, navigation, communicability and payment options were the driving factors

Consumers' attitude toward mobile marketing, in turn, influences their responses to mobile

promotions. A survey of 370 mobile phone users in Austria revealed that customers' attitudes

toward and perceived control of mobile (m)-coupons affected their intention to redeem such

coupons (Dickinger and Kleijnen 2008)9. Specifically, the study showed that the effort involved

in redeeming m-coupons strongly affected customer attitudes toward m-coupons and fear of

mobile spam influenced customers' perceived control in the context of mobile marketing.

In general, much of mobile marketing today is viewed as being intrusive (Shankar and Hollinger

2007)10. In selecting the mobile marketing methods to use for a campaign, mobile marketers need

to (1) balance the pros and cons of each method, (2) consider the synergies among the methods,

and (3) the methods used by competitors. Both business-to-consumer (B2C) and business-to-

business (B2B) marketers are using these mobile marketing methods. In the B2C space, Johnson

& Johnson uses text messaging for its optical products. A poster asks optometry patients with

mobile devices to type in “MYEYE” while they wait at the optician's or the optometrist's office.

J&J then sends a reminder message or/and promotional message about its products when the

patient is in the doctor's office (Cuno 2005)11.

Whereas a sound mobile marketing strategy pursued with appropriate methods can be effective,

we expect that few firms will rely solely on mobile marketing. Rather, mobile marketing may be

a powerful complement to other marketing activities of a firm, and a substitute for only a limited

set of those activities.

Accordingly, it appears that mobile marketing best fits into the “reach and range” strategy. The

key marketing decisions under a mobile marketing strategy include those on marketing

communication (advertising and sales promotion), delivery of digital products and services, and

customer relationship management (customer service and support).



2.2.2 SMS advertising – a part of mobile marketing

SMS advertising is a part of mobile marketing that utilizes the SMS technology. It allows

marketers to send messages to consumers through the use of a mobile device (Zhang and Mao,

2008)12 and is considered as a form of one-to-one marketing (Xu, 2006/2007)13. It enables

marketers to promote goods, services, and ideas through personalized, context driven and relevant

messages that are sent directly to individual consumers (Rohm and Sultan, 2005; Grant and

O’Donohoe, 2007; Xu, 2006/2007; Muk and Babin, 2006)14. SMS messaging system has been

predominantly used as a communication tool between friends, family, and peers. However,

businesses have effectively implemented SMS advertising to update their customers, and track

people and parcels (Leung, 2007)15. Furthermore, SMS advertising has also prompted marketers

to send coupons to consumer’s mobile phones (Xu, 2006/2007; Varshney and Vetter, 2002)16. For

example, consumer brands like Adidas, Coke, and Dunkin Donuts have already implemented and

developed mobile marketing communication campaigns targeted at the youth market (Grant and

O’Donohoe, 2007)17. In addition, SMS advertising is also commonly used to reinforce other

traditional media such as broadcast and print media (Zhang and Mao, 2008)18.

2.2.3 Categorisation of Mobile Marketing:

Push advertising

It refers to send advertising messages to consumers through an alert or SMS text message. This

marketing strategy is often employed in mobile advertising and SMS is the major communication

tool. This type of marketing often promotes free content by putting the advertisements on browsed

wireless platform. The number of SMS ads would increase from 676 million in 2002 to 18.6 billion

by 2006 (Borozo, 2002)19. Research showed that SMS was a more effective advertising channel

for the age group of 15-24 years, who were very difficult to be reached by other media (Puca,

2001)20.

Simple push advertising is a prevalent advertising type in current, which is mainly carried out

through simple text messages, i.e. SMS. Limited by existing technology, each SMS only contains

160 characters at the maximum. In other words, the maximum characters that carried by a SMS ad

is 160. In general, according to the Wireless Advertising Association (WAA), there are 34 to 160



characters in a SMS advertisement (MobileInfo, 2001)21. Other types of services such as WAP and

iMode is not as popular as SMS in current. For i-Mode ad alert in Japan, it is usually in text-based

form with linkage to cHTML pages. WAP alert involves sending email ad alert with a linkage to

a WAP page. It is expected that the marketing strategy will be shifted from current simple push

type in the lower left-hand quadrant to richer push marketing in the left-hand quadrant in future

(shown in Figure 2.1), with the supply of more sophisticated hardware and software and faster

networks in future. The technology advance (e.g. MMS advertisements for 3G), existing 3G

network and the potential 4G network; the latest 3G handset will facilitate the shift. However, due

to the relative high cost for receiving MMS advertisement, free SMS advertisement is still a

popular push advertising method.

Pull advertising

Pull advertising can operate at any wireless platform with a browsing content function. It means

that pull marketing involve putting advertisements on browsed wireless content, and it often

promotes free content.

Figure Number-2.1- Pull Advertising Matrix

Source :(( Barnes (2002) Barnes & Scornova (2004))22



2.3 Consumer behaviour and SMS advertisement

For definitions associated with mobile-based advertising, it is adopted classifications that are

derived from general principles of direct marketing, namely the “push-type” and “pull-type”

strategies. SMS mobile advertising has typically been considered an application of a push strategy

in the mobile environment (Barwise and Strong, 2002)23, meaning that information and marketing

activities flow from the producer to the consumer (Spiller and Baier, 2005)24. In a push campaign,

the marketer takes the initiative and sends messages directly to consumer regardless of whether

the consumer has agreed to receive the message. Pull strategies involve sending information that

is requested by the consumer (Barwise and Strong 2002)25. Historically, push strategies have been

associated with efforts to boost sales in the short term. In fact, most early mobile messages were

promotional in nature, focusing on inducing an immediate purchase. In addition, firms that employ

mobile campaigns can attract consumer attention and produce consumer responses to a much

greater degree than through other direct marketing channels because they can engage in one-to-

one dialogue with customers (Kavassalis et al., 2003)26.

Notably absent from many discussions of mobile commerce, or “m-commerce,” is the notion that

brand building can occur effectively in conjunction with the use of a push strategy. Mcommerce

provides a unique environment in which the firm's message may facilitate the consumer going to

a website, sending a text message, seeking out information from another medium, or even making

a purchase. The possibility of these actions makes it more likely to build the brand in conjunction

with push promotions. The fundamental premise of this paper is that the ability to brand a product

is a primary driver of the managerial intention of large firms to use SMS advertising in m-

commerce.

One of the first mobile communications technologies to be applied in marketing, SMS is a new

technological buzzword for transmitting business-to-customer messages to mobile phones, pagers,

and personal data assistants (PDAs). SMS advertising is now a substantial source of revenue for

many operators, particularly because it has been incorporated in the “instant messaging culture”

among teenagers and young professionals (Sadeh, 2002)27.



Summarizes recent advances in SMS technology. One key advantage of SMS is that it can

capitalize on the “always on” trend, in which people have access to the Internet virtually the entire

day. SMSalso allows formore interactivity with the consumer than traditional media. Many firms

deliver alerts, news updates, traffic information, or promotional coupons via SMS. In the future,

GPS (Global Positioning System) technology may also be incorporated in SMS advertising for

those who seek timely information at the right place. For example, in Japan, agencies are

conducting experimental transmission of locationbased restaurant information to public

transportation users (D2 Communications, 2005)28.

In contrast, a study conducted by Tsang, Ho, and Liang (2004)29 evinces more cautious attitudes

toward mobile advertising among Taiwanese. Developing a structural model that includes both

utilitarian and experiential factors affecting consumer attitudes toward permission-based SMS

advertising, the researchers find that (1) consumers generally have negative attitudes toward

mobile advertising unless they have specifically consented to it, and (2) consumer attitudes are

directly related to consumer behavior. In Australia, Marinova et al. (2002)30 report the results of a

similar study in a hotel setting. They find that personalized e-mail advertising exhibits negative

effects on customer acceptance, producing “opt-out” requests instead of website visits.

2.4 Consumer attitude toward SMS advertisement in general

Attitudes are conventionally regarded as an indicator of the effectiveness of advertising (Jun and

Lee, 2007)31. According to Fishbein and Ajzen (1975)5, an attitude towards an object is defined as

an individual’s internal evaluation based on his or her beliefs. Similarly, consumer attitudes

towards SMS advertising can be determined by the values that they attribute to SMS advertising

(Ducoffe, 1995)31. As suggested by Jun and Lee (2007)32, when consumers are provided with

benefits such as entertainment and information, they will perceive advertising in a more favourable

light. In addition, SMS advertising is found to be attention grabbing, a source of information,

interesting, and interactive (Maneesoonthorn and Fortin, 2004; Lee et al., 2006)33.

While SMS advertising is identified to be a more effective medium to generate consumer response,

young consumers hold increasingly negative attitudes towards advertising (Zanot, 1984; Tsang et

al., 2004)34 This could be attributed to the accumulated past negative experiences (Muk and Babin,



2006)14. High frequency SMS users also want to have control of the types of SMS advertising that

they receive. Consumers may choose to switch service providers or delete the SMS ads without

reading them if they find such ads personally intrusive (Carroll et al., 2007)35. It is therefore crucial

to examine if attitudes towards SMS advertising would discourage

SMS usage frequency. As such, attitudes towards SMS advertising could in fact affect the

behavioral outcome of using SMS (Jun and Lee, 2007)36.

2.5 Attitude toward and intention to use SMS advertisement

Several theories have been successfully applied to the contexts of IT adoption behavior, including

the theory of planned behavior (Ajzen, 1991)37, the diffusion of innovation (Rogers, 1995)3, the

expectation-(dis)confirmation model (Bhattacherjee, 2001)38, and the technology acceptance

model (Davis, 1989)39. Davis’s original technology acceptance model (TAM) posits perceived

usefulness and perceived ease of use to be primary constructs affecting user acceptance; perceived

enjoyment was added later as another important construct affecting user acceptance (Davis,

Bagozzi, & Warshaw, 1992)40. The importance of perceived enjoyment has been emphasized by

van der Heijden (2004)41, who maintains that perceived enjoyment dominates perceived usefulness

in influencing the adoption behavior of hedonic information systems. Gentry and Calantone

(2002)42 have also demonstrated that TAM outperforms the theory of planned behavior (TPB),

because perceived enjoyment and usefulness can explain consumer attitudes in a variety of

contexts, including a network economy. A number of studies based on TAM and the other theories

have explored factors affecting consumer adoption of mobile data service (MDS). Hong and Tam

(2006)43, for example, explore factors influencing the MDS adoption based on a variation of TAM.

Their study indicates that in the case of MDS, the desire to be unique and users’ psychographics

such as perceived enjoyment, perception of value for money, and gender have been found to be

significant. Also, a recent study by Lin, Shih, and Sher (2007)44 has shown that integrating a

consumer’s technology readiness into TAM can enhance the explanatory power of TAM in regard

to consumer adoption of e-service systems. Hsu, Lu, and Hsu (2007)45 examine adoption factors

for multimedia message service (MMS) using Rogers’ (1995)3 diffusion of innovation theory,

highlighting the different adoption behaviors among potential adopters and users. Relatively little



effort, however, has been directed toward investigating consumer adoption of SMS, although a

few notable exceptions do exist. For example,Xu, Teo, and Wang (2002)13 enumerate key success

factors in SMS adoption by examining the cases of Finland, Japan, and the U.S. They hypothesize

that cooperation among industry players, low cost, more attention to special mobile user groups,

and effective marketing and government support would facilitate SMS adoption. Along the same

lines, Yan, Gong, and Thong (2006)46 find that socioeconomic factors such as level of economic

development, cultural differences, political censorship, and different input languages can explain

the differential patterns of SMS adoption in Hong Kong and China. Also, Wang and Hausman

(2006)47 provide a conceptual framework that incorporates characteristics of SMS (e.g., relative

advantage, compatibility, ease of use), user profiles, nature of the social system, and marketing

environment in explaining consumer adoption of SMS. Also, Lai (2004)48 finds that service quality

and perceived value can contribute to enhanced SMS user satisfaction. More recently, Turel,

Serenko, and Bontis (2007)49 demonstrate that performance value, emotional value, value for

money, and social value contribute to users’ perceived value of SMS, which in turn increases their

behavioral intention to use SMS. Drawing on this literature, the current research seeks to develop

a theoretical model of SMS adoption among Korean mobile phone users.

Uses and gratification theory

Motivations to use SMS technology can be explained by the uses and gratification theory. This

theory purports that the consumer is actively involved in the decision to determine their media use

and is motivated by the need to fulfill certain needs (Peters et al., 2007; O’Donohoe, 1994)50.

Furthermore, these consumers select the media contents that they wish to be exposed to (Katz,

1959)51. Based on the studies conducted by Katz et al. (1973)52, the use of mass media is goal

oriented, and the consumer seeks to link the need gratification with their choice of media. The

consumer’s use of the media also competes with other sources of need satisfaction, and

gratifications from media use usually encompass diversion, entertainment, and information. In

addition, McQuail et al. (1972)53 emphasized that escapism is a common motivation for users of

mass media. The consumer also seeks to satisfy the need to express personal identity and to build

relationships (McQuail et al., 1972; Weiss, 1971; Katz et al., 1973)[53] [52] through the use of media.

Furthermore, social influences as well and psychological states of consumers also impact on the

decision. As media use is considered a natural composition of the environment, its use is therefore



a part of the consumer’s social action and routine. As such, consumers would interpret SMS

messages by incorporating it as part of their daily routine (O’Donohoe, 1994)50(ii). The utilitarian

dimension of uses and gratification theory can be applied to examine the consumers’ motives for

using SMS text messaging (Leung, 2007)15.

Various studies have identified a number of gratification seeking motives from television usage

(Lull, 1980; Rubin, 1984)54, telephone usage (Leung and Wei, 2000)55, and more recently internet

usage (Maignan and Lukas, 1997; Parker and Plank, 2000; Stafford et al., 2004)56. However, the

nature of SMS technology is dissimilar to other media; it is ubiquitous, text based, and personal in

nature.

2.6 Consumer behaviour and Permission Marketing

Permission marketing is considered the easiest way to tackle privacy (Godin, 1999)57, but it is not

free of controversy. By using the right combination of question framing and default answers, firms

can reap the consent of nearly every website visitor. These firms take advantage of inattention,

cognitive and physical laziness, and visitors’ tendency to view the default option as the standard,

popularly endorsed, or correct answer (Bellman, Johnson, & Lohse, 2001)58. For example, a recent

study found that over two out of three U.S. Internet users did not know they had consented to be

on e-mail distribution lists (Bellman et al.)58. This raises consumer privacy concerns and may

affect their trust in PM activities, affecting the success of the medium.

It is the noticeable gap in the literature regarding permission marketing and SMS advertising that

has attracted our attention for this research. Thus, our study aims at addressing this issue by

determining:

a) How consumers perceive SMS advertisements and permission.

b) How consumers are willing to give permission.

c) The profile of information consumers are willing to give and to receive.

d) Key factors affecting consumer permission.

One may question why permission to send an advertisement actually matters. Permission matters

because unsolicited advertisements may lead to consumers’ frustration and unanticipated results

(Barnes and Scornavacca, 2003)59; cellular phones are intimate so sending SMS advertisements



without the consumers’ consent is a violation of privacy. If we could better understand what affects

consumers’ willingness to give permission this may better equip practitioners to approach this

sensitive issue; marketers, managers and advertising companies may be able to offer better services

to consumers and increase their competitiveness while consumers will benefit from tailored

services that specifically answer their needs and requirements. Related to this, our insights could

be of some value to mobile communication service providers that seek to efficiently manage the

opportunities that SMS technology and their database of customers may offer them. Wu, J., &

Wang, S. (2005)60.

SMS permission issues

Carroll et al. (2005)61 examined message content and personalisation issues. For a matter of brand

trust there is a strong preference for the network operators to become the definitive media owners

and permission holders (Enpocket, 2005b)62.

Consumers’ permission in the context of SMS advertising is defined as agreeing to receive SMS

ads. Consumers’ acceptance refers to the adoption of SMS advertising as a part of our everyday

lives. A number of academic authors have attempted to examine the success or acceptance of SMS

advertising, related m-commerce applications, direct and permission marketing. The first three

models relate specifically to mobile marketing.

Mobile-marketing acceptance depends on users’ permission, WSP control, and brand trust; the

results of this exploratory research have been empirically confirmed. by Dickinger et al.’s (2005)63

model of success factors for SMS marketing are divided into two categories: the message and the

media. Message factors include: message content, i.e which type of advertisements, such as

polling, competitions, and special offers; personalisation according to time (i.e. time of day and

frequency of advertisements), location (including real-time location-specific offers) and

consumers’ preferences; and consumer control, permission and privacy, which has been identified

as the strongest negative influence on consumer attitudes toward SMS advertising. Media factors

include issues regarding the device, transmission, product fit (the media appears to better suit low

budget items, young people and services rather than goods), and media cost (which suggests that

the medium is cheaper and more effective than other alternatives).



Bauer et al. (2005)64 test a model, based on the theory of reasoned action (Ajzen, 1991)37, and find

that the most important factors that affect attitude toward mobile marketing are: consumers’

attitudes toward advertising in general; perceived utility (in terms of information, entertainment,

and social aspects); perceived risk (in terms of privacy and data security); consumers’ knowledge

about the technology; and social norms that impact on consumers’ behaviour.

A more general study examining drivers to mobile commerce, based on the theory of planned

behaviour is given by Wu and Wang (2005)59. They examine perceived risk (e.g. privacy and

security issues), cost (e.g. hardware and service fees), compatibility (e.g. with user’s existing

values, previous experiences and needs), and ease of use. This model omits to address the social

influence that can impact on the decision to acquire mobile devices.

2.7 Factors to willingness to accept SMS Advertisement

The audience's trust to advertising messages can be investigated in two dimensions. First is the

real confidence that the audience has about advertising claims being made in the short message

advertising that in many studies has been named as validity instead of the term trust. In the second,

the audience's trust in SMS advertising means that short message advertising that the user has

received does not contain any risk for him. Thus the existence of such media for advertising,

marketers are interested to know what factors affecting the audience trust to this type of

advertising.

The audience’s trust to SMS advertising is affected directly through his perception of the

advertiser's company reputation, perceived size of advertiser corporate, perceived trustworthiness

of the advertiser corporate, perception of privacy and perceptions about risks and benefits derived

from SMS advertising.

Audience perception of advertiser corporate reputation and size is important factor because this

factor can help audience to trust the corporate and provide guarantees for the ability, integrity and

goodwill of other corporate sectors. A company's reputation, which include the buyers believe that

the seller of corporate product is honest and concerned about the customer needs (Jarvenpaa

&Tractinsky,2000)65. Several studies have shown that perceived corporate reputation is a



determining factor in trust to internet shopping (Chen et al, 2002; Koufaris, 2004) [66] [67] .When

the perceived reputation of the company is positive, consumers will have more confident to

company advertisement. Customer perceived size of company is customer perception about the

size of advertiser Company. Then customers believe that larger company more understands their

interest which acts to its promises to the consumer. Apparently consumers believe a large company

provides services for them and they will support consumer need and will be able to compensate

defect of products (Koufaris, 2004)67.

Jarvenpaa and Tractinsky (1999)65 stated that the company size and reputation are likely

interaction because it is more likely that a larger companies remains in the business longer and the

larger and most famous companies are more trusted. If a consumer believes that the ability and

motivation of advertiser's company to deliver goods and services is consistent with the expected

quality, it can be said that there is trust (Jarvenpaa & Tractinsky ,2000)65.

Perceived privacy is a kind of self-concept that a user has in system that maintain the privacy of

personal information. Topic of privacy in e-commerce and mobile commerce will affect consumer

buying behavior (Furnell, 2004)68. Violations of consumer trust according to an invasion of

privacy or misuse of personal information will have negative effect on willingness to buy

company’s products (Monsuwe et al, 2004)69.

Mobile commerce like traditional shopping has the risks and benefits. Although somebody avoid

m-commerce because of its risks but also there are those who use it because of the benefits that

they have received of ecommerce. Risk represents potential that there is in desired outcome when

a person is exposed to a SMS advertising message. Perceived benefits show the audience believes

that when he/she receive a SMS advertising, led to comfortable him/her. These benefits include

greater convenience, saving time and spend less time to select the product or service.

2.8 Consumer acceptance of SMS advertisement

Several theories have been successfully applied to the contexts of IT adoption behavior, including

the theory of planned behavior (Ajzen, 1991)37, the diffusion of innovation (Rogers, 1995)3, the

expectation-(dis)confirmation model (Bhattacherjee, 2001)38, and the technology acceptance

model (Davis, 1989)4. Davis’s original technology acceptance model (TAM) posits perceived



usefulness and perceived ease of use to be primary constructs affecting user acceptance; perceived

enjoyment was added later as another important construct affecting user acceptance (Davis,

Bagozzi, & Warshaw, 1992)4. The importance of perceived enjoyment has been emphasized by

van der Heijden (2004)41, who maintains that perceived enjoyment dominates perceived usefulness

in influencing the adoption behavior of hedonic information systems. Gentry and Calantone

(2002)42 have also demonstrated that TAM outperforms the theory of planned behavior (TPB),

because perceived enjoyment and usefulness can explain consumer attitudes in a variety of

contexts, including a network economy.

A number of studies based on TAM and the other theories have explored factors affecting

consumer adoption of mobile data service (MDS). Hong and Tam (2006)43, for example, explore

factors influencing the MDS adoption based on a variation of TAM. Their study indicates that in

the case of MDS, the desire to be unique and users’ psychographics such as perceived enjoyment,

perception of value for money, and gender have been found to be significant.

A study by Lin, Shih, and Sher (2007)44 has shown that integrating a consumer’s technology

readiness into TAM can enhance the explanatory power of TAM in regard to consumer adoption

of e-service systems. Hsu, Lu, and Hsu (2007)45 examine adoption factors for multimedia message

service (MMS) using Rogers’ (1995)3 diffusion of innovation theory, highlighting the different

adoption behaviors among potential adopters and users. Relatively little effort, however, has been

directed toward investigating consumer adoption of SMS, although a few notable exceptions do

exist.

Xu, Teo, and Wang (2002)13 enumerated key success factors in SMS adoption by examining the

cases of Finland, Japan, and the U.S. They hypothesize that cooperation among industry players,

low cost, more attention to special mobile user groups, and effective marketing and government

support would facilitate SMS adoption. Along the same lines, Yan, Gong, and Thong (2006)46 find

that socioeconomic factors such as level of economic development, cultural differences, political

censorship, and different input languages can explain the differential patterns of SMS adoption in

Hong Kong and China.



Wang and Hausman (2006)47 provide a conceptual framework that incorporates characteristics of

SMS (e.g., relative advantage, compatibility, ease of use), user profiles, nature of the social system,

and marketing environment in explaining consumer adoption of SMS.

Lai (2004)48 finds that service quality and perceived value can contribute to enhanced SMS user

satisfaction.

Turel, Serenko, and Bontis (2007)49 demonstrate that performance value, emotional value, value

for money, and social value contribute to users’ perceived value of SMS, which in turn increases

their behavioral intention to use SMS. Drawing on this literature, the current research seeks to

develop a theoretical model of SMS adoption among Korean mobile phone users.



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Documents

CHAPTER -2- CONSUMER BEHAVIOUR AND SMS ADVERTISINGshodhganga.inflibnet.ac.in/bitstream/10603/72326/11/11_chapter2.pdf · Online advertising VS. Traditional 2.1.1.1. Traditional Advertising