Magazine December 2013
by Andrew Stephen, Yakov Bart, and Miklos Sarvary
You glance at your smartphone to check the weather, and a tiny banner ad for a new movie pops up. What are the odds that this fleeting exposure will have any effect on you?
There’s no clear answer, despite the sums spent on mobile ads—$8.4 billion in 2012, a number expected to quadruple by 2016. Some experts argue that mobile ads are a waste of marketing dollars (see “For Mobile Devices, Think Apps, Not Ads,” by Sunil Gupta, HBR March 2013). But new research shows that mobile display ads can work for certain types of products: those that are both utilitarian and “high involvement.” Minivans and washing machines, for instance, serve a practical purpose, and consumers buy them only after much deliberation, in large part because they’re pricey. Mobile display ads for “hedonic” products (things, such as sports cars and movie tickets, that people buy for pleasure) are unlikely to have any influence, as are ones for “low involvement” products (a tube of toothpaste, a candy bar).
We studied data from a market research firm that surveyed 39,946 U.S. consumers about products featured in 54 mobile display ads from 2007 to 2010. The products spanned 13 industries, including consumer goods, financial services, and automobiles. About half the participants saw an ad for a product on their mobile devices; the others saw no ad. At the start and close of the experiment, all rated their attitude toward and intention of buying the product.
We classified the products as utilitarian or hedonic and as high or low involvement. We found that ads for utilitarian products and high-involvement products boosted attitude and purchase intention, and that the effect was greatest for products with both attributes; in those cases, ads increased positive attitude by 4.5%, on average, and purchase intention by 6.7%. For hedonic and low-involvement products, most ads had no effect.
What accounts for these results? We believe that mobile display ads, even though they convey little information, can cue consumers to revisit facts they already possess. That’s why these ads are more effective for high-involvement goods: If a product is relevant to them, people are more likely to have retained—and be motivated to recall—information about it. And psychological research has shown that the higher people’s involvement, the more likely they are to process information cognitively (rather than emotionally), a method better suited to the decision to buy utilitarian products.
The obvious implication for marketers is that mobile display ads should be reserved for utilitarian, high-involvement products. (Marketers may be able to position a hedonic product as more utilitarian: A mobile banner ad for a sports car, for instance, might show an exceptional warranty.) Marketers should also use the ads in conjunction with higher-bandwidth ones, such as TV commercials, and launch them after those more detailed messages have run so that consumers will have some stored information to retrieve. In addition, mobile display ads are more effective when viewers are close to a purchase decision and so naturally have high involvement.
As marketers shift more of their budgets to mobile channels and display ads in particular, it’s crucial that they understand when these ads can work and when they are just noise.
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