Smart Ads For Smartphones: What Really Works?

Woman using smartphoneThe following is an exclusive guest contributed post for MMW by Miklos Sarvary, the Carson Family Professor of Business and the faculty lead for the Media Program at Columbia Business School. 

Consumer brands spent $8.4 billion on mobile advertising in 2013, and that number is expected to quadruple to $36 billion by 2017, according to eMarketer. But do mobile display ads — those tiny banner ads that pop up in your smartphone’s web browser — actually drive results? Recent research conducted at Columbia Business School has found that, despite their size, mobile ads can indeed have a big effect on consumers who are in the market for specific products.

The research studied survey data from nearly 40,000 American consumers about their reactions to mobile digital advertising campaigns.  Over 50 products were represented, from consumer packaged goods and cars to financial services. After viewing an ad for one of these products on a mobile device, participants were asked to complete a survey that assessed their attitude toward and intention of buying the product.

To determine what kind of products are best-served by mobile display ads, each product was classified as either “utilitarian” or “hedonic.” In other words, does the product serve a useful purpose, or is it typically bought just for pleasure?

Products were also classified as being either high or low-involvement. Higher-involvement products are those that people think a lot about before purchasing. For example, people tend to think quite a bit before purchasing a new minivan, but they don’t think too hard before purchasing a low-involvement product, like a toothbrush.

According to the research, mobile ads work best for products that are both practical and serve an important use like a family car, washing machine or a lawnmower. Mobile ads for pleasure items like movie tickets or a fancy new watch had almost no effect on consumer attitudes or purchase decisions.

What accounts for these results? It has something to do with psychology. Before making a big purchase, people tend to do a lot of critical thinking, comparing one product to another and weighing their respective options. This rational thinking is magnified even more if the product being purchased isn’t just a big new HDTV, but one that serves a more useful purpose, like a new family car.

It might take you weeks or months before deciding to bite the bullet and buy the car you’ve been thinking so much about. During that time, you’re debating with yourself about which model of car you should buy. If a display ad for that car shows up on your smartphone, even if it’s tiny and doesn’t provide you with new information, it’ll reinforce what you’ve already learned or know about the product.

The mobile ad’s strength is not adding new information, but in reminding you of what you already know and making you think about the product once again.

These findings carry huge implications for marketers who are planning a multi-channel campaign for a product. Rather than sticking with a “spray and pray” approach of just throwing ads out there and hoping they stick, marketers might find it’s more effective to launch mobile display ads after a product has been advertised in other media first. That way the banner ad seals the deal.


About the Author

Miklos Sarvary is co-author of the study Which Products Are Best Suited to Mobile Advertising? A Field Study of Mobile Display Advertising Effects on Consumer Attitudes and Intentions.Professor Sarvary’s broad research focuses on media and information marketing.