Mobile Ad Effectiveness: Hyper-Contextual Targeting with Crowdedness

Michelle Andrews (), Xueming Luo (), Zheng Fang () and Anindya Ghose ()
Additional contact information
Michelle Andrews: Goizueta Business School, Emory University, Atlanta, Georgia 30322; and Fox School of Business, Temple University, Philadelphia, Pennsylvania 19122
Xueming Luo: Fox School of Business, Temple University, Philadelphia, Pennsylvania 19122
Zheng Fang: Sichuan University, Sichuan 610064, China
Anindya Ghose: Stern School of Business, New York University, New York, New York 10012

Marketing Science, 2016, vol. 35, issue 2, 218-233

Abstract: This research examines the effects of hyper-contextual targeting with physical crowdedness on consumer responses to mobile ads. It relies on rich field data from one of the world’s largest telecom providers who can gauge physical crowdedness in real-time in terms of the number of active mobile users in subway trains. The telecom provider randomly sent targeted mobile ads to individual users, measured purchase rates, and surveyed purchasers and nonpurchasers. Based on a sample of 14,972 mobile phone users, the results suggest that, counterintuitively, commuters in crowded subway trains are about twice as likely to respond to a mobile offer by making a purchase vis-à-vis those in noncrowded trains. On average, the purchase rates measured 2.1% with fewer than two people per square meter, and increased to 4.3% with five people per square meter, after controlling for peak and off-peak times, weekdays and weekends, mobile use behaviors, and randomly sending mobile ads to users. The effects are robust to exploiting sudden variations in crowdedness induced by unanticipated train delays underground and street closures aboveground. Follow-up surveys provide insights into the causal mechanism driving this result. A plausible explanation is mobile immersion: As increased crowding invades one’s physical space, people adaptively turn inwards and become more susceptible to mobile ads. Because crowding is often associated with negative emotions such as anxiety and risk-avoidance, the findings reveal an intriguing, positive aspect of crowding: Mobile ads can be a welcome relief in a crowded subway environment. The findings have economic significance because people living in cities commute 48 minutes each way on average, and global mobile ad spending is projected to exceed $100 billion. Marketers may consider the crowdedness of a consumer’s environment as a new way to boost the effectiveness of hyper-contextual mobile advertising.Data, as supplemental material, are available at http://dx.doi.org/10.1287/mksc.2015.0905 .

Keywords: mobile advertising; hyper-contextual targeting; crowdedness; field study; new technology (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

Downloads: (external link)
http://dx.doi.org/10.1287/mksc.2015.0905 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:35:y:2016:i:2:p:218-233

Access Statistics for this article

More articles in Marketing Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().