Consumer attitudes toward location-based advertising via mobile devices

Abstract

Mobile advertising is evolving rapidly and becoming the key mobile data and revenue drivers of the mobile contents market. More powerful mobile devices have made possible the creation of better and richer mobile advertising. Moreover, the integration of location-aware technologies such as Cell Identification and GPS (Global Positioning Systems) into mobile devices has inspired the development of location-based advertising (LBA). As location-based services (LBS) have the potential to become the first realizable example of ubiquitous computing, business opportunities from these appear quite feasible. LBA can provide relevant, targeted, and timely advertising information to consumers at the point of need. The purpose of this study is to investigate consumer attitudes toward LBA, and the relationship between permission, incentives and consumer profiles, and to test whether LBA has the ability to impact purchase intention. The research framework is based on the theory of consumer attitudes toward advertising and the theory of reasoned action. An online survey was conducted with 1000 respondents to verify our research model. The hypotheses were tested using reliability test, regression analysis, chi-square test, t-test and structural equation modeling. The main results of this study are as follows. First, consumers generally have positive attitudes toward location-based advertising if they have specifically consented to it. Second, there is a direct relationship between permission and incentives. Third, permission affects incentives positively. Fourth, people who have granted permission for mobile advertising spend more on telephone calls than those who have not. They also have more experience of using mobile Internet, sending text messages by short messaging service (SMS), and receiving SMS advertisements. Lastly, an experimental study was conducted to test whether LBA effects purchase intention. We found that 73% of respondents had higher purchase inten...