1.1 Background To Study: Influence of Smartphone Application Based Advertisement On Purchase Intention

1.
Introduction
The purpose of this project is to study the influence of Smartphone based advertisement
on purchase intention of consumers. The digitization of media due to rapid technological
advances has created new avenues for marketers and advertisers. The field of advertising
is going through fundamental changes. The emergence of mobile phone as a medium of
advertising has enabled marketers to reach more consumers and that too more effectively.
The high penetration rate of mobile phones has resulted in the increasing use of handheld
devices to deliver advertisements for products and services. A mobile phone integrating
capabilities of both a phone and a handheld computing device is known as Smartphone.
Mobile applications are software that are installed and executed on mobile device. There
are millions of applications currently present in the Smartphone application market. Some
of them are available for free download. These applications are a major medium of
advertising for marketers as there are inbuilt advertisement libraries in these applications.
Moreover when a Smartphone is connected to internet these applications connect to
internet themselves to provide user tailored advertisement.
1.1 Background to study
Over the last 10-15 years mobile as a channel for advertising has improved dramatically.
Mobile marketing is used for a number of purposes, including brand building,
prospecting, commerce, customer relationship management and advertising (Becker
2005). Mobile advertising can be used as push or pull advertising. Push mobile
advertising refers to the marketer sending unsolicited advertising directly to a consumers
mobile phone. Pull mobile advertising refers to a consumer responding to and requesting
or pulling information from the marketer (Dickinger et al. 2004, Barnes 2002). Push
form of advertising includes SMS(Short messaging service) and MMS(Multimedia
messaging service).Pull form of advertising includes mobile websites, mobile banner
display advertising and mobile web search based advertising. In case of Smartphone
applications based advertising; the advertising can be classified as banner advertising
Influence of Smartphone application based advertisement on purchase intention
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having interaction with mobile internet. There are mobile applications that users can
download and use it for free of charges. The developers of these applications follow the
freemium model i.e. they get their revenue by offering free basic functions and then if
consumers are satisfied and willing to pay for it, they will unlock more features. The most
successful and trendy method to get revenue is to display advertisements banner aside the
application screen. These in-application advertisements are the focus of this research.
With the advantage of accessing the Internet anywhere at any time with personal
smartphones, consumers are more likely to be connected online more often. This
increases advertisers capacity and bandwidth to expose consumers to more adverts.
Being a personal communications device which people carry with them all the time,
advertisers can tailor adverts to their consumers based on their location e.g. sending
promotional adverts from retail stores in close proximity. It is expected that smartphone
tailored advertising could have advantages over push mobile advertising because it
allows for location-based adverts other than online tailored adverts.
Media transition has acted as a catalyst for another significant change in the
advertising industry, namely, consumer empowerment. The digitalization of media has
meant that there is a wide variety of information readily available for the consumer. This
has made it easier for consumers to compare product offerings and prices before
significant purchase decisions. In addition, the rise of social media and brand
communities has meant that consumers can share their experiences efficiently with
others. Generally, in in-app advertising, either a banner ad or a full screen ad with
interactive features works best for brands in terms of awareness and engagement and for
mobile content companies. With the mobile application development world highly
fragmented owing to the proliferation of multiple handsets and mobile platforms, the cost
of application development is usually very high. Ads need to have two things: specificity
and sensitivity. They need to be specific to the target audience so that there is no
mismatch, and sensitivity matters for the recall rate that the ad carries. Many experts say
the in-app advertising and the application industry will need another two-three years to
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take proper shape. The main reasons for the slow growth are the lack of a large base of
smartphones in the market and poor infrastructure such as Internet accessibility . Due to
these features it becomes quite difficult for the advertiser to target its customer efficiently.
These advertisements thus need to have a greater influence on purchase intention of
consumers. The basic aim of this study is to find the factors which help advertisers to
focus effectively on the task at hand.
1.2 Need for study
There are 27 million Smart phone users in Urban India, according to a survey conducted
by Nielsen Informate Mobile Insights. This constitutes 9 percent of all mobile users in
urban India. Smartphone incidence is higher in the large metros of 4 million plus
population with one in ten Smartphone users, and it is 6 percent in cities with a
population of100,000 to 1 million. The survey also highlights the pattern of usage by
Smartphone users. Thus, 22 million people use their Smartphones for social networking;
while 24 million use it for running online searches. Another 19 million users are using it
to chat and mail. A slightly lower 16 million users view streaming video, and use
Smartphones for maps and navigation, whereas 8 million smart phone users use it for
banking & finance, travel, shopping and accessing other web portals. Most of this usage
requires use of various in built or third party apps. So this 27 millions are a medium for
advertisers to advertise their products with advertisements tailor based for particulars
users. As there is no study regarding factors affecting consumer response towards
Smartphone based in-app advertisement, so there is a need for this study. This study will
help me and advertisers understand how to approach consumers with Smartphone based
in app advertisement.
1.3 Research Objectives

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The discussion above suggests that smartphone based in app advertising is a domain
requiring further academic research. Hence, the broader purpose of this study is to deepen
our understanding regarding consumer intentions toward smartphone based in app
advertising by implementing empirical research in an authentic campaign environment.
This approach ensures that participants have had at least some experience with mobile
advertising and allows questions related directly to advertisements they see in their day to
day interaction with their smartphones. The basic research objectives related to this study
are: Influence
of
characteristics
of
Smartphone
applications
(apps)
based
advertisement on interest of consumers in advertisement.

Influence of characteristics of applications (apps) based advertisement on purchase
intention towards advertised product.
Influence of users interest in applications (apps) based advertisement on purchase
intention towards advertised product.
1.4 Structure of study
.
Chapter 1
Introduction
Chapter 2
Review of Literature
Chapter 3
Research Objectives and Hypothesis
Chapter 4
Research Methodology
Chapter 5
Research Analysis
Chapter 6
Conclusions and Recommendations

References and Annexure

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2. Literature Review
In this chapter the theoretical foundation of this study is established. The literature review
begins with discussing about advertising in general context and then consumer attitude
towards advertising. Next the literature review continues with mobile advertising and
consumer perception about mobile advertising. Then the literature review focuses on
Smartphone applications and advertisements in those Smartphone applications. Then the
literature review focuses on characteristics of these Smartphone application based
advertisement and interaction of these characteristics with purchase intention of
consumers.
2.1 Advertising and its effectiveness
In todays cluttered and fragmented advertising environment, it is increasingly difficult to
stand out from the crowd. In addition, consumers easily ignore advertising and consider it
to have little value. Also, as media costs are high advertisers are more and more
concerned about the factors that contribute to effective advertising. The past decade has
witnessed the development of information and communication technologies that enable
easy and rapid interaction between customer and advertiser. As a result, advertisers are
increasingly relying on various modes of technology to advertise and promote their
products and services. A new genre of advertising and marketing communications
agencies has emerged, the interactive agency, even as more traditional advertising
agencies have embraced interactive technologies. The goal of advertising is to influence
consumer behavior. The American Marketing Research Foundation defines consumer
behavior as the dynamic interaction of affect and cognition, behavior and the
environment by which human beings conduct the exchange aspects of their lives. Attitude
toward advertisement can be thought of as an indicator of advertising effectiveness. In
effect,
studies
concerning
advertising
effectiveness
have
demonstrated

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that
advertisements influence brand attitudes by modifying consumer beliefs regarding

product attributes (Moore,1983). MacKenzie (1983) states that when people see an
advertisement they develop an attitude toward it which influences the measures of
advertising effectiveness such as brand attitude and purchase intentions. Attitude towards
advertisement is a complex concept that is influenced by both the affective and cognitive
systems.
2.2 Mobile Advertising and its evolution
Consumer adoption of digital mobile telecommunications has in most countries been
even faster than that of the Internet .The cell phone is by far the most popular personal
communications device for consumers and, therefore, is emerging as a coveted media
platform for marketers. Mobile advertising, or wireless advertising as it is often labeled,
is an activity that falls within the umbrella of mobile marketing and relates to use of the
mobile channel to deliver advertising messages directly to consumers. Unlike traditional
advertising channels where the individual consumer is often anonymous, the mobile
channel is extremely personal (Tahtinen & Salo 2003). Marketers can use the mobile
channel to reach out and engage an individual directly, but with this capability comes
great responsibility. The academic research into mobile advertising has focused on
establishing frameworks and conceptual models. There are two forms of mobile
advertising push or pull advertising. Push mobile advertising refers to the marketer
sending unsolicited advertising directly to a consumers mobile phone. Pull mobile
advertising refers to a consumer responding to and requesting or pulling information
from the marketer (Dickinger et al. 2004, Barnes 2002). Mobile advertising has great
potential to be a powerful medium for marketers. But little is known about what
acceptance factors and incentives may encourage consumers to opt-in and respond to
mobile adverting. There are different forms of mobile advertising for different marketers.
The use of mobile coupons and advertising is rapidly growing and marketers are
developing innovative strategies to exploit this medium (Sultan and Rohm 2005).
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2.2.1 SMS Advertising

Mobile advertising has become one of the most popular applications in mobile
commerce, particularly in the form of text advertising through SMS (Short Messaging
Service). In the study of mobile advertising little is known regarding the effectiveness of
SMS advertising and the factors contributing to its success. The term mobile advertising
is used interchangeably with SMS or text message advertising, where marketing
messages are sent via mobile phones in text format. This is perhaps because SMS
advertising is the most popular form of mobile advertising (Scharl, 2005). Mobile
advertising offers many different options for implementing advertising campaigns. MMS
messaging another form of sms advertising allows the marketer to send multimedia
content such as pictures, audio or even animations to selected target groups. MMS
messaging has been used modestly in marketing even though positive branding effects
have been found (Nysveen, 2005). Moreover, consumers seem to consider MMS adverts
more appropriate than SMS messaging (Heinonen & Strandvik, 2007). SMS
advertisement may or may not contain an interactive element. Interactive elements can
convince the potential customer to search for more information concerning the advertised
product or service and can convince the potential customer to give feedback to the
advertiser. Interactive media exhibits a two-way communication enabling the recipient to
affect the communication process actively. SMS advertisements also have a range of
possibilities to provide incentives to the mobile phone users. The effectiveness of
incentives shows that individuals are greatly interested in acquiring financial benefits
from direct marketing programs. Another aspect which can influence the effectiveness of
SMS advertisements is the advertising appeal. Due to the absence of sound, image and
motion SMS ads may not be effective in inducing a significant emotional appeal. Despite
the potential of SMS as an advertising medium, its users, volume of usage, acceptance,

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and effectiveness have received little attention from academics and international market
research institutes.
2.2.2 Location Based Advertising
LBA is a new form of marketing communication that uses location-tracking technology
in mobile networks to target consumers with location-specific advertising on their cell
phones. Location-based services (LBS) are broadly defined as services that are enhanced
by and depend on information about a mobile device's position (Jagoe 2003; Mitchell and
Whitmore 2003; Unni and Harmon 2003). These services include emergency and safetyrelated services, entertainment, navigation, directory and city guides, traffic updates,
location-specific advertising and promotion, and site-based purchasing with e wallet
enabled mobile devices. They have the potential to add significant value by placing
information, transactions, and entertainment in a location-specific context (Jagoe 2003).
Location-based advertising (LBA) is not new but being able to access it through one's
mobile communication device is. We are approaching a time when the ability will exist to
contact individuals at any time, at any place. This is due to the ubiquity of mobile
devices, particularly mobile phones with GPS functionality. The technology holds the
potential for marketers to send information and offers to consumers based on their
proximity to places where the marketers' products are available. Given the growing
ability to reach people in a much more targeted manner than was possible in the past, the
next question one must ask is, what do consumers think about it? If consumers have
generally positive attitudes toward such advertising, then this could be the very
technology that allows m-commerce to kick into high gear. If consumers are generally
negative about it then advertisers will have to sell the medium first before they can
successfully use it to sell other things. Mobile advertising in general is only beginning to
receive scholarly examination. A specific type of mobile advertising, location-based
advertising (LBA), has received even less scholarly attention. In contrast, there is a
completely new medium that allows consumers to be exposed to advertising on the
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communication devices they carry with them, primarily in the form of mobile phones.
The consumer is mobile and, by consequence, so is the device. It is this variety of LBA
that is focused on in this paper and is specifically defined as marketer-controlled
information customized for recipients' geographic positions and received on mobile
communication devices (Fields 2005). Defined this way, LBA could become an important
part of what Oliver, Rust, and Varki (1998) called real-time marketing, meeting customer
needs at the time and place they want it.
2.2.3 Smartphone app based advertisement
A smartphone is a handheld device that integrates mobile phone capabilities with more
common features of a handheld personal computer. Mobile phone network providers
offering third generation (3G) wireless service, enable users to connect to the internet at
high data speeds while on the go. With the advantage of accessing the Internet anywhere
at any time with personal smartphones, consumers are more likely to be connected online
more often. This increases advertisers capacity and bandwidth to expose consumers to
more adverts. A new form of internet advertising that is becoming increasingly popular is
smartphone app based advertising. This is based on users online activity whereby
advertisers map users interests, characteristics and habits to personal identifiers. Data
collected includes for e.g. gender. This data is then used to create adverts tailored to the
user and displayed on smartphone applications which might not necessarily be related to
the content of the visited website at the time. Online adverts for PC-based Internet
browsing can appear in numerous forms. The most popular form being the banner
which is displayed in various parts on a websites page. With recent technology, banner
adverts have become interactive so that users can interact with them such as, casting a
vote in a poll, running a video animation etc. Banner adverts employ push technology
that is, content is displayed to the user regardless of users interaction with the banner or
the website where the banner is displayed. On the other hand, an advert can be requested
that is, pulled. The latter is a measure of active technology which requires the user to
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input information before a new advert appears tailored to the inputted content (Rodgers &
Thorson, 2000). For example, when typing to search for a product in a web search
engine, the results could include keyword-related adverts. Banner adverts in online
advertising can be tailored to the users online activity which is captured by means of
cookies. Cookies are small files stored on a computer when visiting a website. These are
used as tracking means to record users online behaviour while visiting and interacting
with websites. By gathering online activity, advertisers map users interests,
characteristics and habits to personal identifiers. Data collected through cookies include:
inferred age group (e.g. 28-25), inferred gender (e.g. male), product searches (e.g. shoes).
This data is then used to create adverts tailored to the user and displayed on websites
which might not necessarily be related to the content of the visited website at the time. In
July 2011, marketing research with the marketers of 300 US companies suggested that
mobile advertising meets several key business objectives in the ability to; increase
engagement (59%), increase brand awareness (58%), build customer relationship (57%)
and drive sales (54%). Another appealing aspect of the mobile phone as an advertising
channel includes cost effectiveness (54%) . The case with smartphones is that these
encompass both online and mobile advertising. Unlike pre-3G mobile phones,
smartphones benefit from high-resolution display touch screens and web browser
capabilities and can therefore, handle larger, more visually rich adverts than other mobile
phones with fewer resources. The various aspects of advertising using smartphones could
not only attract advertisers investment attention but could also be the cause for concerns
amongst consumers. As of yet, there has been no research conducted to investigate
consumers perceptions of tailored adverts in the context of smartphones; however, there
has been research exploring consumer perceptions of online advertising and mobile
advertising.
2.3 Consumer acceptance of Mobile Advertising

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Existing literature suggests that perceived value is related to acceptance of adverts. the
concept of use-and gratification approach suggested that ; consumers perceive value on
the extent to which the advert meets their needs and use this to decide whether or not to
accept an advert. An online survey completed by 1,028 respondents and analyzed using
structural equation modeling, perceived utility was found to be positively related to
attitudes towards mobile marketing and the intention to use the service (Bauer et al.,
2005). As consumers are increasingly exposed to mobile advertising, their acceptance is
also increasingly regarded as a critical success factor (Amberg, Hirschmeier, and
Wehrmann 2004; Heinonen and Strandvik 2003). Although academic research on mobile
commerce and consumer acceptance of mobile advertising is relatively new and thus still
scarce, a number of studies have been conducted in this field. One of the first empirical
studies was Barwise and Strong's (2002) study of incentive-based mobile text message
(SMS) advertising in the United Kingdom The respondents received over 100 messages
during the six-week trial period and were paid a 5 fee on recruitment, and 0.05p per
message. The results showed that almost all respondents were satisfied or very
satisfied. Barwise and Strong (2002) explored the effectiveness of sending adverts in the
form of text messages (SMS) to 1,000 young adults (16-30 years) based in Greater
London. Profiling information was collected from each participant before the study
started which included, demographic information, interests such as type of music and
newspapers. This helped to distribute the 35 different types of adverts which ranged from
brand building, special offers, teasers, competitions, poll votes to product information.
Participants response to the effectiveness of the adverts and reactions to the experience
was captured through 500 interviews carried out at various stages along the study. Results
show more than half of the participants rated the service as satisfactory. In terms of the
advertising effectiveness of the trial study 69% of participants recalled 11 out of the 21
advertised brands and 63% claimed to have responded to the interactive ones (for e.g.
competitions) (Barwise & Strong, 2002). The results from empirical studies of four
mobile services (text messaging, contact, payment, and gaming) with 2,038 respondents
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by Nysveen, Pedersen, and Thorbjrnsen (2005) showed that perceived enjoyment,

perceived usefulness, and perceived expressiveness had a strong overall impact on
consumers' intentions to use mobile services. While perceived usefulness was found to be
a general antecedent for consumers' intentions to use all kinds of mobile services,
enjoyment, for instance, appeared to be particularly important as a driver for using
experiential services like contact and gaming services. In an attempt to study the
perceived value for the cost of trading in personal and location-based information, Unni
and Harmon (2007) asked participants to rate statements about privacy concerns,
behaviour intentions, perceived benefit and value after being described different locationbased mobile scenarios. Participants, who were undergraduate students from an American
university, were split into groups. One group were told that when on location they would
receive adverts tailored to their location about pre-selected product brands while another
group were told they would receive promotions, instead of adverts. The two groups were
further split between push type of advertising; whereby participants were told they would
be alerted by messages (either adverts or promotions) and pull type of advertising; in
which participants were told they would receive the messages only upon their explicit
request. Results from the ratings given suggest that pull advertising was better received
than push advertising. According to Unni and Harmon (2007), push was perceived to be
more intrusive than pull since this type of service was not requested in advance.
However, overall results from all 4 groups suggest that value and benefit perceptions of
such a location-based service as well as intentions to try it were low, while privacy
concerns related to location tracking data were high (Unni & Harmon, 2007).
2.4 Consumer perception of mobile advertising
Attitudes toward advertising have been studied widely because as discussed earlier, they
have a considerable impact on the effectiveness of advertising. A study by Zanot (1984)
reported negative attitudes toward advertising due to the increasing amount of advertising
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and commercial clutter. However, other studies have found that consumers, in fact, like
advertising. In specific consumers feel that advertising is helpful in guiding purchase
decisions (Shavitt, 1998). Also, it seems that attitudes towards advertising are strongly
dependent on the advertising channel. For example, Schlosser (1999) found that attitudes
toward advertising on the internet are more positive when compared to advertising in
general. More specifically Schlosser demonstrated that as opposed to advertising in
general, internet advertising was considered informative, trustworthy and entertaining.
This complex nature of advertising attitudes suggests a need for understanding consumer
attitudes towards advertising on the mobile channel.
Tsang (2004) studied attitudes toward SMS advertising and their impact on
intentions to receive further mobile advertisements. Tsang presented a framework (see
figure 6) that presents the factors affecting attitudes and the relationship between
attitudes, intention to receive mobile advertisements and user behavior. In Tsangs
framework behavior refers to the extent to which the mobile advertisement would be read
and the timing for reading the message after it has been received. Jun and Lee (2007)
studied consumer attitudes toward mobile advertising from a uses and gratifications view
point. They claim that even though attitudes in general are negative, there should be
functions of uses and gratifications that positively moderate attitudes toward mobile
advertising. The results of the study imply that the reasons for using the mobile phone
influence attitudes. More specifically, the researchers found that consumers who use the
mobile phone because of mobility and convenience have more positive attitudes towards
mobile advertising. In addition, the results indicate that usage of multimedia services
such as, ringtones, music and video, is related to attitudes.
2.5 Online Advertising and Purchase Intention
Many scholars have looked into diverse aspects of online advertisement and their effect
on consumers intention to purchase. Wu (2003) found out that the quality of on-line
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reviews has a positive effect on consumers purchasing intention and purchasing intention
increases as the number of reviews increases In a comparative study on the effects of
pragmatic value of on-line transactional advertising on purchase intention, Kimelfeld &
Watt (2001) found a strong impact for pragmatic value of advertising in predicting
purchase intention. Moreover their study revealed an effect for the Web medium itself in
producing promotional acceptance behavior and increasing purchasing intention.
Palanisamy (2004) study entitled Impact of gender differences on online consumer
characteristics on Web-Based banner advertising effectiveness, found that in the context
of web-based banner ad, gender was an influential factor toward towards banner
advertisement. As well, another study by Korgaonkar (2003) revealed gender differences
with males exhibiting more positive beliefs about Web advertising.
In a relevant study on measuring the effectiveness of banner advertising, Manchanda,
et al (2002) found temporal separation between advertising exposure and subsequent
purchase behavior, where advertising weight, copy, and timing affect consumers decision
to revisit websites and make purchases. Moreover, this study reveals heterogeneity across
consumers in response to advertising.
2.6 Characteristics of Advertising Media and Content
The various characteristics of advertising media and content as given by (Rodgers and
Thorson, 2000) are:2.6.1 Entertainment
Entertainment of advertising information is significantly related to advertising value of
traditional advertising (Ducoffe, 1995). Entertainment relates to its ability to fulfill
consumers needs for escapism, diversion, aesthetic enjoyment or emotional release
(McQuail, 1983).a greater involvement during interaction with computer-based media
results in perception of positive effects on mind of consumers.
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Entertainment is also a crucial factor for mobile marketing. It is essential that the
message is concise and funny, and thus immediately captures consumers attention
(Katterbach, 2002). Entertainment services can increase customer loyalty and add value
for the customer. As most people have a natural playfulness, providing games and prizes
via text messaging (SMS) yields high participation. Delivering games and prizes to the
customers cell phone is a successful way to attract and keep customers. Interactive
games for example can also be played via text messages.
2.6.2 Informativeness
The quality of information placed on a companys web site shows a direct influence on
the customers perceptions of the company and the companys products. Accordingly,
information delivered to them via mobile devices also needs to show qualitative features
like accuracy, timeliness, and usefulness for the consumer (Siau and Shen, 2003).
Information is thus considered a very valuable incentive in mobile marketing because
recipients react very positively to advertisements that transfer incentives. Not
surprisingly, informativeness of advertising information is therefore strongly related to
the advertising value when it is transferred via traditional media vehicles.
2.6.3 Credibility
MacKenzie and Lutz (1989; p. 51) define advertising credibility as consumers
perception of the truthfulness and believability of advertising in general. Credibility of
an advertisement is influenced by different factors, especially by the companys
credibility and the bearer of the message. Marshall and WoonBong (2003) found out that
a message on the Internet achieves less credibility than a printed message unless the
message is communicated by a strong brand. There is no empirical evidence on the
overall credibility of messages transferred to mobile devices and their influencing factors.
Considering the findings cited above we conclude that the credibility of a mobile

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advertising message has a positive influence on consumers attitude toward advertising

via mobile devices and on the perceived advertising value of the consumer.
2.6.4 Congruity
Congruency between program sources and advertising involvement influences
advertising effectiveness (Celuch and Slama 1993), especially through the effect of
processing of advertising messages. Advertising messages for congruent brands are better
remembered whether consumers function under high or low processing loads, and
advertising with congruent brands leads to positive attitudes when those processing
resources are constrained. If the marketing message interrupts users' immersion or makes
the experience seem less realistic, the advertiser has failed. Generally, consumers who use
smartphone applications are more interested in the application itself than in the related
advertising. If the advertising feature differs greatly from the application, and especially
if that difference intervenes with normal use, users may be repulsed by the advertising.
2.6.5 Integration
Seamless integration is crucial for successful smartphone applications based
advertisement , because superior brand recall occurs when brands are central to the
application(Nelson 2002). Users usually view an advertisement as a part of the
application if it is combined tightly with that application. Their interest in the application
may have a positive impact on their interest in the advertising and the advertised product.
2.6.6 Prominence
The primary consideration for consumers is often the size of advertising (Rouse 1991).
Large advertisements tend to be more effective than small ones in securing attention and
enhancing memory (Hendon 1973). Recall of advertising information and product/service
perceptions and evaluations also tend to improve when the advertisement is larger than
competing ads (Homer 1995). Advertisers also must consider the number of times their
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advertising appears, because 80% of an advertising effect stems from visitors seeing the
ad seven times; after seven repetitions, awareness and product attributes continue to
improve, but the rate of growth tails off (Broussard 2000). Moreover, the location of the
advertising is important because people may not realize that they see advertising outside
their main focus area, so they cannot recall or recognize the advertising messages when
asked (Acar 2007).
There have been various studies related to influence of mobile based
advertisement on consumers purchase intention and consumers attitude towards
different advertisements. Most of the studies have been concentrated on SMS based
advertisement (i.e. text advertisement).After advent of MMS advertisers found out a way
to engage consumers with sound and pictures to sell their products. But these MMS
advertisements lost their sheen early due to various reasons related to network coverage
and costly nature of these advertisements. Now with advancement in mobile technology
we have Smartphones as our alternative to other computing devices. These smartphones
have various features for its users and one of these features is applications which assist
users in their work. Most of these applications require internet connections and it is due
to these internet connections that these are a platform for advertisers to advertise their
products personalized for every user. There has been a gap in the research done on
smartphone based advertising, so my project on influence of smartphone application
based advertisement on purchase intention is a step in the direction to fulfill that gap in
the literature. As discussed earlier most of the applications used on smartphones work in
conjunction with internet so most of the characteristics of online web surfing can be
explored in context of smartphone application based advertisement. I have taken different
aspects of these internet applications and tried to explore their effectiveness in the mobile
context. These different aspects were tested in the pretesting stage and aspects which
proved to have significant correlation with interest and purchase intention of consumers
were retained in the final study. This was the basis for my objectives and associated
hypothesis.
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3. Research Objectives and Hypothesis

3.1 Influence of characteristics of Smartphone application(apps) based advertisement
on interest of consumers in advertisement.
H1: There is no significant correlation between Congruity of Smartphone
application(apps) based advertisement and users' interest in advertisement.
H2: There is no significant correlation between Integration of Smartphone
H3: There is no significant correation between Prominence of Smartphone
3.2 Influence of characteristics of Smartphone application (apps) based advertisement

on purchase intention towards advertised product.
H4: There is no significant correlation between congruity of Smartphone
application (apps) based advertisement and users' purchase intentions toward the
advertised product.
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application (apps) based advertisement and users' purchase intentions toward the
advertised product.
H6: There is no significant correlation between Prominence of Smartphone
application (apps) based advertisement and to users' purchase intentions toward
the advertised product.
3.3 Influence of player interest in Smartphone application(apps) based advertisement

on purchase intention towards advertised product.
H7: There is no significant correlation between Users' interest in Smartphone
application(apps) based advertisement and users purchase intentions toward the
advertised product.

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4. Research Methodology
4.1 Data collection method
A primary research was carried out through a questionnaire. The questionnaire was well
structured and responses were sought from respondents. The nature of questionnaire was
such that ambiguous responses were avoided which helped in quick analysis of data
collected.. The questionnaire was filled by the respondents in presence of the interviewer.
4.2 Sampling Design
The sampling unit for the study was an owner and user of smartphone .Based on the
geographical restrictions in which to conduct the study and the restrictions on the
sampling unit, the population size was limited. Keeping in consideration the average age
of the smartphone users, it was decided to conduct the study in universities around the
tricity. Now due to these restrictions the sample size was limited to 200.In the sampling
process 2 universities were selected randomly from a list of universities listed in the
appendix. Out of these two universities 100 sampling units were collected from one
university and 100 other were collected from second university. This resulted in
multistage mixed sampling.
4.3 Research design
This is a descriptive research concerning the characteristics of smartphone application
based advertisement which influence the consumers purchase intention. The data source
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was primary data. The research instrument i.e. the questionnaire was well structured and
non disguised as it contained close ended questions. The data was analyzed with help of
SPPS in which correlation and regression analysis was done.
5. Research Analysis
Descriptive analysis
The sample for this experiment contained 152 qualified samples out of 200 total
responses collected. Descriptive analysis consists of 3 parts. This includes description of
sample age, gender, qualification field , income distribution and frequency of smartphone
applications used.
Gender
Male; 41%
Female; 59%

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Qualification field
10%
Arts
35%
Commerce
Medical
43%
Non-Medical
13%
Age Group
Below 15
15 - 20
3%2%3%
4%
21 - 25
4%
26 - 30
9%
31 - 35
36 - 40
76%
above 40
Income Distribution
5%
2% 1% 2%
6%
Nil
1 - 50,000
50,001 - 1,00,000
1,00,001 - 2,00,000
84%
2,00,001 - 3,00,000
Above 3,00,000

Page 22
Application Usage
book my show
facebook
indian railway
just dial
saavn
whatsapp
zomato
Other
9%
9%
14% 4%
1%
59%
1%
4%
Comparison of descriptive features of Male and Female Sample
Qualification Field - Male

Arts; 10%
Non-Medical; 35%
Commerce; 37%
Medical; 19%
Qualification Field - Female

Arts; 10%
Non-Medical; 35%
Commerce; 46%
Medical; 9%

Page 23
Age - Male
4% 1% 5%
5% 73% 5%
8%
Age - Female
Below 15
15 - 20
21 - 25
26 - 30
31 - 35
36 - 40
3% 3% 3%
3%
above 40
5%
10% 73%
Below 15
15 - 20
21 - 25
26 - 30
31 - 35
36 - 40
above 40
Income - Male
Nil
1 - 50,000
5%
50,001 - 1,00,000
3% 3% 1%
1,00,001 - 2,00,000
3%
2,00,001 - 3,00,000
Above 3,00,000
85%
Income - Female
Nil
5%
2% 1% 1%
1 - 50,000
50,001 - 1,00,000
2%
1,00,001 - 2,00,000
89%
2,00,001 - 3,00,000
Above 3,00,000

Page 24
Apps Used - Male
book my show
facebook
1% 21%
8%
indian railway
just dial
7%
1%
1%
saavn
whatsapp
62%
zomato
Other
Apps Used - Female
book my show
facebook
6%
8%
2%
1%
19%
4%
indian railway
just dial
saavn
59%
whatsapp
zomato
2%
Other
Objective 1: Influence of characteristics of Smartphone application(apps) based

advertisement on interest of consumers in advertisement.
H1: There is no significant correlation between Congruity of Smartphone
Congurity
Pearson Correlation
Congurity
Interest
1
Sig. (2-tailed)
N
.363**
.000
152
152

Page 25
.363**
Pearson Correlation
Interest
Sig. (2-tailed)
.000
152
152
Inferences:1. As the Pearson correlation coefficient b/w Congruity and Interest is good
and positive (.363) and the p value is .000,this implies that null hypothesis
is rejected .
2. So we can infer that congruity of Smartphone application(apps) based
advertisement and
users' interest in advertisement. have significant
correlation.
Interest
Pearson Correlation
Interest
Integration
1
Sig. (2-tailed)
N
Pearson Correlation
Integration
.271**
.001
152
152
**
.271
Sig. (2-tailed)
.001
152
152
Inferences:1. As the Pearson correlation coefficient b/w Integration and Interest is

average and positive (.271) and the p value is .001,this implies that null
hypothesis is rejected .

Page 26
2. So we can infer that Integration of Smartphone application(apps) based

advertisement and
correlation.
H3: There is no significant correlation between Prominence of Smartphone
Interest
Pearson Correlation
Interest
Prominence
1
Sig. (2-tailed)
N
Pearson Correlation
Prominence
.331**
.000
152
152
.331**
Sig. (2-tailed)
.000
152
152
Inferences:1. As the Pearson correlation coefficient b/w Prominence and Interest is good
and positive (.331) and the p value is .000,this implies that null hypothesis
is rejected .
2. So we can infer that Prominence of Smartphone application(apps) based
advertisement and
correlation.
Objective 2: Influence of characteristics of Smartphone application (apps) based
advertisement on purchase intention towards advertised product.
H4: There is no significant correlation between congruity of Smartphone application
(apps) based advertisement and users' purchase intentions toward the advertised product.
Page 27
Purchase
Congurity
Intention
Pearson Correlation
Purchase Intention
Sig. (2-tailed)
.012
Congurity
.204*
152
152
Pearson Correlation
.204
Sig. (2-tailed)
.012
152
152
Inferences:1. As the Pearson correlation coefficient b/w Congruity and purchase intention
is average and positive (.204) and the p value is .012,this implies that null
advertisement and users' purchase intentions toward the advertised product
have significant correlation.
H5: There is no significant correlation between Integration of Smartphone application
(apps) based advertisement and users' purchase intentions toward the advertised product.
Purchase
Integration
Intention
Pearson Correlation
Purchase Intention
Sig. (2-tailed)
N
Integration
Pearson Correlation
Sig. (2-tailed)
.267**
.001
152
152
.267**
.001

Page 28
152
152
Inferences:1. As the Pearson correlation coefficient b/w Integration and purchase

intention is average and positive (.267) and the p value is .001,this implies
that null hypothesis is rejected .
H6: There is no significant correlation between Prominence of Smartphone application
(apps) based advertisement and to users' purchase intentions toward the advertised
product.
Purchase
Prominence
Intention
Pearson
Purchase Intention
Sig. (2-tailed)
N
Pearson
Correlation
Prominence
Correlation
.178*
.028
152
152
.178*
Sig. (2-tailed)
.028
152
152
Inferences:1. As the Pearson correlation coefficient b/w Prominence and Purchase

intention is low but not 0 and positive (.363) and the p value is .028,this
implies that null hypothesis is rejected .
Page 29
2. So we can infer that prominence of Smartphone application(apps) based

Objective 3: Influence of player interest in Smartphone application(apps) based
advertisement on purchase intention towards advertised product.
H7: There is no significant correlation between Users' interest in Smartphone
application(apps) based advertisement and users purchase intentions toward the
advertised product.
Correlations
Interest
Purchase
Intention
Pearson Correlation
Interest
Sig. (2-tailed)
N
Pearson Correlation
Purchase Intention
.449**
.000
152
152
**
.449
Sig. (2-tailed)
.000
152
152
Inferences:1. As the Pearson correlation coefficient b/w Interest and purchase intention
is high and positive (.449) and the p value is .000,this implies that null
2.
So we can infer that interest in advertisement and users' purchase intentions

toward the advertised product have significant correlation.
Regression Analysis

Page 30
Model
R Square
Adjusted R
Std. Error of the Estimate
Square
.454b
.206
.195
.446962
a. Predictors: (Constant), Congurity,Prominence

b. Dependent Variable: Interest
Coefficientsa
Model
Unstandardized
Standardized
Coefficients
Coefficients
Std.
Sig.
(Constant)
.370
.086
Congurity
.449
.094
.283
.076
2 Prominence
Correlations
Interval for B
Beta
Error
1
95.0% Confidence
Lower
Upper
Zero-
Bound
Bound
order
Partial
Part
4.319
.000
.201
.540
.363
4.766
.000
.263
.636
.363
.363
.363
.276
3.730
.000
.133
.433
.331
.292
.272
a. Dependent Variable: Interest
The regression equation is

Interest = .370 +.449Congruity+.283Prominence
Charts

Page 31
The histogram shows the residuals of the interest variable. Residual is what remains after
independent co-efficients have been determined. The curve is a normal curve which is the
ideal curve. The histograms must be inside the normal curve. This implies that residual is
less after carrying out the regression analysis.

Page 32
The normal p-p plot of regression standardized residual shows the residual values all
hugging the line of least squares or the line of greatest fit. These values must be close to
the line of least squares which is an idealized plot.

Page 33
The scatter plot shows the distribution of data which must be randomly distributed. If the
data is not randomly distributed then we have heteroscedasticity present in our data
which implies that we dont have confidence in standard error associated with our
database .

Page 34
Regression Analysis
Model Summaryc
Model
R Square
Adjusted R
Std. Error of the
Square
Estimate
.449a
.201
.196
.501617
.224
.214
.496089
.473
a. Predictors: (Constant), Interest, Integration

b. Dependent Variable: Purchase Intention
Coefficientsa
Model
Unstandardized
Standardized
Coefficients
Coefficients
Std.
Sig.
(Constant)
.379
.073
Interest
.504
.082
Beta
.449
Correlations
Interval for B
Error
1
95.0% Confidence
Lower
Upper
Zero-
Bound
Bound
order
5.204
.000
.235
.523
6.147
.000
.342
.666
.449
Partial
.449
a. Dependent Variable: Purchase Intention
The regression equation is

Purchase intention = .379 +.504Interest

Page 35
Part
.449
Charts
The histogram shows the residuals of the interest variable. Residual is what remains after
independent co-efficients have been determined. The curve is a normal curve which is the
ideal curve. The histograms must be inside the normal curve. This implies that residual is
less after carrying out the regression analysis

Page 36
The normal p-p plot of regression standardized residual shows the residual values all
hugging the line of least squares or the line of greatest fit. These values must be close to
the line of least squares which is an idealized plot.

Page 37
The scatter plot shows the distribution of data which must be randomly distributed. If the
data is not randomly distributed then we have heteroscedasticity present in our data
which implies that we dont have confidence in standard error associated with our
database .

Page 38
Another analysis has been done in comparison of correlation values of various factors
among females and males. This analysis provides us with various insights.
Correlation b/w
Congruity and Interest in
Females
.436
Males
.356
advertisement
Integration and Interest in
.278
.360
advertisement
Prominence and Interest in
.348
.317
advertisement
Congruity and Purchase
.258
.065
Intention
Integration and Purchase
.325
.178
Intention
Prominence and Purchase
.267
.022
Intention
Interest in advertisement and .619
.259
purchase intention
6. Conclusion and Recommendations

Page 39
6.1 Conclusion
As can be compared between the descriptive data of males and females the apps
usages are more or less similar for both males & females. But correlation &
regression analysis shows that despite use of same application influence of
application based advertisement is different for males & females.
The characteristics of these applications were taken from online application which
had similar nature. But as the results of this study shows, these characteristics are
not much effective in driving the purchase intention of consumer. So, there is a
need for future research to find out the factors which influence purchase intention
of consumer.
The first conclusion from study is that females use smartphones more than males,
The correlation & Regression values supports the alternate hypothesis. There is a
correlation between all the three characteristics of smartphone application based
advertisement and interest in advertisement as well as between interest and
purchase intention. Most of the values of correlation are less than 0.5 which
signifies low correlation between variable.
Also the regression values and regression equation states that despite the
correlation between variable the impact of all three variable is not significant.
From the regression equation we can infer that only congruity and prominence
influence interest in advertisement by a significant level. The regression analysis
between interest & purchase intention shows that considerable interest in
advertisement results in purchase intention to by the advertised product.
Females are more influenced by these characteristics which result in purchase
intention whereas for males the influence is low and dont result in purchase
intention.
Page 40
6.2 Recommendations
The results obtained by correlation and regression analysis show us that these
characteristics of smartphone applications based advertisement are less relevant to
consumers of these applications. So these characteristics need to be explored further to
find suitable characteristics which have deeper influence. Another aspect that comes out
is the difference in influence of the smartphone application based advertisement on
purchase intention of males and females. As females respond more to these
advertisements and show greater purchase intention towards advertised products, so its a
clue to advertisers on whom to target through these advertisements. These advertisements
were able to generate significant interest in both males and females. So advertisers need
to work more on the purchase intention aspect of these advertisements. The advertisers
need to induce more consumers into buying the advertised product. Majority of sample
has stated facebook as the main application that they use. So advertisers need to advertise
more on facebook as compared to other applications.
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1.1 Background To Study: Influence of Smartphone Application Based Advertisement On Purchase Intention

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Influence of Smartphone application based advertisement on purchase intention

advertisement on interest of consumers in advertisement.

Research Objectives and Hypothesis

Conclusions and Recommendations

Influence of Smartphone application based advertisement on purchase intention

Influence of Smartphone application based advertisement on purchase intention

advertisements influence brand attitudes by modifying consumer beliefs regarding

2.2.1 SMS Advertising

Influence of Smartphone application based advertisement on purchase intention

Influence of Smartphone application based advertisement on purchase intention

by Nysveen, Pedersen, and Thorbjrnsen (2005) showed that perceived enjoyment,

Influence of Smartphone application based advertisement on purchase intention

advertising message has a positive influence on consumers attitude toward advertising

3. Research Objectives and Hypothesis

3.2 Influence of characteristics of Smartphone application (apps) based advertisement

H5: There is no significant correlation between Integration of Smartphone

3.3 Influence of player interest in Smartphone application(apps) based advertisement

Influence of Smartphone application based advertisement on purchase intention

Influence of Smartphone application based advertisement on purchase intention

Influence of Smartphone application based advertisement on purchase intention

Comparison of descriptive features of Male and Female Sample

Qualification Field - Male

Qualification Field - Female

Influence of Smartphone application based advertisement on purchase intention

Influence of Smartphone application based advertisement on purchase intention

Apps Used - Male

Apps Used - Female

Objective 1: Influence of characteristics of Smartphone application(apps) based

Influence of Smartphone application based advertisement on purchase intention

users' interest in advertisement. have significant

Inferences:1. As the Pearson correlation coefficient b/w Integration and Interest is

Influence of Smartphone application based advertisement on purchase intention

2. So we can infer that Integration of Smartphone application(apps) based

users' interest in advertisement. have significant

users' interest in advertisement. have significant

Influence of Smartphone application based advertisement on purchase intention

Inferences:1. As the Pearson correlation coefficient b/w Integration and purchase

Inferences:1. As the Pearson correlation coefficient b/w Prominence and Purchase

2. So we can infer that prominence of Smartphone application(apps) based

So we can infer that interest in advertisement and users' purchase intentions

Influence of Smartphone application based advertisement on purchase intention

Std. Error of the Estimate

a. Predictors: (Constant), Congurity,Prominence

a. Dependent Variable: Interest

The regression equation is

Influence of Smartphone application based advertisement on purchase intention

Influence of Smartphone application based advertisement on purchase intention

Influence of Smartphone application based advertisement on purchase intention

Influence of Smartphone application based advertisement on purchase intention

Std. Error of the

a. Predictors: (Constant), Interest, Integration

a. Dependent Variable: Purchase Intention

The regression equation is

Influence of Smartphone application based advertisement on purchase intention

Influence of Smartphone application based advertisement on purchase intention

Influence of Smartphone application based advertisement on purchase intention

Influence of Smartphone application based advertisement on purchase intention

6. Conclusion and Recommendations

Influence of Smartphone application based advertisement on purchase intention

Permission-based mobile advertising,

Journal of interactive marketing 16:1 p. 262-269